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Leadership / Strategy

Why digital transformation must be your priority in 2018

With the continuing rise of automation, AI and the internet of things, there’s no doubt that 2018 will be a fundamental year of digital transformation for UK brands.

The recent announcement that Marks & Spencer has hired a principal technology partner in a bid to ‘drive digital-first transformation’ is further proof the UK’s biggest brands are now making this a top priority. However, ring-fencing digital transformation and throwing it over to be someone else’s problem is not advice I would necessarily like to encourage; but I’ll get to that later.

In 2018, digital transformation goes hand-in-hand with voice-activated AI, so you can expect M&S to task their new partner with helping it take a lead in this area. Devices such as Amazon Echo and Google Home flew off the shelves over Christmas to become a part of everyday life in millions of British households. And AI will play a crucial role in making the shopping experience simpler for customers.

There’s also a role for digital transformation behind the scenes as well. By deploying more automation in your picking and sourcing, you can boost efficiency and get products to customers as quickly as possible. This will also free up staff from getting lost in functional roles to instead focus all their energy on improving crucial areas such as customer service.

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However, to truly succeed, you can’t just replace human minds with AI; digital transformation must still be fuelled by human creativity. Consumers still want to feel authenticity and a social purpose at the brand’s core and, for my money, that’s still something humans are best at. Finding the right balance between AI and human-based creativity is absolutely key.

To do this, you need to look at your organisation and ask: what’s our company culture? How does it need to change? How open to change are our team? What’s their level of digital literacy? These are questions every business owner should be asking.

 

The risks of outsourcing

Once you have this information, it could be tempting to make ‘digital transformation’ someone else’s problem by outsourcing the lot – but that can be risky. By throwing the project to external technical staff, you risk losing that direct relationship with a workforce who need to be your agents of change. After all, how can you become a digitally-native business when the people leading your digital transformation aren’t even in the same building?

Introducing slick automation and transforming the customer experience in the same way as the Amazon’s of this world isn’t easy. The only way you can do this is by instilling an understanding and capability around technology in every person in your organisation – not by relying on someone else to do it for you.

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You also need to consider who else is operating in your market, who are the newcomers and what are the adjacent industries. This will help you identify patterns of disruption that could affect the business. And this is all knowledge that you’ll need to have in-house or you’ll leave your business vulnerable to market disruption.

This can be easily achieved by working with coaches and specialist partners to make your whole organisation more capable and better prepared for this change. This is the best way to take your business and brand to the next level. A digital transformation isn’t something you can spend a bunch of money on and check off a list – it’s about the future of your core business, the future of your customers and what they expect.

 

Looking at the bigger picture

To be successful, you need to consider how to initiate and sustain innovation for your business for the long-term. This means creating the revenue streams and business models of tomorrow by tackling the legacy platforms and processes currently at your disposal and making them more efficient. There must also be a culture of testing and learning, as any company stuck in its ways simply isn’t ready for digital transformation. Just look at innovative start-ups like Uber; they never sit still and are always looking for the next big thing.

It’s clear from recent funding announcements (such as the chancellor launching an £84m AI and robotics fund in last November’s Budget) that the government sees communications and artificial intelligence at the heart of Britain’s ability to compete. And your brand has the opportunity to become one of the British businesses that leads the way in this space.

Fundamentally, digital transformation isn’t a project – it’s a journey that devolves digital skills to every person and process in your organisation. The goal is to get to a point where a large dedicated digital function of ‘doers’ is no longer needed, as the company can largely self-serve.

Whether your approach is to do it in-house or via a third party as we’ve seen with M&S, the reality is that digital transformation is something you can no longer afford to ignore. If you do, there’s every chance your business will become the next Blockbuster – a brand that failed to embrace digital innovation and is now a cautionary tale.
This article is from the CBROnline archive: some formatting and images may not be present.