In many of the talks on Digital Transformation I’ve given around the world I often get asked how we measure the success of transformation. This question often seems odd to me. This is a business after all, the score card is clear, revenue. Many companies measure their success by the revenue they generate. When speaking to other executives I often frame the discussion in a way they will understand and so I focus on, money. By reframing the work we’re doing to be mutually beneficial we often achieve better engagement across all parties involved. We build software that produces X value to the customer and the customer pays us Y amount of money in return. This is often one of the biggest driving factors for transformation in the enterprise and a key selling point that makes sense to the C-Suite.
Customer Value Quantified
We can almost place a monetary value on customer experience, something that for many feels intangible as they transition from old work patterns. By understanding the customer journey and optimizing how they experience the software we almost certainly drive greater business value or money. This is extremely important in hosted SaaS applications where customers pay for a service via their credit card. Stickiness is difficult to achieve in this context. By delivering poor customer experience it becomes difficult to retain customers which will have an almost immediate impact on software consumption and revenue generation.
Bringing it All Together
Companies that can bring together Big Data, Analytics, the cloud, the Internet of Things (“IoT”), mobile, and rapid application development will drive transformation across their business at unprecedented rates. CEOs that drive a transformation initiative to disrupt themselves know they need to solve for 3 major challenges in their business:
1. Heritage Applications: Legacy applications hold much of the value for Enterprises. Yet the C-suite realizes they need to unshackle themselves from these slow moving monolithic systems and unlock their value.
2. Innovation: A key concern for many business leaders is how to take advantage of technology at the same pace as their competitors. More than pace though, they need to figure out how to unlock value and translate that value to revenue.
3. Delighting the User: The shift to cloud is not solely about redeploying existing applications in a cloud context. It’s about finding new value generating experiences that unlock customer loyalty and revenue.
Blueprint for Change
Further complicating matters is the fact that there’s no set transformation map that companies can follow. Many businesses are accustomed to watching early adopters and first movers and learning from the first wave. Unfortunately that luxury is not afforded to those embarking on transformation journey because each industry is being affected at a different pace and overcoming challenges in new and unique ways. The reasons are simple, at the heart of every company going through this change are organizational structures and people. Each has their own nuances and as a result the journey is unique.
We all must confront a stark reality: integrated digital technology is changing customer experiences, operating models, and business models. Many believe the shift to the cloud is fueled primarily by cost reduction but the reality is something different. IT spending is increasing because digital technology is improving enterprise performance in game-changing ways. The “Digital Leaders”, those companies that are already well on their transformation journey, are quantifiably outperforming laggards. Every industry is facing disruption and for those that have been moving slowly it is a matter of survival.