The essential three ‘i’s of digital transformation: rethinking intelligence, integration and impact
The question for the most important and influential of individuals at any company is no longer whether to change how they gather data, but it’s when and how
With successive waves of e-disruptions, from online social networks giving more power to customers to IoT (internet of things) multiplying the possibilities of collecting novel data, the question for the C-suite is no longer whether to change, but when and how.
At its core, initiating a transformation starts with taking the time to understand the nature and scope of the changes that have remodelled the competitive landscape.
In a nutshell, all e-disruptions have one thing in common —they profoundly reduce information asymmetry between different actors within a market (for instance, an apartment owner and a traveller), by making information immediately accessible.
At a strategic level, this new world reduces power asymmetries between leaders and followers, makes it easier for new entrants to quickly penetrate a market or gain influence (for example, a new product or a rising star savvy with social media).
At an operational level, the enormous corpus of digital data becomes the new lifeblood that flows within and outside of key stakeholders including consumers, competitors and collaborators. To tackle the challenge of digital data, building agility and responsiveness around data becomes the new criteria that distinguish front-runners from the rest of the pack.
Successfully driving the digital transformation typically means conducting concurrent changes in three areas where digital technologies and data profoundly change the face of business.
The first area is intelligence and requires seeing digital data as a source of insight and using this data in knowledge-creation processes to create competitive advantages.
With search engines processing a staggering 3.5 billion requests a day and massive quantities of content available through social media, digital data represents the richest resource of insights available to companies.
Building intelligence capabilities based on this data starts with listening to social chatter and engaging in conversations about topics that speak to customers or relevant stakeholders.
For instance, Intel in Asia Pacific has been particularly effective at building such capabilities, giving the organisation the means to listen to online chatters relevant to the brand and to engage in interaction with the online community to strengthen Intel’s core values.
In one case, when sexist comments on women engineers that were contrary to Intel’s values appeared online in 2016, it only took a few minutes for Intel to capture this information.
Next, the brand decided to engage in the conversation and highlight its own views regarding diversity and inclusion. In a matter of hours, the company pushed back by filming and sharing a couple of aspirational interviews of female engineers working at Intel.
The quick response successfully grasped the attention of key audiences for Intel, from customers to applicants and business partners and contributed to showcasing Intel as a leader in this regard, further strengthening its brand positioning.
Moving beyond conversations, an increasing number of companies are starting to integrate insights from social media and online searches to generate short-term insights and optimise operational decision-making. For instance, l’Oréal Paris actively tracks online chatters regarding hairstyles or skincare and integrates such insights into key operational decisions before it launches new brands and products.
In one case, the company even named a new brand after a very popular term that consumers were using when searching and discussing a hairstyle online (“Ombre”).
At a highest level, the combined sum of insights from consumers, competitors and the media often reveals fresh new insights about a brand – the “unknowns-unknowns” that matter for strategy building: which markets to enter, which positioning to favour, what potential risks might emerge?
For example, Tsquared, a pioneer in search analytics, works with several Asian brands from energy to FMCG and pharmaceuticals to help them understand their digital footprint and better leverage their brand by mapping relevant search behaviours and trends.
Band requires leveraging digital channels to transform organisational processes and create agility.
While the C-suite often recognises the importance of digital for companies, too many still decide to outsource the design and implementation of digital initiatives to agencies or consultancies.
Outsourcing is not without any risks as companies deprive access to prime knowledge (insights) and become less familiar with digital technologies.
In addition, they may end up losing touch with relevant digital data. By keeping the task in-house, firms advance organisational learning and ultimately increase company performance. To this end, AccorHotels recently acquired an Australian geolocalisation solution company which can identify pictures posted on social media anytime they have been taken from an AccorHotels’ location.
This enables hotels to collect strategic information from social media and online channels, allowing them to become more customer-centric by following its customers along each step of their journeys.
Successful integration first involves the creation of a common repository on successful and less successful initiatives accessible across the company’s different divisions to keep track of online and offline initiatives – a sort of digital memory.
Such memory can take various forms from simple spreadsheets to more complex data sharing platforms. This toolkit can provide a useful benchmark to learn from past mistakes, build best practises and stay ahead of the competitive.
Integration also requires gaining the ability to implement a continuous flow of digital data between the departments and division to make sure that everyone in the organisation is aware of external perceptions about the brand and its products or services.
In the hospitality industry, many hotels routinely communicate dashboards to hotels’ staff and even integrate e-reputation performance scores (for example, positive or negative changes in the hotel’s online reputation based on positive and negative feedback).
AccorHotels uses digital listening capabilities such as TrustYou worldwide which tracks online chatters on key dimensions of the services provided, from food to cleanliness, and has even integrated these new metrics into the staff incentive structure.
Some companies have fully absorbed the pace of digital disruptions by implementing new initiatives using IoT to create new sources of value. With the ability to collect novel data (for instance, a B2B manufacturer able to track where its products go worldwide), a company can become more knowledgeable and rapidly improve quality and learning across the organisation.
Recently, Rolls-Royce with the help of Microsoft started to insert trackers in their aircraft engines to monitor potential defects as well as the engine’s resistance and performance to different weather conditions. By increasing its knowledge, Rolls-Royce was able to extend its services to become a data provider for airline companies such as Singapore Airlines to help them better programme flight efficiency.
The third and final area is impact and requires rethinking how digital dynamics can improve a company’s value proposition. This often means connecting firms with their audience online – customers, collaborators and the media – to increase brand awareness.
Brands can also foster digital and non-digital interactions with customers to increase value. An increasingly widespread strategy entails ‘seeding’ products to key influencers to facilitate and speed up product adoption. Ultimately, taking the lead of disruption will entail using digital technologies through the lens of the customers to create a continuous flow of self-generated innovations.
In an increasingly fast-paced, fast-changing competitive landscape, embracing the digital transformation can mean the difference between retaining leadership, losing ground and eventually being pushed out of the game. Rethinking intelligence, integration and impact will be the first step to winning this vital challenge.
David Dubois is assistant professor of marketing at INSEAD