Digital transformation of business: 3 driving factors
In a recent guest talk for the ADBL’s Executive Diploma in Digital Business, Neil Perkin gave an interactive talk on the digital transformation of business.
Named by BIMA (British Interactive Media Association) as one of the most influential people in the UK digital industry, Neil draws from his experience working with market-leading global businesses including Warner Bros, The Daily Telegraph, Samsung, YouTube, Marks and Spencer, the NSPCC, and many more.
In his talk for the ADBL on the digital transformation of business, Neil considers digital culture within organisations and how they can transition to become more digitally centric.
Here, Neil introduces three areas that digital has impacted the way businesses operate today, and why it’s essential that organisations prepare for the digital world of today and tomorrow.
CEOs: Technology the biggest external influencing factor
“From 2004, how technology has become the single most important external force shaping organisations according to CEOs in this global survey.
“One of the fundamental ways in which digital is impacting businesses is in how consumers make decisions about products and about services, and how they interact with companies.
“It’s rewiring the relationships between companies and their customers.”
Customer journeys in the digital age
“McKinsey analysed 20,000 customer journeys globally from a variety of different sectors, looking at how digital has impacted how people make decisions about products and services.
“What they found was that there is this circular model here, which talks about how people have quite a small initial consideration set of brands, because there’s lots of clutter, lots of information out there.
“But then they go into this active evaluation phase, where they might use search, to search around a category, they might take account of what their friends think through social media, or through reviews and so on.
“They’re information gathering, they’re evaluating, and then there’s the moment of purchase: the conversion.
“The use of content is particularly important, the use of conversion rate optimisation, and so on. Or in-store of course, the role of digital and mobile.
“[There are] two types of loyalty now. This idea of active and passive loyalty – that loyalty loop that you see going back there [in the chart].
“After we’ve bought a product or a service, if we have a really good customer experience with that product or service, then we’re far more likely to back and buy the same brand again… That is passive loyalty.
“Active loyalty, meaning I go back into this active evaluation phase, where I might use search and other things to evaluate other brands.
“The more you understand about the way in which your customers make decisions about your products and services and the role of digital and digital interaction points along that process, then the more you can understand the value of how you can interact with those customers.
Digital’s impact on company lifespan
“This [chart] is interesting work done by Professor Richard Foster at a Yale University. This is looking at the average company lifespan of the S&P 500, some of the biggest companies in the world.
“He did a piece of analysis: from 1951, the average lifespan of a company in the S&P 500 was about 62 years. That has reduced now to around 18 years.
“His prediction is that by the year 2027 around three-quarters of the companies that are in the S&P 500 will be companies that we haven’t heard of today.”
This article is taken from Neil Perkin’s guest webinar as part of the induction phase of the ADBL’s Executive Diploma in Digital Business. Watch the full video with Neil to understand why it’s imperative for businesses to rise to the challenge of transforming for digital.
Data visualisations: first chart from IBM’s CEO Survey 2013; second chart from McKinsey & Company’s The Decision Making Journey; third chart contains data from Innosight, Richard N. Foster, and Standard & Poor’s.