Digitization has brought about a radical shift in the relationship and the balance of power between businesses and their customers. After decades of concentrating on themselves and their brands, companies are increasingly focusing on the end consumer as the growing maturity of globalized markets leads to greater conformity of products and services. As a result, customer care is becoming the key differentiator between competitors.
The cumulative power of marketing, sales, e-commerce, and service is now critical to the development of a stringent and robust value chain. If a company neglects any of these elements, if it lacks a concerted strategy across all market-facing units, then its profitability will suffer. The chain will break. The company will lose market share, its margins will shrink, revenue will dwindle, and potential will be left unused.
The key challenge - and opportunity - is to create a smooth, seamless, and cross-departmental framework for marketing products and services. That is the essence of digital transformation in the business context. Today’s “connected” consumer is more knowledgeable, powerful, and status-aware than ever before, with very clearly defined and uncompromising expectations: “Give me everything, always, anywhere, and in real time—with the best customer care, maximum personalization, and at the lowest possible price!”
Competition is just a mouse-click away
And it’s not just retail that is creating this sense of entitlement - it is a particular feature of B2B commerce. After all, B2B vendors are not simply catering to individual consumers. They have to deal flexibly and appropriately with multiple individuals—who may have conflicting interests - within complex procurement systems. If they fail to do so, the competition is just a mouse-click away.
The ability to intelligently integrate and consolidate all customer-facing processes across the entire customer lifecycle has become a key competitive advantage and fundamental USP. It is essential in order to compete and succeed in volatile markets and under the immense pressure of rising customer expectations.
Digital transformation thus affects business processes, business models, and corporate culture. In previous decades, businesses were built on value chains, production processes, and operational structures that were linear, transaction-oriented, and mostly clearly delineated.
Today, markets are being fundamentally transformed by a range of forces that have already disrupted the consumer sector: savvy customers with high expectations in terms of personalization, a continuous flood of digital innovations, and the absolute necessity of responding immediately to sudden changes in market behaviors. In terms of strategic focus, creating a seamless customer journey has become the priority.
Where once they were concerned mainly with cost control and efficiency, businesses now have to respond immediately to every customer demand, offer highly personalized products and services, adapt quickly to dynamically changing markets, and adopt new innovations as they emerge.
ROI calculations are becoming increasingly insignificant
According to Darwin’s theory of evolution, the survival of any biological organism depends on its ability to adapt to its environment. The same principle applies to business “organisms” in the era of Industry 4.0. The importance of digitizing every aspect of the enterprise is clear and unambiguous: its about surviving in globalized markets characterized by massive upheaval across all industrial and service sectors.
Traditional, short-term ROI calculations are becoming increasingly insignificant and should only be used as tactical operational metrics.
What is called for is a digital vision—a strategic positioning with the primary focus on long-term business goals. This vision should be the sole basis for defining and driving technological developments and strategies as you guide your entire company through the digital transformation process.
John Chambers, Executive Chairman of Cisco Systems, predicts that around 40 percent of enterprises in existence today will not survive the era of digital transformation. Those that are too slow will simply be replaced—by those that are able to digitally evolve with greater speed and efficiency.