Even so, digital transformation raises human issues: it’s no longer a matter of modernising tools but learning to use them properly. It’s a major challenge for our businesses if they want to maintain their position on the economic scene in the future.
DIGITAL TRANSFORMATION ISN’T JUST A MATTER OF TOOLS
When we say “digital transformation”, we simply mean the way tools are evolving and changing our way of using them and integrating them into our lives. The rise of the digital camera is a good example: its invention has rapidly changed use and buying habits, just like telephones made way for smartphones, e-mail is essential in our work, GPS solutions have replaced road maps, etc.
These new tools improve our comfort, efficiency, and even productivity, and accepting them has been easy. One example is checking work e-mails on our smartphones: it’s become second nature for many of us, sometimes even jeopardising our work-life balance. The right to disconnect came afterwards, on January 1, 2017 in France, allowing us to regulate this new practice and manage other related issues. So, inventing a tool and learning how to use it doesn’t tell us the best way to go about it, and above all how it should fit in with all the others (in an ultra-connected context). What environmental impact will the development of 3D printers have?
How will children develop, when even minor misbehaviour on their part is reported directly to their parents by mobile app? What will become of our society with widespread use of facial recognition? So many questions, yet so few answers and certainties: we’re only just starting to realise the scale of the changes affecting us.
A REAL CHALLENGE FACING US: THE EXAMPLE OF E-COMMERCE
For our businesses, there’s a great deal of work that needs to be done. Let’s take the example of e-commerce. On the one hand, buying on a computer or smartphone has become commonplace. Digital tools have also developed an unprecedented individual demand: we now think nothing of rating products (which can be customised), services, businesses, and even people. We’re unforgiving of mistakes, even though they are what drive improvement: flawless customer and after-sales services, near-zero delivery lead times, premium manufacturing quality, product origin tracking, smooth user experience, etc., are all criteria that have taken on great importance in the eyes of consumers, replacing their demands and experience at the centre of the sales process as a result.
On the other hand, competitiveness is growing against a backdrop of globalisation where digital tools can be used to break down borders. Plus there’s how far ahead of the pack the digital giants are (GAFAM¹ on the one hand, BATX² on the other). They have a growing impact on our societies. In the past, competitiveness and customer demands clashed, now they must be reconciled. It’s like a luxury firm targeting hard-discount customers… To achieve this goal, consistency is essential for a business, both in terms of its business model and its internal organisation. A brand could adopt a POS-specific pricing policy (i.e. adapting to the local environment), sell a product cheaper in one store than another, bill shipping costs on Click & Collect and even in-store pick-ups.
Today, the search for consistency is key. In the past, this brand could also select different ranges for different sales channels: now it must rationalise them, design them from day 1 with this search for consistency always in mind. At the same time, some USPs are no longer enough to win over the growing and increasingly-knowledgeable customer base. Who’s never seen a salesperson checking their own website to answer a question they’ve been asked? The expertise some brands boast about will only have an impact on a purchasing process if it provides real added value, making the trip to the store worthwhile.
HUMANS MUST BE FIRMLY POSITIONED AT THE HEART OF DIGITAL TRANSFORMATION
This lack of consistency has systematically had a negative impact on business or brand image, to the detriment of efforts made at other levels. This impact can sometimes even be disproportionate due to social networks, much to the chagrin of communications departments (and their community managers) who have to deal with this buzz, which is as destructive as it is unpredictable. Social networks, the best-known being Facebook, Twitter and Instagram, are above all mass communication tools that let consumers talk to each other. And we all talk more easily about something we’re unhappy about than something we’re happy with: these are the essential ingredients of this overblown reaction.
The whole business must adapt to this new way of thinking. From overhauling organisation charts to reviewing responsibilities, as well as adjusting Supply Chains or making changes to account management, digital technology must now be seen as a cross-disciplinary function separate from traditional online commerce as we know it. And what about the human factor in all of this? We’ve now clearly reached the crux of the matter: it’s about accepting and anticipating an unknown change, which hasn’t yet had a tangible impact. Other examples of this demonstrate that it’s not so simple to move forward under these conditions (with global warming top of the list).
Such changes can reveal conflicts of interest, like the issue of free order shipping: as customers, it’s pretty much the norm to pay no shipping costs (though most often there is some condition to be met: minimum cart, annual subscription, etc.) and this is now a basic online commercial practice; but as a business, how are these shipping costs financed? And what are the (often indirect) benefits that can be reaped as a result? These questions are harder to answer. Both points of view must coexist, but it’s up to the business to adapt to their customer.
CHANGE MANAGEMENT IS MORE THAN ESSENTIAL
Although it’s difficult to predict changes on the consumer side, their impact can still be minimised by managing change on the business side. For example new working methods, such as design sprint, mean we can focus on the fundamentals (customer experience). By working with every link in an IT production chain, but also customers during user test phases, a design sprint allows us to directly design a product meeting customer needs from day 1. As a result, this type of method means we can not only ensure the consistency of the business but also avoid the usual pitfalls of the traditional development phases (need for upgrades, recurring costs, etc.). Digital tools don’t just drive change: they also allow us to provide an appropriate response. For instance, the scale of the ROPO effect³ on a company’s business has always been hard to assess: to what extent does the web (searches made on it, advertising spaces used, etc.?) influence the sales revenue of a retailer’s bricks-and-mortar businesses (as opposed to online sales)?
Data processing now provides a partial answer to this question: a user can be identified as soon as they carry out a web search, their movements tracked by geolocating their smartphone, and their in-store purchases monitored based on their bank or loyalty card data. In other words, given the quantity and accuracy of this data, a business can have reliable indicators regarding the web’s influence on their business as a whole. Before reaching this stage, heavy investment in data is needed. Some businesses identified this promising opportunity early, and are currently well ahead of their competitors, with Google heading up the field. Though this raises societal and legislative questions (particularly regarding income tax).
One constant common to these businesses has emerged: they have a clear objective, fully gauge the scale of the work required, and equip themselves to get the job done, starting with their internal organisation (for instance, the famous “Google model”). The scale of digital transformation is still underestimated. At the same time, it’s constantly accelerating, particularly with the development of artificial intelligence, which is already leading to re-assessment of our conception of work. For any business looking to make sure of its place in the economic system of the future, it’s fundamental to understand this state of affairs.
There are also examples to follow that have proved remarkably far-sighted, such as the General Data Protection Regulation (GDPR), a Europe-wide law that predicted (in an almost visionary manner) the risks related to future sales or political practices, sometimes requiring major (and currently poorly-understood) adjustments and changes to our businesses.
¹ Google, Apple, Facebook, Amazon, Microsoft: the American giants of the digital economy
² Baidu, Alibaba, Tencent, Xiaomi: the Chinese giants, as opposed to GAFAM
³ “Research Online, Purchase Offline”, doing research online before buying the product or service in-store