Digital transformation is a top priority for companies across sectors as industries are disrupted every 5-7 years. Business models change, customer needs change. Digital is not only about building apps and websites, but involves the entire company: the business model, customer experience, funding, governance, skills, culture — everything.
In his keynote session at ETBrandEquity.com’s MarTech Asia 2020, Jaspreet Bindra, founder of Digital Matters and co-founder of UNQBE, demystified the fundamentals of digital transformation with respect to marketers. He said that digital transformation is the same as business transformation, backing this thought with real-life examples.
He began with an anecdote about a farmer in Maharashtra, who walked across towards Mumbai protesting against certain government policies. He kept himself connected with a solar panel resting on his head, which he used to charge his phone. Bindra explains that like this farmer, customers are far ahead of businesses and have figured out how to get things done even before businesses think about them, which poses a challenge to marketers — to keep up with the fast-changing customer.
He encourages marketers not to wear blinders and have an open, broad-minded view when it comes to business, as marketers are well poised to become chief executive officers of companies. Business transformation is a necessity, especially after Covid-19, he said. Industries are disrupted every five to seven years. Citing the example of the automobile industry, which saw disruption well before Covid-19 thanks to fleets, electric cars and autonomous vehicles, he said, as disruption is inevitable, digital transformation becomes a top priority.
“Digital is not only about building a website or an app,” said Bindra. People today have scores of apps on their phones, everyone is now building bots, soon it will be all about conversational AI. Digital goes beyond marketing and IT.
The difference between digital transformation and digitisation must be clear. Digitisation is inside-out, linear, predictable and about efficiency. It is an enabler of digital transformation. Digital transformation is outside-in, non-linear, and comes from the other end – the customer. It is the changes made to accommodate the changing needs of the customer using technology. “It’s a leap of faith, much like marketing. It is about the customer value proposition, which is why marketing sits in the centre of digital transformation,” he says.
Bindra’s ‘ten commandments of digital transformation’ include what he calls ‘the holy trinity’ – business model which he attributes to Brahma the creator, customer experience which he likens to Vishnu the preserver, and the people, culture and capability which he compares to Shiv, the destroyer. He says, “The holy trinity of digital transformation is pretty much the three things one must do anywhere to transform a company using digital tools or not.”
Many transformations will take place due to the consequences of the pandemic, every business will look at changing itself. Most business models are linear – have raw material at one end and final product on the other, cost on one and revenue on the other. Value is added by packaging, branding, distributing, advertising. The pipe business model or the value chain business model is what we have all grown up with. But of late, the business model itself is changing driven by technology. The new business models – platform models – have buyers and sellers on both ends, revenue and investment on both sides, such as Uber, AirBnB, YouTube – completely different from traditional business models. While technology is a big enabler for the new kind of model, the real driver behind this is the customer, who has changed.
“When we were growing up, status was derived from ownership. That’s no longer the case,” says Bindra. The younger demographic today prefers renting homes, furniture and even clothes, and hiring cabs – they tend to be willing to spend on experiences more. He attributes this attitude to the younger generation being far more environmentally aware than his generation. This is why the proliferation of the new business model has occurred. Gradually most industries will be sitting on platform or rental models rather than the make and buy models and technology is enabling this. While serving as the chief digital officer at Mahindra, Bindra worked on a venture called Trringo, which was like an Uber for tractors. You could rent a tractor using a mobile phone or app.
With the advent of Facebook, the concept of different online and offline personalities changed. Facebook removed the anonymity of chatroom handles, and people were pushed to merge or sync their online and offline persona. For individuals of the Facebook age, this differentiation between online and offline personalities never existed. Thus, the customer journeys have become more seamless. When one takes a cab through an app today, they go through various digital touchpoints such as booking the cab, setting the location, checking the estimated time of arrival, paying for the cab – without even realising how many times they have gone online due to the seamlessness of the experience. He stresses that this seamlessness needs to be brought in through all businesses, as the distinction between online and offline is becoming increasingly blurred.
Taking another page from his tenure at Mahindra, he reveals key insights that they found through an exercise: that the key decision making happens not in the showroom, but prior to the showroom. The journey had begun before that. The second insight was that e-commerce had ‘spoilt’ the customer, everything had to come home, for which they began providing test drives to their homes with a VR headset to see the various features and colour options.
When there was a drop in deliveries, Pizza Hut in the US found through a design exercise that their largest section of consumers – millennials – were not at home or in offices, but working out of parks, malls and coffee shops and the pizza would go there. To signify this change, they created shoes on which with a press of a button, pizza could be delivered to the customer.
“Our job is to see how we can change products using technology in our companies so we build user experience – this is the only differentiator,” says Bindra. “Successful digital transformations can succeed for many reasons; unsuccessful ones fail only for one.” He concludes his presentation with naming Google, Microsoft, Apple, Amazon and Facebook the ‘five horsemen of the apocalypse’ – which use data efficiently which makes them great. “Data is the single biggest commodity which is going to differentiate companies which are successful and which are not.”