Spending on Digital Transformation will continue to grow as we move forward. According to market research firm International Data Corporation (IDC), the global investment in Digital Transformation technology is set to grow at an annual compound rate of 17.1 percent, reaching a staggering $2.3 trillion, or 53 percent of all ICT (Information Communication Technology) spending by 2023.
There is no doubt that 2023 will be a defining year for many organizations in terms of their digital strategy roadmaps.
1. EMBRACE A PARTNERSHIP ECOSYSTEM
Partnerships are a great way to leverage the unique perspective of a start-up in today's age. Forge strategic partnerships to upgrade service and product portfolios, transform existing business models, and enhance customer experience.A quick look into the market reveals how partnership collaboration drives business value.
Bank DBS Indonesia collaborated with CARInih, a technology-based company that prioritises a collaborative ecosystem, to support the digital transformation of small, micro, and medium enterprises (SMEs) online and offline.
The partnership facilitates customer transactions and guarantees smooth payment to partners.Standard Chartered also established a strategic partnership with commerce platform Bukalapak to strengthen Indonesia’s digital banking landscape.
Embracing a partnership ecosystem will enable organizations to pivot from a service-based to a product-first approach. If properly implemented, product-first companies can scale much faster than sales-driven and service-based ones. In fact, product companies will see higher margins and returns because the product will sell itself.
2. COLLABORATE WITH CUSTOMERS
With life cycles of digital products shrinking dramatically and technologies and customers’ needs/preferences changing so fast, organizations are under enormous pressure to innovate and market their products faster. The risk of lagging behind customer expectations can be mitigated by inviting customers to co-create with you.
One of the best examples of this would be LEGO.
LEGO's crowdsourcing platform has received suggestions from over 1 million people, with fans voting on the most popular ideas. This innovative approach helped drive the launch of 23 dedicated LEGO Ideas sets, which have proven very popular with LEGO fans.
Not only that, but the commitment to co-creation has helped lift revenue, saving this beloved company from dire straits.Global brands such as Unilever, Ikea, Heineken, Sodexo, DHL and many more have found success through co-creation, bringing long-term value to both their organizations and customers.
3. MEASURE WHAT MATTERS
You can’t manage what you don’t measure – applies as much to digital transformation as it does to any other business context.
We suggest dividing measures into four categories that directly link to how digital solutions can positively impact business performance.
i) Operational efficiency, or reduction of costs through improved operational speed and efficiency
ii) Customer engagement, or improvement in customer satisfaction and interactivity
iii) Employee engagement, or improvement in employee satisfaction and productivity
iv) New value creation, or creation of new sources of revenue and profit
A well-defined objective must be in a measurable format. For example, Cisco’s objective for digital transformation between 2015 and 2020 was 40/40/2020, where 40% of total company revenue would come from recurring sources, and 40% would come from software by the end of 2020.
Businesses have been forced to adopt digital business models that they may have been unfamiliar with in the past. In many cases, companies have discovered that the new digital processes give them greater flexibility, efficiency, cost-effectiveness, and responsiveness to customers than their traditional business models did.
In 2023, digital leaders need to examine the parts of their businesses that have not yet undergone a digital transformation and consider using a collaborative and measured approach to get it over the line.