The shift in Technology and Business
I was recently thinking about the question, “How could I influence organisational leaders to invest in technology today for the business of tomorrow?”.
A recent McKinsey Digital Global Survey found that 8% of companies believe their current business model will remain economically viable if their industry keeps digitizing at its current course and speed.
The means that 92% of businesses surveyed believe that their current business model is not going to be viable in the future.
Then, on the other hand, only 34% of companies have undergone a digital transformation. Is there a “wait and see” happening in the market place right now?
A future concern to this is that 34% have “undergone a digital transformation”. What exactly does that mean? They are done now and will be fine for the next 10 years. We are moving at an extreme pace as businesses we need to be continuously improving, striving and driving for a better tomorrow. The innovation never stops!
This all got me thinking, what is the purpose of an organisation and why is it important to innovate into the future….
The answer stems back to the simple truth. Business exist to serve customers, to add value and to solve problems for our customers. So has technology actually changed what we do as a business, or has it just expedited new and better solutions for our customers?
I want to explore the concept that I named Customer Centre. Since business is here to serve our customers, it would make sense to put them at the centre of a business.
The Customer Centre
At the heart of every business is our Customer, and as a business our job is to add value to our customers and solve their problems. Obviously, business is a lot more complex than this, so over the course of this article we’re going to be building up a model. Let’s place the customer at the centre to begin with.
Now that we have a customer at the centre of the circle, what’s next?
Each organisation that I have been exposed to has many ways that it engages, supports and interacts with it customers. Some of these would include:
To attract new customers we need to market to them; to understand their needs, problems, wants and desires to be able to attract them to our organisation.
Once we attract customers to our organisation, they will usually be taken through a sales process. A time where the organisation looks to understand the individual customer and their problems. If your organisation is able to help and solve the problem or challenge, you can then begin to deliver the solutions.
Delivery is when we provide the service and/or product to our customers. If you are a consulting organisation, this is the process of guiding your customers through a service. If you are a product organisation this could be picking, packing and distribution of the product.
Following the delivery, some organisations can move into what would be described as after sales care, a product warranty or the delivery of a support and customer help line.
These are the components of customer interactions that make up what I call the Inner Circle. Yes you could argue the fact for other components do belong to the Inner Circle. However, in simple terms if you are an organisation that delivers across these 4 quadrants well, you add value to your customers.
Business as usual
Throughout the history of business there were 3 components that have been required to deliver the parts of the Inner Circle described above: Our People, IP and Processes.
Our IP is our point of difference in our organisation, it is how we attract, maintain and even add value to our customers. It can be a product, brand, goodwill, copyrights, trademarks, patents, etc.
A great example of IP would be the KFC Secret 11 Herbs and Spices.
Processes are the steps for how we have systemised our IP. In some cases, our business processes can form part of our IP.
Business processes are where we can begin to build consistency and reliability of both service and delivery. McDonald’s is one of the most famous examples of how an organisation can systismise their business processes to achieve consistent results at scale. Think about it, there are over 37,000 McDonald’s restaurants worldwide and you can walk into any of these stores across the globe and know exactly what to expect.
The Two all-beef patties, special sauce, lettuce, cheese, pickles, onions – on a sesame seed bun.
The value of an organisation sits in its IP (what it does differently) and its processes (how it ensures consistency).
Since the dawn of business and commerce, we have required People to deliver value to our customers. Our people are the glue that holds it all together. They work together with our customers to deliver upon all aspects of the Inner Circle for our organisation.
Our people leverage the IP and follow the defined Processes of the organisation to deliver the desired outcomes to our customers.
This forms the basis of The Customer Centre.
So is anything missing?
In the 1980s something changed.
Our businesses met the PC, an introduction that would change the course of how we do business today. It was introduced as an efficiency tool, a machine that could help our People deliver move value.
Once the PC was in the hands of our People, digital technologies soon spread to all other parts of our organisations. The PC allowed our People to add efficiencies across Marketing, Sales, Delivery and Support (the Inner Circle) and we by default began to see Process innovations occur.
The next big innovation was of course the internet. Organisations began to utilise the internet to connect to their customers, drive further efficiencies and create new offerings. Now even our customers interact with our organisation via technology. Think of your Banking app, Uber to order a Ride or the Domino’s App to order a Pizza.
Technology in business
In Marketing we have automated marketing solutions, CRM, Social channels.
In Sales our businesses use CRM to manage deals, Ecommerce,
In Delivery we can have an ERP, Workflow management systems,
In Support we can have support systems, data management systems to track customer warranties
There is no area of our our businesses that is not impacted by technology.
Something to Think about.
If everyone is utilising the same technology across all areas of their businesses, how can a business truly differentiate?
Why would a customer engage your business over your competitors?
Is the answer still our IP, Processes and People. Or could there be something more?
A shift in thinking
We have all seen technology utilised across The Customer Centre; to add value to each area and continue to drive efficiency. However, to evolve our organisations we need to shift our thinking. Yes, we need to continue to upgrade our systems to help improve operations and deliver across all aspects of our business, but by doing so we are creating silos of technology?
Instead of thinking about how technology can fix a process or drive efficiency in a department how about we begin to see technology as a lever to scale our People, Processes and even IP.
If we place Technology alongside our People, IP and Processes this begins to shift the mindset and thinking within an organisation.
The evolution of business.
At the beginning of this article I pointed to a recent McKinsey Digital Global Survey that found that 92% of companies believe their business model will not be economically viable if their industry keeps digitizing at its current course and speed.
Further to this is a famous quote by the late Henry Ford; “If I had asked people what they wanted, they would have said a faster horse.”
As businesses we can easily focus on efficiency improvements. Taking our current business model (the horse) and looking at how we can make it faster!
We are utilising technology to deliver efficiencies across all areas.This is pivotal in business, but are we stopping to think about the value and outcomes that our customers are not even aware that they need?
Yes it is true that we need to continue to focus on delivering a faster horse, but does it really stop there? At what point will a competitor’s shiny new car come around the corner that better serves your customers?
The Taxi industry; disrupted by Uber!
The Newspaper business, disrupted by the internet news!
Books stores; disrupted by Amazon!
Music Industry: disrupted by iTunes & Streaming services
“How might we utilise technology to shift our business model, deliver more value and create a better experience for our customers?”
The answer to this question is clearly not a new CRM. However, if you are a business that is in the dark ages of pen and paper you will need to put a focus on how you can introduce technology across the Inner Circle to just stay relevant with your customers.
Step 1. The faster horse!
A new CRM could be a shift in customer experience (CX) that may impact your business revenues. If used correctly, you can record and track your customer interactions and improve the next conversation with your customers. Did you know that 75% of consumers are more likely to make a purchase from a company that knows their name and purchase history, and recommends products based on their preferences?
This simple improvement in CX can make a huge impact to your business.
Now let’s get back on track…
So “How might we utilise technology to shift our business model, deliver more value and create a better experience for our customers?”
This question will allow your business to deliver upon The Customer Centre. To answer this question you will need to engage your People, innovate your Processes, create and digitise your IP and utilise technology to deliver new value to your customers.
The word innovation has become quite cliché, it is now used in every industry and every facet of business. Wrongly or rightly it has been plastered on billboards, marketing material, used as a core value in businesses and even within taglines. But in the end we all must innovate!
I challenge you to consider how your People, Processes, IP and Technology are working together to serve your customers.
- Are you an organisation that has had the same business model for the past 10 years and are starting to see a decline in sales and revenue?
- Are you an organisation that is concerned about the impact that technology disruption can have on your business, or even your industry?
- Are you an organisation that is heavily invested in People and Processes but lacks technology foresight?
- Are you an organisation that sees technology as a tool rather than a possible strategic advantage?
When I look at technology today, I see it as an enabler to deliver great value to our customers; to empower your People and to showcase your Processes and IP to your customers.
Technology can transcend the role of a tool (a faster horse) in a business to an asset that delivers new value (the shiny new car). This will, however, require a major shift in mindset and thinking across your entire business.
It can all start by asking better questions.