Digital Digest: Learning from Digital Transformation Leaders
At this year’s MIT Platform Strategy Summit, Apigee’s CEO Chet Kapoor and I spoke about how established companies are re-building their businesses around today’s digital technology. In keeping with this, a new report from the Economist Intelligence Unit (the research and analysis division of The Economist Group) entitled “Digital Evolution: Learning from the Leaders in Digital Transformation” (free registration required) caught my eye with its opening words: “Digital transformation is the reinvention of business practices to derive the most value from digital technologies.”
We agree. The EIU’s report, based on a survey of more than 400 executives at large healthcare, finance, and telecommunications companies, provides useful context on the state of transformation—in particular, the importance of unlocking data in order to deliver immediate, interconnected, and intelligent experiences.
Digital transformation: a challenge, and an opportunity
The EIU reports that “evolving customer needs and expectations” is the most widely cited reason for pursuing digital transformation. This makes sense as a response to the mobile revolution: in our own surveys of adult smartphone owners in the U.S. and U.K., more than 90% have favorable feelings toward smartphones and apps.
But those the report identifies as “ahead of the curve” on digital transformation are almost twice as likely as those lagging behind (34% versus 19%) to cite as a motivation “disrupt[ing] our core business before it is disrupted by others.”
The leaders, in other words, view the changing market context as an opportunity, not just a challenge.
The power of seamless experiences
The biggest gap between those ahead of the curve and those behind the curve on goals for digital transformation aligns with what we see as a key to creating a disruptive competitive advantage. Nearly two-thirds (65%) of the former identify “enabling real-time transactions” as a key goal—almost 20 points more than the latter.
This is consistent with established companies aspiring to deliver the same kinds of experiences that are expected of digital natives. Despite the fact that adaptive apps such as Google Now were still a small part of the app ecosystem in 2014, our consumer survey found that 65% of smartphone owners in the U.S. and nearly half (49%) in the U.K. were more excited by apps that learned from their behavior than they were by standard apps.
This EIU analysis finds that those with the most confidence in their digital transformation are more likely to have integrated digital processes with their back-office infrastructure. These respondents were also more likely to have the ability to present a seamless experience across the customer journey.
We see the two working hand-in-hand, and agree with a comment made by an executive from Philips, a digitally innovative enterprise (and an Apigee customer): “We’ve been round for 124 years, and we want to be around for the next 124 … You won’t even be a business in 2025 if you don’t digitise.”