Jun 16, 2017 · by Fausta Ballesteros

Digital Adoption versus Digital Transformation: Adapt or Face Extinction

Consumers are doing business differently. That’s no secret. In today’s climate, they expect immediate gratification that is highly personalized and relevant, and they are not tolerant of wasted time or clicks. This is a time of great change and companies who get it, thrive. Companies who don’t are reporting losses, or even worse, shuttering. To understand the difference between the winners and losers in this game, we must look at the difference between digital transformation and digital adoption.

What is Digital Transformation?

Digital transformation is an end-to-end overhaul of business processes, consumer touchpoints and company organization that is customer-centric, agile and able to look beyond the status quo to leverage opportunities and solve pain points. Over the past two decades, many new companies have been born that have these qualities built into their DNA. For other companies, becoming digitally mature is a discipline they must commit to, albeit one with great rewards and business potential.

Let’s look a real-world example of a digital transformation. In 1997, Estée Lauder sold make-up at counters in department stores. Business was good but they had topped out. They relied on a high-touch advisory sale which meant that their customers must have easy access to local malls to buy their products. Estée Lauder’s response to solving this was through their vast network of independent beauty consultants around the world. However disseminating information and taking orders was a manual process, making it slow and cumbersome. This simply wasn’t scaling.

When very few retailers were considering a digital strategy, Estée Lauder was ready to innovate. Because of the consultative nature of their business model, eCommerce alone would not solve their problem. Their digital strategy meant arming their consultants with the tools they needed to grow business. With the help of Softvision, Estée Lauder implemented digital order processing, fully internationalized eCommerce sites to process orders, and an online learning portal to train consultants in a 135 different regions and languages. The company was able to keep their-high touch approach, meet customers’ needs and grow their eCommerce offering to a billion-dollar yearly business.

This process was transformative, far reaching, customer-centric and unarguably profitable.

What is Digital Adoption?

Digital adoption occurs when companies put digital front-ends on the same experiences they are already offering. Rather than changing their business from the inside out, they follow trends.

Let’s use Acme Widgets as an example of this. Acme has been the leading supplier of widgets for the past 125 years. They have great brand recognition, a tried and true model and they feel they know their business. But sales are slowing while they fail to adapt in changes in consumer expectations. They look at mobile as possibly a fad and not that relevant to them, so they drag their feet.

Eventually, a highly paid consultant tells them they can no longer avoid going mobile. In fact, perhaps, they could grow online sales if they build an app. So Acme sets out to build an app.

Their new app provides the customer the exact same experience, price and selection that’s already available in their stores and on their website. Sure, it makes a few sales, but customers routinely price-shop and buy on Amazon instead. The customer has no loyalty since the app was not made with the customer in mind, so price is the only differentiator Acme can offer. And let’s face it; they can’t afford to compete with Amazon.

Acme has adopted technology here, but they have not transformed anything. Acme’s problem is that they did not look for a new way to meet a new customer pain point. They’re the same company, offering the same value but with pixels on the front-end. For today’s consumers, that’s not enough. There are lots of Acmes that are closing their doors.

What Are The Qualities of a Digitally Mature Company?

There are four major components that describe a digitally mature organization.

  • They are customer-centric
  • They are hyper-vigilant
  • They are agile
  • They are connected

Customer-Centricity

Customer-centric companies look at their business through the view of the customer, first. Their goal is to provide value to the customer, first and foremost and they are always looking for ways to do this better. This comes even before selling product, because they know that if they provide value, the customer will buy their products. This fosters loyalty, meaning customers take joy in the experience and go back for more, taking price competition completely out of the equation.

Hyper-Vigilance

Digital maturity means not only following technical trends but setting them. These companies look for ways to use technology to solve problems for their customers, whether that means streamlining inventory processes to guarantee faster delivery or keeping a customer from missing a flight by announcing a gate change. R&D is part of their DNA.

Agility

Having R&D in their DNA does not mean they spend their time in slow-moving think-tanks. Digitally mature companies adopt agile processes not only with software development but across their entire organization. They follow a build-to-discover model, meaning they learn something new with each iteration. This gives them the flexibility to accelerate innovation and be change agents.

Fully Connected

Finally, the digitally mature company is connected. From back-end systems to customer touch points, they have abandoned silos. There is a constant flow of information, shared through intentional workflows and integrations giving them a 360° view of their business, all with the goal of optimizing the customer experience.

Evolve or Face Extinction

Digital transformation is not an overnight process. Companies who have been successful start small, ideate, test and iterate, until they have changed end-to-end. Having the right partner is a critical part of this evolution. The partner must interface as part of your team, holistically marrying design, strategy, and execution to continuously help you expand your digital maturity.

Softvision is a proven transformational partner who has worked with clients like Estée Lauder, Groupon, Kaiser Permanente, Neiman Marcus and Snap-on to reshape how they approach their business. These companies have adapted to the demands of the connected consumer are leading the charge while their competition struggles to keep up. To explore how we can work with you, drop us a line.

Fausta Ballesteros

Fausta Ballesteros

VP of Marketing and Communications
As VP of Marketing and Communication, Fausta supervises all global corporate communications and marketing programs, including Softvision’s relationships with the press and analysts, internal and external communications and content strategy. Fausta is also is in charge of marketing and enhancing the company’s relations with its customers.
Fausta Ballesteros
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