A digital transformation journey is one with continuous steps and pivots. But how do we reassess and recalibrate to better move forward on our journey? In his opening keynote at the 2021 Chief Digital Officer Asia Summit, Darren Yong, Head of Technology, Media and Telecommunications, KPMG Asia Pacific, highlighted key areas for Chief Digital Officers (CDOs) to consider on their digitalization journey.
The pandemic has accelerated the need for companies to transform faster than ever before. One key reason is the exponential emergence of the digital native company. Consumer behavior has changed dramatically and is unlikely to revert to its original state. Whether it's the relatively recent and widespread acceptance of QR codes or our embracing of video communication, consumers have adjusted their behaviors across entertainment, health, shopping, and working life.
These digital natives are looking for easy access to services from multiple sectors at the press of a button or a swipe of the screen, enabling sector convergence. The consequential shift in business priorities is already evident. There are ride-hailing companies that offer consumer insurance, and e-commerce companies that have expanded into health and entertainment.
According to KPMG's CEO Outlook Pulse Survey released earlier this year, the top priorities for Asia Pacific CEOs in 2021 included onboarding digital technology to enhance customer experiences and developing disruptive technologies to improve the operating model. Interestingly, CEOs also saw the need to evolve business models to grow faster than what organic growth allows.
All organizations should be hyper-aware of the digitally savvy consumer, one who appears to evolve rapidly. Whether a business-to-consumer (B2C) or business-to-business (B2B) company, organizations should be receptive to the day-to-day changes in customer requests. So how do companies take this digital leap forward?
With the customer interaction model changing, there are now fewer friction points in a customer's digital experiences. Successful organizations think through these use cases, then align their front-, middle- and back-end IT infrastructure to respond. Otherwise, there is a real danger that organizations could spend millions of dollars and several years overhauling the entire back-end infrastructure, only to realize that the market has moved before the benefits reach the consumer.
Hence, companies should stage their digital transformation based on the first manageable set of user experiences they want to deploy, then the next set, and so on.
This use case-led transformation approach allows for businesses to quickly test and refine before scaling and aligning their businesses in a more strategic way. Bear in mind that not all use cases are equal, some use cases can be bundled together and require only small-scale technology or back-end transformation. In a perfect world, an organization can take data from different sources, combine it and create an action plan for that data; for example, a plan for a product marketing campaign.
Also of note, data sources for understanding consumers are exploding in number. To move ahead, CDOs should narrow the field and select a manageable number of use cases, which can help reduce waste and increase their chances of success and buy-in for future change.
Alongside the use case-led transformation, organizations should gain a thorough understanding of the digital native’s ecosystem, and incorporate this into their digital strategy, so as to provide a seamless experience.
Foreign banks are targeting high-net-worth individuals in Asia, trying to engage with these consumers. But do these individuals think and act differently compared to their counterparts in other parts of the world? And in what ways? The trick is in developing a different system — a clear path of targeting each consumer segment — for each country or culture.
KPMG recommends that companies evaluate the customer experience and "hyper factors" — these are localized in terms of systems and values, platforms and ecosystem preferences. For instance, Asian consumers in different locations might use different digital shopping platforms or chat applications. By understanding sub-categories in groups, companies can target these individuals with digital technologies and engage them at the right point in time.
To do so, organizations should not only look at entire populations, but also smaller clusters, engaging with these customers in their world, on their terms, with high velocity and low friction.
KPMG suggests that clients look at the changes that the pandemic has created in their ecosystem, study instances where immediate changes can deliver value, and then architect the digital transformation from a front- and middle- to back-office approach.
It is important to break the consumers’ digital journeys into small, manageable pieces. Large organizations are big beasts, and “an elephant is not going to become a cheetah overnight”.