In part 1 of our new eCommerce webinar series, our guest speaker, Forrester Principal Analyst Bernhard Schaffrik, provided industry insights and best practices to plan and successfully roll-out digital transformation for your company.
Bernhard Schaffrik of Forrester, gave a highly informative talk on how to successfully deliver digital transformation and the main challenges to overcome in the process, titled “How to Successfully Execute on the Goal of Digital Transformation... Beyond Out-of-Box Commerce Solutions.” If you were unable to catch this webinar, read on for our recap that highlights his top points, advice and wisdom.
What does digital mean?
"Do you think, live and breathe digital?" is a common adage. But what does having a digital mindset really mean? Schaffrik started the webinar by defining the term and how it relates to businesses, as well as other common phrases that go hand-in-hand with it. To begin with, digital refers to a different set of business models with technology at their core. In other words, being a digital company means that software is an expression of your business, and being a truly digital business indicates that you can quickly implement and continuously improve all operational processes and procedures in software.
Often you’ll see the terms “digitization,” “digitalization” and “automation” associated with “digital” and “digital transformation.” Sometimes these words are used inconsistently, so It’s essential to understand the difference between the three and get everyone on the same page for the definitions:
Digitization: Turning paper-based processes into software-enabled processes. They can be completed from anywhere at any time.
Digitalization: Rethinking a business model; adding digital services to existing products and services.
Automation: Reducing manual work in digitized processes. Automating manual processes doesn’t work before digitizing them.
Status quo of digital transformation
Schaffrik took us through what digital transformation looks like now in companies, and grouped them into three sections: digital beginners (have transformed experiences), digital intermediates (have transformed business models) and digitally advanced (have transformed markets).
Companies in the beginner phase have already deployed new experiences for their customers at the right commerce touchpoints with elements like responsive designs for devices, and great website and app designs. For companies in the intermediate phase, they have not only transformed shopping experiences, but have also transformed their business model to adopt digitally adjacent services to their existing services or product offerings.
Digitally advanced companies, consisting of digital natives and companies that have reinvented themselves digitally, are the ones that create new markets that didn’t exist before with new customer groups. They tend to grow much faster than companies in the beginner and intermediate phases, with half of them growing more than 10% every year. Most companies undergoing digital transformation are still in the beginner phase.
Companies embarking on digital transformation, but don’t quite get it right, tend to think that just providing an app or online shop that looks good is enough, and this can result in what Forrester calls “digital sameness.” Digital sameness, as the title suggests, shows a lack of creativity, with companies trying to have a fast solution to a significant challenge without really differentiating themselves from their competitors.
Many companies are shying away from asking their customers if they are willing to talk to them, and usually they are happy to give their feedback. You could also measure and use social channels and available data in order to discover what your customers think and do, but it's always better to have some real samples of customers to understand their needs and then you develop your commerce strategy.
Principal Analyst, Forrester (in the webinar)
Top 5 challenges with digital transformation
If you’re looking to digitally transform your company, Schaffrik outlines the following roadblocks to be aware of:
Company practices must be on the same page as the new digital experiences you’ve implemented for your customers.
End-to-end process thinking is required even more in digital business. You need to collect data from everywhere to create a seamless experience for your customers along every touchpoint.
Metrics that measure your success have not been updated to indicate the correct digital results.
Money is not going where it is needed the most and/or the budget allocation process takes up too much time.
Trying to constantly outpace your competitors is cumbersome. Defining your own market with your own digital offering creates barriers to entry and differentiation.
How to successfully transform
In his final section of the webinar, Schaffrik shares a survey from Forrester that assessed the opinions of 300 digital transformation leaders about what were the most critical organizational and technological capabilities for companies that were beginning their own digital transformation journey. Sixty-two percent said digital vision and strategy was a key capability to drive digital transformation success, 59% said cultural and change management and 41% thought it’s customer research and customer journey mapping. The bottom line is that all the capabilities that successfully drive digital transformation require soft skills – they need human beings to build them and human beings to convince other human beings what will and won’t work. This is why digital transformation can be so hard to achieve.
On the other hand, there are technological capabilities that are equally important, such as mastering data analytics and whole systems of engagement, and these are essential when it comes to understanding what drives customers. Forrester’s survey found that 50% of respondents believed that digital architecture is a key component in digital transformation success, with cloud-native and microservices-based architecture as the foundation as these technologies can handle the complexities of new commerce functions.
Avoid single vendor lock-in in order to stay adaptive from an architectural point of view. Also make sure that your commerce solution provider is able to scale as you grow your business.
Principal Analyst, Forrester (in the webinar)
It’s also vital for companies to start shifting their perspectives and seeing digital commerce as an entire ecosystem and not simply a tool. Digital transformation goes far beyond experience management; it also includes order, product, and warehouse and supply chain management, with deeper integrations into the backend systems down to a very operational level. APIs allow these to connect to a broader ecosystem of applications served by different vendors. Today, the most mature digital business leaders engage in a complex ecosystem of tools coming from various third-party suppliers.
Do you want to get the full story on Forrester’s take on how to successfully execute digital transformation for your company? Then watch the full webinar.