7 STEPS TO

SUCCESSFUL
digital
Transformation
We are living in a new era, dened by disruption, innovation and
transformation facilitated by a wide spectrum of digital technologies.
Today digital is the name of the game in enterprises. Businesses are
disrupting markets, gaining competitive edge and achieving market
leadership based on the strength of their digital excellence. The evolution
of technologies- web, mobile, wearables, VR, etc., has metamorphosed
customer expectations putting enormous pressure on businesses to
deliver real-time services with personalized and memorable experiences.

Is technology excellence the only market dierentiator? If you answered

it in yes then you are partially right. While its true that businesses have
to be at the top of their game in leveraging the technology stack, it
requires much more. Technology needs to be complemented with a
robust strategy- the big picture, the new mindset and the supportive
culture.

In an IFS survey conducted among senior decision makers, 86% of the

respondents agreed on digital transformation playing a key role in their
industry in the next ve years, however, as high as 40% of the respondents
answered that they don't have a clear digital transformation strategy.
Clearly, many businesses are still struggling to nd answers to- what does
digital transformation mean? How to go about it? How to succeed? And
the common pitfalls to avoid?

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 High priority but no clear strategy

86% of the respondents agreed on digital transformation

playing a key role in their industry in the next ve years

76% answered that they need more information about digital

transformation

40% of the respondents answered that they dont have a clear

digital transformation strategy

Source: IFS

Primary Goals of Digital Transformation

74% 74% 66% 53%

Improve how Improve Obtain a Transform

organization products and competitive corporate
captures and services using advantage culture and
uses data digital operating
technology model

Source: SADA systems

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Top Benefits Witnessed from digital
transformation efforts

Question: What benets have you already witnessed from your digital
tranformation work?

Increased customer
Geater volume of web engagement in digital
and / or mobile trac channels

30% 32% 37% 37% 41%

Increased Positively impacted Increased market

customer revenue employee morale share

Source: Hungton Post

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digital transformation success tied to
measuring customer satisfaction

Question: What are the ve most important metrics your organization can
actually measure today related to digital transformation?

CUSTOMER SATISFACTION 28%

WEB TRAFFIC 27%

PRODUCTIVITY 27%

REVENUE 26%

CUSTOMER EXPERIENCE 25%

CONTENT ANALYTICS
(PAID, OWNED, EARNED) 25%

Source: Hungton Post

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digital transformation Challenges

Question: Each of the following describes dierent types of challenges

surrounding digital transformation initiatives. Please indicate the severity
of each challenge as it relates to your digital transformation eorts.
Responses marked Challenging and Very Challenging

Understanding
behavior or impact
of a new customer

Lack of data or ROI

to justify the value,
transformations

Risk management,
compliance, and/ or
legal complications

Resources
Changing
company culture
to be agile

Lack of digital
transformation 71%
budget allocation
69%
67%
64%
63%
62%
Source: Hungton Post

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1. Identify the leader

Digital transformation is not just about technologies, its about strategy,

people and culture. With technology available to everyone- from a
startup operating from a shared oce in Silicon valley to a Fortune 100
business mapped across the globe, its leadership that matters. Who will
lead the digital transformation in your organization? Your CEO, CIO or
CFO? Whoever leads the digital transformation needs to build a vision,
evangelize it across the company, prepare the roadmap and set it to roll.

Many businesses have also created a new role of Chief Digital Ocer or
CDO to lead digital transformation. Evaluate if your business need to
create a new role or any of your C-suite executive is capable of leading
your business transformation.

Digital Transformation
Who is Responsible?

THE CEOS VIEW THE CIOS VIEW THE CFOS VIEW

ME 56% ME 63% ME 69%

CIO CTO CFO CMO CIO CTO CFO CMO CIO CTO CFO CMO
22% 22% 56% 0% 38% 19% 25% 16% 44% 38% 3% 9%

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Air New Zealand

In a little over a decade, Air New Zealand has gone from posting the
largest corporate loss in its countrys history for being one of the worlds
most consistently protable airlines that has won airline of the year for
three years running on airlineratings.com. The key to its transformation
was two things. Firstly, a cultural shift to become genuinely customer-
centric encapsulated by their slogan: we y people. Secondly, the
companys greatly enhanced use of digital technology, particularly
analytics, has contributed to their success. Indeed, to fully underscore its
change in orientation, early in 2016, the company appointed a Chief Digital
Ocer (CDO) and dispensed with the traditional role of CIO.

In appointing former Google executive Avi Golan as CDO, the airlines CEO
Christopher Luxon said, Avi is going to play a critical role within our
business to enhance the new revenue opportunities that digital brings, to
minimize our online security risks and to drive customer innovation. Air
New Zealand uses digital technology to enhance customer experience in
many ways including:

Biometric baggage check-in

An electronic air band for unaccompanied minors

Excellent use of digital media in various forms, including its now

famous on-board safety videos, including this one Air NZ Middle
Earth safety video that has had more than 15 million YouTube views.

Source: which-50.com

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2. Build a digital vision

The power of digital transformation lies in its strategy. You need a

strategy that originates from the top of the organization, aligned across
various business functions, and brings about a signicant change in the
way business is done. A good digital transformation strategy identies
transformative objectives of your business, assesses the technology
maturity of the company, identies digital transformation enablers,
predicts challenges in the implementation path and prepares risk
mitigation strategy. Get your strategy right.

GE

Throughout its history, GE has been an owner, user and trader of both
industrial and nancial assets at incredible scale. At the core of its
transformation is the recognition that in the future, the key to ROA is the
intelligent use of data through all stages of the asset life from anticipating
a need, to design, to manufacture and test, to install, use and maintain, to
retire.

In particular, according to GEs Chief Digital Ocer Bill Ruh, predictive

maintenance is the key and to do this it has built an immensely powerful,
analytical platform called Predix. IT analyst Louis Nauges describes the
GEs approach as: To connect machines to the cloud and each other, build
apps to optimize their use and anticipate incidents and breakdowns.

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Others may regard it as the quintessential approach to the Internet of
Things or the fourth industrial revolution.

However you choose to categorize it, GEs is a pretty phenomenal and is

an ongoing story of corporate transformation and renewal.

Source: which-50.com

3. Build Partnership to complement

Digital transformation needs a dierent set of skills and mindset, many of

which, your organization might not be possessing. Rather than capacity
building on skills, its better to enter into partnerships with third party
vendors who have the capabilities and know the game. Internally, you
also need to bring people from across your organization- marketing,
sales, HR, IT, supply chain, etc., to collaborate and complement each
other in unifying your digital transformation initiatives.

UBank

UBank is an online-only Australian retail bank and a 100% NAB subsidiary.

UBank is a bold example of a large, well established company setting up
an entirely new, independently operated business with its own distinct
goals, identity, culture and processes that have very little reference to the

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parent. Key reasons why incumbents tend to resist setting up challenger
brands is that they fear cannibalizing their existing customers and doing
so at a lower prot margin than they currently earn.

UBank is a great example of NAB recognizing that:

younger, digital-savvy customers have dierent nancial needs and

service requirements;

as one of four similar sized major banks (25% market share),

executing successfully as a rst mover, will win more customers in
the target segment away from competitors than it will churn from
its existing customers; and

the combination of a narrower, simpler product suite and far lower

cost to serve i.e. no branches or large sales/marketing machines
constantly seeking cross-sell, oers a totally dierent customer
value proposition (CVP) that will only suit particular market
segments.

The key message of NABs UBank strategy for other incumbents is that, if
you clearly identify market segments of digital-savvy customers with
whom you are currently under-represented, create a CVP that matches
their distinct needs. Use technology to match their preferred way of doing
business and to give you a lower cost of delivery, you can succeed
without any material impact on your traditional, core business.

Source: which-50.com

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4. Embrace the new culture

Cultural change is a major driver to business transformation success. And

cultural change cannot be brought about through a communication from
the top management. This is where the role of digital transformation
leader comes in, bringing people from across the companies together,
communicating with them the need for change and objectives behind it,
getting into wider consultations to understand concerns and address
them, and then bringing them all to the same page. Every employee
should feel that there is a greater benet for him/her and is a contributor
in embracing the change. In the end, every stakeholder in the company
should identify itself with the new, transformed business, its value
proposition and expectations from individuals.

Analog culture Digital culture

Pushes products into the market Customers Pulls ideas from the market
Driven by purchasing and supply and demand Driven by customer demand

Strong hierarchy Flat hierarchy

Slow decision making Rapid decision making
Process and task orientation Organization Result and product orientation
Dened tasks (do this job) Empowered employees (nd a way to
achieve a goal)

Understands the needs of long-standing Understands the needs of digital

customers and how to fulll them customers and how to adopt new trends
Orientation toward status quo, past Orientation toward innovation,
lessons, and accepting constraints improvement and overcoming constraints
Experience and stability count Attitudes and Potential, vision, curiosity, motivation,
Homogenous teams, working within ways of exibility and adaptability count
departmental silos working Mixed teams working in cross-functional
Career progression within dened paths and integrated communities
Focus on planning and optimization Strong collaboration
Rapid, unpredictable careers progression
Focus on rapid launch and learn

Source: PWC

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Disney

Throughout its long history, Disney has been an innovative company, yet
has had many challenges along the way. However, in recent years, its
wholehearted embrace of digital technology across its entire business
has paid spectacular dividends. There are many ways this is occurring,
but one of the most visible is through a personalized MagicBand for every
guest at its theme parks and hotels. If the idea of going to a theme park
lls you with dread at the thought of waiting an hour for each ride, its
time to think again. Disneys billion dollar investment has paid massive
dividends for customers and the company alike. Through personal,
interactive tracking and highly sophisticated real-time analytics, the
quality of experience and eciency of assets have both been greatly
enhanced. Furthermore, with transactions becoming automated and
seamless, cast members (sta to you and I) have more time freed up to
create more magic moments such as spontaneous birthday celebrations
for children they can pre-identify and locate from their MagicBand.

Nor is it just in customer experience where digitals ROI is evident at

Disney. Labour scheduling accuracy has improved by 20%, which spread
over 240,000 shifts per week just in its theme parks, represents an
incredible payo. Elsewhere in its empire, store sales are up by 20%
following re-design and embedding of digital technology. Disneys
approach to technology can be summarized as transforming the
customer experience, driving operational eciency, personalizing
connectivity and cross-channel interaction.

Source: which-50.com

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5. Break Down Silos, Connect All

A connected environment is the core of digital transformation. Your

business must have implemented some digital technologies in the past.
An app for your customers, an enterprise portal for your employees or a
cloud infrastructure to store data. Today they might be operating in silos,
but with digital transformation, you now have the opportunity to connect
your people, processes, products and things. Take for example a retail
store- In the past, supply side and sales side worked in silos. Many a
times, the sales personnel are not up-to-date on the stock positioning
resulting in disappointed customers returning from stores. In the
connected environment, stock availability will get updated into the
system much in advance with information relay across the store chain to
give real-time status to all stakeholders.

Dominos

Dominos is explicit in stating, at Dominos, we are committed to being at

the forefront of technology innovation. Whilst the ultimate objective will
always be about increasing customer satisfaction and hence sales and
shareholder returns, Dominos doesnt talk about technology as solely an
enabler or a means to an end (as most businesses do), it sees technology
as a legitimate goal in its own right, particularly given its customer
demographics (mainly young people).

Consequently, Dominos transacts through any device and allows you to

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track your pizza being made and delivered, including via the Dominos
Robotic Unit; an autonomous pizza delivery robot. More than half of all
orders are now placed online. The company facilitates and encourages
customers to contribute and/or crowdsource the creation of new pizza
recipes and has over 1 million Facebook likes.

Source: which-50.com

6. Launch Quickly, Learn Fast

While planning and preparing are essential for a business wide

transformation, one of the keys to digital transformation success is
adopting the mindset of rapid launch, fail fast and learn. Companies
embarking on their journey to digital transformation must adopt this
mindset from the beginning. A year is a long time in the digital world.
Businesses need to implement their digital plan quickly, measure its
impact through data, get insights from it and learn fast to take suitable
action. So start quickly- If you succeed, scale it up. If you fail, nd a
dierent way of doing it.

Grays Online

Graysonline is well known as one of Australias leading e-commerce sites,

particularly for wine. In 1989, Gray Eisdell Timms started out as a modest
physical auction house based in Lakemba in western Sydney. It held its

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rst online auction in 2000 disposing of assets from the failed OneTel and
then progressively built its systems and capability over the next decade.

Although it was an early mover into e-commerce (where it has always

operated in both B2B and B2C spaces), Graysonline didnt have a grand
plan from the outset. It grew organically and worked with some fairly
rudimentary technology in the early days. Yet over time, it attributes, keys
to its success as staying very close to customers and their feedback, but
also, investing heavily in the warehousing, cataloguing and distribution
elements of its supply chain both in-house and with strategic partners.

Graysonline is a great example of an Australian success story that didnt

spring from a driving vision of a digital future, nor a massive up-front
investment but rather, an evolutionary path navigated by paying close
attention to customers and having a cohesive Board and management
team that has been well advised by its shareholders and other key
advisers and partners down the years.

Source: which-50.com

7. Think Like a Tech Company

Every business is a digital business now. Irrespective of the sector, yours

is now a technology company. What does it mean for your company? It
means- data-driven decisions instead of guess works, real-time decisions

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rather than on weekly meetings. It means listening to your customers
24X7 rather than on your business hours, engaging them one-to-one
instead of group engagement. It also means you own a platform not a
product/service and like a platform your product/service needs to
upgrade frequently in sync with customer expectations.

Service NSW

Service NSW is an ambitious change program that is using digital

technology (as well as greatly improved physical store environments and
service standards) to totally transform the speed, simplicity and quality of
the interactions between the NSW Government and its citizens and
businesses. The scale of the change is summarized in the graphic below.
Bringing Service NSW to fruition has been an enormous undertaking (and
remains very much an ongoing journey).

The teams involved have mapped close to 1,000 processes and/or

customer experience journeys across all parts of the NSW Government.
To be truly eective, the design improvement process then had to
consider how each process could be improved not just in its own right,
but in how an end user would see it in combination with a range of other
interactions that may span many government departments eg. starting a
new business, moving house or running a major public event.

Only then could technology infrastructure that not only supports inquiries
and transactions, but also maximizes the use of analytics and interacts

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with social platforms etc., be designed and implemented. While the
program is still underway, results to date are remarkable. In the physical
service centers, 20% of customers provide feedback and the average
score is 4.8/5. This is an outstanding level of any organization and
unprecedented in government, particularly when compared to the
experiences that Service NSW has replaced.

Source: which-50.com

3 Common Pitfalls to Avoid

1. Not investing in people

One of the challenges, digital transformation initiatives face is threatened

employees. Loss of jobs, change in work style, fear of insucient skills,
etc., are the most common emotions found. The best way to address it is
to communicate and train. Communicating the vision and objectives
behind the program would help people be a part of the program as
against it. Secondly, while the younger age group of employees or digital
millennials will be comfortable with digital adoption, the older age group
may nd themselves a little uncomfortable. Conducting training programs
for employees will not only help them update their digital skills, but will
also help them see the signicant benets gained from digital
transformation.

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2. Not knowing from where the next disruption will come

The taxi business was unaware till an Uber struck and disrupted it. Since
then the business has undergone a sea change. Airbnb did the same to
travel industry. The next disruption in your business can come from a
competitor or a completely unknown entity outside the industry. Its
important to keep your ear to the ground and be prepared to face the
challenges of disruption.

3. Ignoring the oine

While some companies can go completely digital, most of the companies

will have a signicant part of their business oine, in bricks and mortars.
Therefore, it is essential to bring the synergy between online and oine
parts of their business, so as to deliver similar experiences across
channels.

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About [x]cube

We are digital natives who drive large consulting led digital

transformation engagements for Fortune 1000 businesses and innovation
driven startups. With experiencing developing 50+ IoT solutions, many AI
rst products and hundreds of mobile based solutions- we solve tough
tech problems at high speed.

Our Clients

www.xcubelabs.com connect@xcubelabs.com 1-800-805-5783