What is making some businesses rise above the rest in the post-pandemic era? Essentially, they're well advanced in their customer-led digital transformation journeys. They're making the right investments, breaking down silos and integrating capabilities. And they are delivering the services their customers want.
For millions of businesses around the world, the last year has seen life stand still, or go backwards. Growth was put on hold as organisations focused on simply surviving. But amid the chaos and disruption, it was clear that some companies were not just surviving, but actually thriving.
How were they transforming their businesses? What successes were they achieving through transformation? What were the key enablers of their success?
PwC set out to investigate. Between July and November 2020, we started research into how these organisations were succeeding in the marketplace. There are two aspects to our definition of a successful organisation:
They were seeing growth in a disrupted market
They were achieving the objectives set out at the beginning of their transformation journeys.
After polling more than 500 executives across Europe, key themes started emerging. And one thread ran through the market leaders. Digital transformation, that we define as any large scale change to the way a company operates, supported by developing enabling technology.
The companies most likely to succeed in the new normal are those putting the customer at the centre of transformation. They are enabling digital and virtual experiences through technology. They are delivering better customer journeys, enhancing the internal processes that support them. They're prioritising more agile ways of working, growing revenues and increasing efficiencies. That way, they are creating more loyal customers, better productivity and more engaged staff. Our research shows that three quarters have already started implementing transformations across both their front and back office functions.
By activating transformation, they are significantly more likely to have experienced revenue growth over the past six to nine months. As well, they have achieved a multitude of business benefits beyond revenue growth and cost savings. These include better customer experience and improved decision-making through analytics.
One key insight emerged. Organisations need to move beyond revolutionising siloed parts of the business, and focus on enterprise-wide transformation that produces valuable outcomes for them and their customers. To win in the market, businesses must connect the dots between sales, supply chain and finance. The common denominator here is the customer so they must integrate the key capabilities needed to produce the services their customers want. The only way to do this is through investing in digital transformation.
The research is clear: successful organisations spend time investing in enterprise-wide process and data capabilities. They enable change through technology implementation. They follow an approach that works backwards from the customer's needs. They understand the importance of continuous interactions between people, customers, employees and partners. They know that great operations support great experiences.
To break down the functional and political silos, businesses need the right combination of innovation, technology and leadership. Only then will they be able to coordinate company-wide activities and create valuable customer outcomes.
Customer experience (CX) was a key pillar of any digital transformation even before COVID-19 came along. Now, successful companies are focused on CX because customer experience and needs have shifted dramatically. They are continuously refreshing their CX based on customer insights. This is because good customer experience does not happen by chance but by design, and is the result of consistent attention and action.
You need a clear understanding of the customer journey from the customer’s perspective. You need to invest in understanding customer needs, how they interact with your organisation and what the moments that matter are. You need feedback loops to learn from customer patterns and behaviours, and adapt your services to meet their ever-changing needs.
Successful businesses understand that trust in their products, services and brand is a key market differentiator. Customers need to know that businesses will deliver on their promises, and keep their best interests in mind. They want to do business with purpose-led organisations. This means they need to know what you stand for and how you make an impact on society.
A digital transformation is as much about winning the hearts as it is the minds of your employees and customers. To create the outcomes you want, and to create the support you need for success, you must establish a foundation of trust within your ecosystem.
For organisation-wide transformations to break silos and change the game, it must be supported by leadership. Winning organisations have CEOs who sponsor and play an active role in their transformation programs. Strong leadership supports the cultural changes required to innovate and deliver new solutions.
Our research shows the top internal enablers for successful transformation are a well-defined strategy (49%), supportive leadership (48%) and an innovative culture of continuous learning (46%). In other words, successful businesses are investing in their people and helping empower them for the digital world.
There is also a clear need to support a wider cultural agenda and bring all employees on the transformation journey. Employees in businesses that are growing in the market are more likely to see their organisation as being open to change. And they feel their leadership has clearly communicated the value of change.
For transformation to succeed, it must be a top leadership priority, and not something that is delegated. It is important enough to consume leaders’ time, and leaders must both inspire the workforce and create an environment where their staff both accept the rationale for the program and then commit to change.
When used well, technology supports a business vision and is a differentiation point. Technology provides the ability to scale, create insights and enables key capabilities to improve. Many of these capabilities enrich the customer outcomes and experiences organisations need to grow revenue. The ability to do this well, and execute quickly, is an imperative in today's disruptive and volatile business environment.
But the key factor that sets successful businesses apart is what they use their technology for. They are using tech to pivot their product and service offerings to drive future growth. Other companies are more likely to be focused on creating efficiencies and savings.
In the current business environment, getting the orchestration of various technologies – and their implementation - is critically important to the overall success of an organisation. There is no separating technology from the business model. Technology is embedded in every aspect of the business. And digital transformation is central to building a foundation for future success.