How does today’s enterprise take the latest IT developments and use digital to truly transform the business? From enhancing enterprise offerings to powering the next generation of start-ups towards international success and sustainability, digital is at the heart of all things business.
As I outlined in my previous article, the digital enterprise is now a reality and has been built on digitally enabling employees. What is now crucial to address is how enterprises embrace the digital era and truly leverage its benefits. Digital enables new products and services and faster time to market, the ability to reinvent customer relationships and interactions and the opportunity to drive new revenue streams. But as with all things digital, it is vital to get your philosophy right first time.
Today’s customer engagement is driven by the customer’s terms, because they are digital individuals with clearer demands and expectations than ever. Digital has changed the customer’s habits and so it must therefore inform the business’s thinking. Enterprises that want to take customer engagement to the next level and drive business benefits from it need to focus on expanding the variety of digital interactions they have with consumers, as well as the scope and range of data creation. Customer behaviour demands it and the Internet of Things is one of the technology mechanisms that will power this need for change.
Another digital technology area that will drive transformation at enterprise level is artificial intelligence (AI). Current digital transformation initiatives are focusing on gathering and mining the massive amounts of data being generated, and that will transition into creating new models and algorithms that enhance work activities, that support consumers when they are making purchasing decisions and that consequently add value – and new revenues - to the enterprise.
One Orange customer taking the digital approach to transforming operations is Siemens. Orange is supporting the Siemens progressive vision for the manufacturing sector of digital factories, based around ‘digital twinning’, where digitalization and a virtual machine tool helps improve quality and efficiency in machine building. The results are already impressive, with the deviation in performance between a real machine and its ‘digital twin’ showing less than 1 per cent, the running-in time for the machine reduced by over 70 per cent and productivity increased by more than 10 per cent. IDC believes digital twinning is here to stay, predicting that by 2018, 75 per cent of G2000 companies will deploy digital twins of products, services and operations.
Digital impacting start-ups too
In addition to helping transform more traditional industrial sectors, digital is powering change in the start-up arena too. Digital technologies like cloud computing have made previously expensive infrastructures inexpensive, meaning start-ups can reduce their setup costs dramatically. Social media tools give them whole new routes to market and ways of interacting with the digital consumer, while Big Data lets them analyse data to a granular level and stay at the cutting edge of product and service development. Mobility keeps everyone and everything more connected and enables start-ups to stay agile in ways they never could before.
Orange is working with WayRay, a Swiss start-up, which has developed the world’s first augmented reality (AR) navigation system for drivers in the US, a solution projects holographic GPS imagery and driver notifications onto a car’s windshield – WayRay believes it will change the way we drive.
The point about digital is that it can enable start-ups to take an idea from an innovation to an international business in practically no time. It is not just about digital helping existing enterprises to thrive or survive, but about powering the next generation of businesses forward, disrupting traditional industries in entirely new ways.
Another example of an Orange customer doing just this is Konetik, a UK start-up, that is revolutionizing the fleet management sector. Konetik developed a plug-and-play SIM card-based fleet management tool that helps SMEs manage fleets of vehicles in a simpler, cheaper way than before. Having launched the service in Germany, digital technology is enabling them to then roll out in Germany, Austria, Switzerland and then the rest of Europe, quickly and efficiently.
So how do enterprises drive for digital?
But to drive these business benefits that digital undoubtedly brings means doing a range of things. It lies in recognizing that there is no one particular area to which digital applies – its advantages can be felt across the entire enterprise. Marketing, sales, automating operations, production, customer service – digital is revolutionizing the full set. So organizations need to take an end-to-end approach and utilize digital to deliver a joined-up customer experience for all.
Again the priority here is for the CIO, but all business units must buy in and be aware of the advantages available, which means removing silos and standardizing processes and systems as much as possible across the organization. It also means starting in the right place; because digital is all-pervading, businesses can sometimes wonder where to start – what to digitize first and where the most potential and value exist – something Orange has encountered with a number of customers. With that in mind we have invested in our digital business consulting practice to help our customers define their digital transformation goals – not just in terms of their workplace and internal processes, but also focusing on improving the offering they give to customers.
And reap the benefits
Use cases abound. Global coffee giant Starbucks has leveraged digital to drive major revenue increases – in the US, mobile payments now account for 21 per cent of all transactions in Starbucks branches, and the company reported an 18 per cent revenue rise in Q4 2015. Manufacturing companies are enjoying similar success, with more than half of US manufacturers saying they expect investment in digital ecosystems to boost revenues by at least 11 percent thanks to smart production plus new digitally-driven products and business models.
CA Technologies conducted a recent study that showed of companies in the UK that embrace digital transformation, 86 per cent of them have already seen or anticipate seeing growth in revenues and 85 per cent expect it to lead to increased customer retention.
Digital transformation is clearly for now and for the future. The model works and the philosophy is in place. By 2018, 67 per cent of Global 2000 enterprise CEOs have stated that they will have digital transformation at the center of their corporate strategy. Will you be one of them?
This article was first published on LinkedIn Pulse here.
Helmut joined Orange Business Services in 2007 to head up Europe and Russia. He is now CEO of Orange Business Services.