McKinsey & Company: The case for #digital reinvention

Digital technology, despite its seeming ubiquity, has only begun to penetrate industries. As it continues its advance, the implications for revenues, profits, and opportunities will be dramatic.

As new markets emerge, profit pools shift, and digital technologies pervade more of everyday life, it’s easy to assume that the economy’s digitization is already far advanced.

According to our latest research, however, the forces of digital have yet to become fully mainstream.

On average, industries are less than 40 percent digitized, despite the relatively deep penetration of these technologies in media, retail, and high tech.

As digitization penetrates more fully, it will dampen revenue and profit growth for some, particularly the bottom quartile of companies, according to our research, while the top quartile captures disproportionate gains.

Bold, tightly integrated digital strategies will be the biggest differentiator between companies that win and companies that don’t, and the biggest payouts will go to those that initiate digital disruptions. Fast-followers with operational excellence and superior organizational health won’t be far behind.

These findings emerged from a research effort to understand the nature, extent, and top-management implications of the progress of digitization. We tailored our efforts to examine its effects along multiple dimensions: products and services, marketing and distribution channels, business processes, supply chains, and new entrants at the ecosystem level.

We sought to understand how economic performance will change as digitization continues its advance along these different dimensions.

What are the best-performing companies doing in the face of rising pressure? Which approach is more important as digitization progresses: a great strategy with average execution or an average strategy with great execution?

The research-survey findings, taken together, amount to a clear mandate to act decisively, whether through the creation of new digital businesses or by reinventing the core of today’s strategic, operational, and organizational approaches.

More digitization—and performance pressure—ahead

According to our research, digitization has only begun to transform many industries. Its impact on the economic performance of companies, while already significant, is far from complete.

Read all: The case for digital reinvention | McKinsey & Company

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The business case for digital transformation | ZDNet

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Digital transformation investments are ultimately about business survival through disruption.

Such investments have a direct impact on customer expectations and go beyond the traditional ROI. The scope for disruption spans the entire customer life cycle, affecting everything from the supply chain to after-sales support.

Forrester recently researched the impact of digital adoption on CX and ROI and some of our key takeaways are below:

Disruptive transformation must be viewed as a strategic investment. The real value of digital transformation investments relates to long-term revenue growth, not short-term technology ROI.

Bolt-on digital projects do not change the fundamental value relationship that you have with your customer. To maximize the impact of digital investments, business and technology leaders must learn to value such investments through the eyes of the company’s customers.

A classic ROI calculation is neither always feasible nor desirable for digital investments. Digital transformation changes business processes and models. ROI works for single digital initiatives, but not for shifts in business models.

Digital investments aimed at disruptive change across the enterprise challenge traditional ROI calculations. Attributing benefits like customer satisfaction, group productivity, and group revenues — let alone business survival — to a single digital investment is impossible because so much of the impact of digital transformation is cumulative.

Read all: The business case for digital transformation | ZDNet

Making the right martech bets [Infographic]

How are leading organizations approaching their marketing technology (martech) strategy? Contributor Liam O’Connor shares an infographic summarizing recent research findings by Lenati and Chiefmartec.com.

Read more at: Making the right martech bets [Infographic]

Econsultancy: What’s the difference between #CRM, #marketing automation and DMPs?

Using a slightly dry but useful typology model (see figure, taken from Econsultancy’s CRM in the Social Age report), we can look at the various development stages of CRM.

 

Operational CRM:

‘reengineering the customer-facing business processes and systems to ensure the efficiency and accuracy of day-to-day operations across sales, marketing and customer service’.

Analytical CRM:

Storing, extracting, interpreting and reporting on customer data – to optimise business decisions and support customer-centricity.

Collaborative CRM:

‘integration of the front- and back-office processes that combine to support customer interactions.’

Social CRM:

‘Deliver a consistent customer experience across social media, using analytics to support customer conversations and response handling. Integration of social data with broader CRM.’

Read all What’s the difference between CRM, marketing automation and DMPs? | Econsultancy

Forrester Blogs: Top Trends For #CRM In 2017 – It’s All About Differentiated (Digital) Experiences #cex

tumblr_nyp7ltnwsg1tn6jt3o1_500We’re firmly in the age of the customer, where customers – not executives – decide how customer-centric their companies are.

And while good customer experiences can help control costs, executives are more interested in their potential to fuel sustainable top-line growth.

Forrester defines CRM as:

The business processes and supporting technologies that support the key activities of targeting, acquiring, retaining, understanding, and collaborating with customers.

CRM is the foundational building block of a company’s customer experience strategy to win, serve, and retain customers. It enables new business strategies, integrates to many technologies and is constantly rejuvenated by new trends.

Here are 4 of the 10 trends that we see in CRM in 2017.Customers want to easily connect with, interact with, make purchases from, or get service from a company.  For example, 72% of customers say that valuing their time is the most important thing that a company can do to provide them with good service. Companies must offer customers ways to easily engage with them to foster an ongoing omnichannel dialogue and relationship that strengthen loyalty and retention. And they will reap the rewards: Omnichannel customers are more active, spend more, and are less expensive to support than single-channel customers.

Trend 1: Companies are increasingly supporting digital customer journeys.

Read all: Top Trends For CRM In 2017 – It’s All About Differentiated (Digital) Experiences | Forrester Blogs