There are few if any organisations left untouched by digital transformation, according to the CEO of ecommerce platform Magento, Mark Lavelle. He argues digital transformation is now an issue for everyone and organisations doing it well were following a pattern for success.
“What’s happening now in digital transformation is impacting every single industry,” Lavelle said at the Magento Live 2018 Australia event in Sydney last week.
“It’s because attracting and engaging customers is now a digital act. Where we’re spending our time on screens, in social media , various places that your brand has to transcend to.”
Lavelle also noted the significant benefits of cost and efficiency savings, particularly for B2B businesses. Ultimately it means digital transformation had become an issue for every organisation and success meant more adaptable, customer focused businesses.
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The Magento ecommerce platform — which processes about $155 billion a year of gross merchandise volume — reveals the extensive impact and requirement of digital transformation, Lavelle said.
Follow the Revenue
Companies are catching on, according to Lavell who cited IDC research that suggested over half of the top 2000 firms in the world believe their revenue is dependent on digital experiences.
“The majority of the biggest businesses in the world think that this is where their revenues are going. So, [it is] far from the experiment stage [it is] very real. Every enterprise is realising that their enterprise strategy is actually a digital strategy and they’re starting with that first.”
The digital focus is being driven by buyer expectations “going through the roof”, Lavell said. Consumers now have unprecedented access to information including price and inventory transparency. “They expect to be able to engage with you as a brand 24/7, 365.”
Lavell also noted “the Amazon effect” where supply and delivery chains had been refined to a point where “things can literally be done instantly”. And while this is easiest to see in B2C transactions it is increasingly important for B2B buyers, according to Lavell.
The rising consumer expectations mean organisations must be “constantly on the front foot” and willing to experiment. “You have to figure out where is the next place my customers are going to want me and what is the new innovation that they’re going to adopting. Because they adopt them lightning fast.”
Patterns of Success
The nature of Magento’s product means Lavell is often a first hand witness to digital transformations. He says over time he’s noticed certain patterns and digital transformation truths.
“Once organisations become comfortable with these four things that’s when we see real digital transformation happen,” Lavelle said.
1. Be Bold with Your Brand
“You have to have a brand that cuts through,” Lavell explained. And while this was true prior to the digital age, the requirement has become increasingly important, according to Lavell.
“You walk into an organisation and you can tell whether or not the whole brand is going to be shifting into a digital transformation or whether this is just a side project.”
2. Embrace Digital first
True transformation is cultural, it means breaking down silos and must come from the top, Lavell said. It is a significant undertaking, but one that quickly moves from companies surviving to companies thriving, according to Lavelle.
“You probably have to change the way you’re organised in order to make a complete digital transformation. When we see companies embrace it, it quickly becomes a competitive advantage.”
3. Build flexibility into business.
“You don’t buy into certain technology or platforms expecting it to stay the same way. That’s a mistake. That’s the way that we probably did things 10-15 years ago,” Lavelle said.
Today’s climate means it’s critical to select flexible and scalable technologies, according to lavelle. At Magento they call it “owning the glass” – in reference to customers interactions occurring largely on screens. According to Lavelle, the flexibility means they can meet customers in a variety of channels including ones that aren’t yet apparent.
4. Innovate through Ingenuity
The final digital transformation truth is the “human factor”, Lavelle said. It is imperative companies embrace innovation and ingenuity, according to Lavelle. “We’ve found that these open methods of innovation tend to be what get big industries through these types of change.”
While companies often don’t have the human resources for this in-house, community driven platforms where developers offer solutions are a good alternative, he said.