Denis Clifford is the Chief Customer Officer at Virto Commerce, a leading provider of B2B digital solutions.
In the iconic “pill scene” in The Matrix, Neo is faced with a critical choice. If he takes a blue pill, he’ll awaken in the real world; if he takes the red, he’ll return to the digital simulation that has hijacked his mind.
Ever since the release of The Matrix, this scene has been the source of thousands of memes as we continue to invent new variations on the pill metaphor. Well, put on your sunglasses, because here comes another.
Going digital should not be a tough pill to swallow.
When transforming your business, responding to market dynamics or competitive pressures, you’re also often presented with binary dilemmas like this. This is especially true when it comes to fundamentally changing how you communicate, operate and deliver value to customers online, most commonly referred to as “going digital.” Should it be business-led or technology-driven? In my book, the best thing you can do is to take both pills.
In business, it used to be the case that even if you had an online or digital component, everything else offline was separate. We’ve seen that perception change at a lightning pace during the pandemic, which has been instrumental in driving businesses toward digital adoption and further blurring boundaries between analog and digital services.
And yet many still draw imaginary lines separating digital components from other aspects of the business. I am a huge advocate of a combined approach in which, rather than setting boundaries, you treat your digital efforts as part of the larger whole. After all, digital transformation has long become tantamount to business transformation, and all commerce has become digital.
Digital transformation is business transformation by another name.
I’ve developed this combined vision for transformation from observing a significant number of digital projects. Almost every project ended up going into so many different business areas that it became no longer about adding some digital component on top of existing operations but about transforming the business as a whole.
While the numbers are arbitrary, in my experience, as much as 70% of a “digital transformation” project is about those offline pieces, and the remaining 30% is the actual technology. The real danger of continuing to refer to this transformation as digital is to assume that, as soon as we organize our technology and people, then off we go. Honestly, that’s a mistake. It’s a one-pill approach.
For example, if a traditional B2B company has never traded online before, then it needs to transform its entire business—including areas like finance, marketing and shipping—in order to make digital sales possible. If we look at budgeting in particular, rather than having an annual budget that’s consumed quarterly, digital functions need much more flexibility because higher costs at the beginning proportionately decrease as the business reaps the benefits later. The same goes for sales, where there’s a huge transformation when it comes to trading online.
If previously your sales team’s responsibility was to go out and make a sale on site, now it’s your customers’ responsibility as they take ownership of their own orders. The sales conversation, therefore, has changed dramatically, becoming much more about helping your customers achieve their business objectives.
Instead of asking what product volume they need over the next three months, your salespeople should start asking questions like:
• What are your ambitions?
• How are you going to grow your share?
• How can we become part of that?
It’s a very different conversation from: How many units do you want this week? This is a more thoughtful, more involved process that requires a different set of skills.
Successful projects leverage a true partnership between a business and its IT.
For a significant return on your digital transformation project, there needs to be a true partnership between the business and IT. For maximum success, it needs to be business-led, with strategic objectives placed front and center. IT and business colleagues can share project KPIs related to market share, adoption, NPS, platform performance and others. But it is the business strategy that leads.
Remember: All commerce is now digital.
Speaking of business strategy, many still differentiate between their overall commerce and digital sales strategies. I believe such a distinction is redundant. Instead, we should talk about a commerce strategy that has a strong digital component.
In fact, I’ll go so far as to say that if you have a commerce strategy and a separate digital strategy, there’s something wrong with the structure of the business.
Going online will not solve your offline business problems.
A separation of strategies may come from thinking that digital transactions are somehow different. Indeed, “digital” is often seen as a cure for all offline problems. One good example is in loyalty schemes. The common misconception is that if you don’t have an offline loyalty program or your offline program isn’t working, then putting it into a digital format will solve the problem. But migrating to an online platform is not a cure for such issues. By all means, establish an offline loyalty program first and take it out for a spin online. You’ll find this will only expose offline problems, not cure them.
Digital commerce is not a dark art!
The bottom line is that so-called digital commerce is neither a silver bullet nor dark art. When going digital, you still need all the standard good business management practices in place in order to make your project successful.
I hope this serves as reassurance for anyone who looks at digital transformation with trepidation. There is no reason to hear buzzwords like “digital marketing,” “campaign management” or “customer experience optimization” and worry you don’t have those things in your business already. Well, yes, but you have other qualities that made your business successful, and they will mostly still be relevant. They just need some updating.
So if I were Neo in The Matrix, I’d take both the blue and red pills and have the best of both worlds.