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The time that organizations bet blindly on every transformation strategy is over. The new year will be dominated by a more pragmatic approach. Do you want to ensure that your data-driven ambitions will be converted into a future-proof organization in 2020? Then use the following 6 principles.
1 – Artificial intelligence is a means, not a goal
Nowadays, it seems as if every IT solution has a form of AI onboard, but is it relevant for your company to use this new technology? Smart companies should investigate per use case whether AI can be implemented in a relevant way.
A good example is the iconic HEMA store-chain. Helen Zuurmond, Head of CRM & Customer Service, describes the collaboration with HEMA’s CIO in an interview with“I don’t say: I want a chatbot. I ask: how can we deal more intelligently with the simple questions that the contact centre receives?” An AI voice application can help in this case, but not necessarily!
The lesson we draw from this: always think in terms of goals instead of means.
2 – Closing the last mile: from data to action
We can all agree that it is important to collect the correct data about the behaviour of customers. But how do you convert this data into serious decisions?
The companies that will emerge as winners in 2020 are able to quickly convert data into actions. You can only do this if your data systems are well-connected with your decision processes, so that you can respond immediately.
distinguishes itself by using big data effectively to speed up the production process. In-store cameras record customer feedback on items and this input is used in the design of new clothing. New items are delivered to stores in relatively small batches so that designs can be constantly adjusted when new feedback arrives. The time from sketch to rack? Two to three weeks. Zara knows its target group better than anyone and fixes any miscalculations extremely quickly, which means that it sells more with less leftover inventory.
3 – As-a-service is not the same as flexibility.
Everywhere you read, it says the subscription economy is here to stay. Nowadays, it’s Everything-as-a-Service (XaaS). The idea behind this is that users need functionalities instead of products. The thought is true in itself, but we did come across a major problem in 2019.
In recent years, companies have taken out so many service subscriptions that they have created fragmentation and at the same time, recurring cost items. Many as-a-service services are also sold in bundles, which is convenient. But hidden in this “convenience” are new risks, drowned out by the combination of low entry costs and a good sales pitch.
Many companies are now trapped in bundled as-a-service constructions and this dependence can even have a delaying and restrictive effect. Product teams are asked to develop functionalities within the technical context of XaaS and are thereby limited or lose sight of actual customer needs. In addition, this bundling introduces a new weakness because you may become too dependent on one as-a-service provider. For example, the H&M Group e-commerce platform, it’s a regular occurrence that all the brands (H&M, Monki, Arket, Cos, Weekday, & Other Stories) are unavailable at the same time.
In the new year, more XaaS providers will enter the market. Every CIO or CMO will have to critically examine whether the chosen platform set-up actually contributes to the customer experience and if it has a limited lock-in risk.
All H&M E-Commerce stores offline at the same time.
4 – Every innovation in the interest of the customer
Companies often find it difficult to put their customers first. The reason: there is often a big gap between the brand promise and brand experience. Many organizations are not yet equipped to deliver the best brand experience, because it requires a lot of adjustments throughout all the departments of an organization. In addition, the norm for users has become incredibly high, because needs have changed and digital market leaders are constantly raising the bar.
Tip for B2B: do not underestimate the impact of changes within the B2C customer lifecycle. B2B customers will also make fundamental decisions, which have more overlap with B2C consumer behaviour.
5 – Set yourself apart by embracing the digital privacy movement.
Make no mistake: you don’t own the personal data that you have collected about your customers, you only manage it. That transition started in 2019 with the arrival of GDPR and will continue on a larger scale in 2020. For example, from January 1, Silicon Valley has to deal with a law similar to the GDPR: the California Consumer Privacy Act (CCPA). This law gives consumers in California more control and insight into what happens with their data. Up to now, the US wasn’t that strict in terms of privacy. This new law has a huge impact on the business model of several “big tech” companies now that consumers can refuse the sale and storage of their data. California is seen as the state that leads the way, but there is a good chance that other states will soon follow.
Privacy and ethics will also be a hot topic in 2020 and that offers opportunities. By no longer being reluctant and taking a position. For example,actively decided to block cookies to prevent users being tracked without their permission.
Do you really want to be distinctive as a company? Then, not only obey laws such as the GDPR, but also create your own ethics. Map your data ecosystem and, for example, proactively approach your customers with the data you collect about them and ask whether what you have is still relevant.
6 – The need for a defensive mindset is decreasing. It’s time for the flexible mindset.
Generally, large organizations follow a conservative course. Once a certain size has been reached, the mission to improve the world suddenly gives way to a strategy in which stability, continuity and protection of the acquired position have priority. This makes it particularly difficult to implement changes and discover better ways of achieving the same goal. Everything that deviates from the way that has proven successful in the past is instinctively experienced as a risk. To limit these risks, large companies often develop a stifling web of rules, processes and guidelines. It will therefore not surprise you that organizations with a hierarchical corporate structure have the most difficulty keeping up. If you create a corporate culture that rewards following the rules, you cannot expect employees to take the initiative, to colour outside the lines. It’s not the fault of the staff, many corporates just do not give them room for that. They are regularly expected to pursue totally irrelevant KPIs and do that with the best of intentions.
Adaptability – and being able to encourage this among colleagues – is an increasingly important requirement, especially at board level. Are you able? If not, make sure you create room for the new generation.
By Patrick Klink
Patrick Klink is CEO at Onbrdng Digital Consultancy & Training. He is also supervisory director at various start-ups and scale-ups. His strength is translating strategy into action, building bridges between business goals and technical implementation. Patrick has over 20 years of experience with the digital transformation processes. Experience gathered as CDO, Product Director, Data & Tech at RTL, CTO at Sanoma Digital, Director at AT&T and as a board member/shareholder at Legian Consultancy & Network Services.