EAE News
Digital transformation: What does it involve and what is it for?
18 de June de 2020
How can companies achieve a really effective digital transformation? What factors do we have to take into consideration and which strategies should we apply? The boom in the digital realm, driven by the effect of the coronavirus pandemic, has forced the business sector to accelerate its digitization processes. However, what does this transformation involve and what is its aim? The lecturer at EAE Business School and the founding partner of Fhios, David López, addressed this issue in an online conference held on 7th April.
To start the session, the lecturer emphasized that digital transformation is not a new term, but rather a concept that companies have been working on for years. However, he explained that “the pandemic has brought the issue centre stage and, as a result, almost all companies have been forced to initiate and embrace this change”.
Information society
To gain a thorough understanding of the implications of this transformation, the first factor that we have to bear in mind is that society has changed. “In the information society, customers have become autonomous and even set the rules. They can now consume whatever they want, whenever and wherever they want”, explained the digital strategist.
This change in society and consumer behaviour has taken place as a result of advances in technology and the market. Unlike in the past, today’s customer is characterized by certain aspects, such as the following:
- They want a personal service
- Your competitors are just a click away
- They have the power to make and destroy digital reputations
- Through technology, they generate collective behaviour and enable data generation
The lecturer emphasized that this customer empowerment is one of the founding pillars of digital transformation. This new customer gives rise to a new set of guidelines that end up forcing companies to embrace digitization.
As well as now being the makers and breakers of companies’ reputations, today’s customers now have the power to generate data that open up a new universe to facilitate marketing automation and digital marketing. These changes in the market and the way in which a brand’s reputation is formed have led to what López refers to as the digital opportunity.
“The digital opportunity refers to the benefits generated in the market nowadays by the new technologies available”, explained the strategist. Therefore, these opportunities will eventually drive forward the transformation of companies.
However, although it is crucial, technology is not an end in itself, but rather a means to achieve objectives. “Alongside the changes in society and customers, the role of technology is extremely important, because it offers and generates new ways of selling and reaching customers that were previously just unthinkable”, explained the lecturer.
Thanks to technology, nowadays we have access to:
- Omnichannel analytics
- Internet of Things
- Industry 4.0
- Mobile Marketing
- Blended Marketing
- 3D Printing
In addition, technology has enabled the development of one of the most disruptive trends with the most surprising results in recent years: big data. “Data is the new oil, and it enables us to identify customer behaviour, run extremely specialized marketing strategies and even predict movements and clicks”, explained López.
“Wallapop is a great example of the companies that now thrive thanks to data generation. It does not charge for each transaction made using its application, but rather it is sufficiently compensated by knowing who you are and what you have bought. You pay with your information”, added the lecturer.
Towards the end of the conference, the strategist turned his attention to the axes underpinning digital transformation at a historical level, listing the following factors::
- Technology: historical origin that facilitates transformation. Technology was used to boost efficiency.
- Marketing and sales: user experience. The user is placed at the centre.
- Business and strategy: impact on all business areas. Nowadays, we focus on strategy.
He then referred to a number of marketing academics who developed the first approaches to digital transformation.
According to Westerman, digital transformation consists of:
- Transforming or creating new business models.
- Transforming the customer experience.
- Transforming operational processes.
Moreover, according to Ross, digital transformation involves:
- Having a clear digital strategy.
- Having a set of digital services that facilitate innovation.
- Having an operational structure that enables excellence in operations.
Lastly, López gave an overview the 4 axes model, which outlines what he considers the essential factors of transformation:
- Customer experience
- Operational processes
- Business model
- People and partners
Before bringing the session to a close, he emphasized that “digital transformation is not simply a matter of marketing or technology, it is a comprehensive digital transformation of all the areas of the company”.