Realising Benefits from Digital Transformation

Have you noticed how conversations are moving on from “re-designing the website” to a more holistic view of how to use digital to improve performance across many parts of the business?

Often the web brings to the fore the need for greater cross-functional alignment  in developing a consistent customer experience across channels. Also, the process improvements necessary to support automated online processes can drive a re-examination of processes across other parts of the business. The Head of Online (a role that typically carries sales targets) has learned how to drive investment in technology, sometimes with more success than the CIO, by speaking in a language that ‘the business’ understands.

Towards the end of last year, consultancy house PwC released a paper which outlined some strategies for how organisations could leverage cloud technologies for growth. Buried within that report was a nugget on how to think about the benefits of investing in digital as a vehicle for organisational transformation. This chart outlines their views on the four benefits of digital transformation:

The Benefits of Digital Transformation - PwC 2010
The Benefits of Digital Transformation - PwC 2010

Let’s look at these briefly:

1. Enhance customer experience – Investing in digital technologies enables businesses in the first instance to meet the expectations of customer today. Digital provides the range of sales and service functionality expected by customers, however the real opportunity is to leverage digital in order to surpass those expectations.

Play New Tesco Iphone App Add - Video
Tesco's Innovative Barcode Scanning App

Check out Tesco’s new iPhone barcode scanning app as a great example of a brand that is stretching the use of technologies to provide greater utility to customers than even they might expect.

2. Drive revenue growth—Digital is enabling the development of new business models and new opportunities for growth by expanding the total addressable market across existing and new capabilities.

From an Irish perspective think about how bookmaker Paddy Power has transformed itself from owning a host of local bookie shops to becoming a successful international gaming platform; at the same time as rivals, rooted in old business models are shutting their doors.

3. Reduce the cost to sell, deliver, and serve — Automation of processes and empowering customers to complete purchase transactions and self-serve all help to take cost out of operating a business today. The per-transaction costs in a digital business are generally a fraction of the costs of traditional bricks and mortar operations.

A secondary benefit of driving efficiencies by going digital is the ability to rapidly scale, either up or down, as consumer demand shifts. Many newer businesses reliant on human sales and service offerings struggle to scale; since growth is coupled with with spiraling costs while customers experience deteriorating service – both of which can ultimately become fatal for the business.

The transformation of the travel and tourism industry is perhaps the best example of a sector that was forced to turn to digital as a key plank in its very survival. Led by airlines such as Southwest Airlines and Ryanair; clearly only a few have actually managed to develop efficient digital business models and still maintain a customer-oriented service culture.

4. Shift the balance from compliance to competitive advantage — This is perhaps the most interesting benefit outlined in the PwC framework. Businesses today operate in evermore regulated environments. While the regulations are generally in place to protect consumers; they tend to have a direct negative impact on customer experience. As regulators impose more protections for customers, businesses introduce more small-print to ensure that they cover themselves. This presents an opportunity for clever customer-focused businesses to develop better ways of dealing with compliance requirements.

Think about how heavily regulated the financial services sector is today. Rightly so, given many of the sharp practices that have been exposed over the years. However, anyone shopping for insurance knows how crippled online sales processes are with assumptions, terms and underwriting conditions. In the UK market this created an opportunity for aggregators, such as and, who came along and make shopping around easier for customers. In the Irish market, when I worked in FBD Insurance we tried to tackle this problem for customers by developing far more customer-led sales processes – explaining things in plain English and changing the order of things so they were less internally focused.

What do you think? Four pillars is over-simplistic but it does offer an interesting way of articulating benefits from technology investments. Can you think of other exemplar brands who have realised some of these benefits?