Digital transformation. What does it mean to you, to me and to the companies who use the term so openly? DR THOMAS OOSTHUIZEN, Global Consulting Director at Acceleration, shares his insight and experience on what the term may mean and should mean.
Words… words … words … When I speak to clients, I hear many different interpretations of what “digital transformation” is, illustrating that the term confuses as often as it clarifies. Some believe that it’s simply a matter of using digital channels to sell and service clients more effectively, more efficiently and in a more personalised manner.
A significant number think it is about a new application or digital marketing initiative. Many regard it as a matter of using technology to drive business process innovation. And others say that their goal is nothing less than to be the Uber of insurance or the Airbnb of banking. Digital transformation has come to mean all of these things and more.
But when a term becomes shorthand for so many perspectives, it loses much of its usefulness. If we are not clear about the definition of digital transformation when we discuss it in boardrooms, how do we create a meaningful strategy for the future? And how do we align our organisations behind our vision?
Definition impacts strategy and the level of its conversation, so it matters
What is clear from my discussions with large brands is that C-suite executives know that their industry, business environment, and customers are evolving, and that their brands and organisations also need to adapt.
What they often do not know is how to bring about the changes that will help their companies to be profitable, sustainable and competitive in an era of disruptive change (yes, disruption has also become an overused and misunderstood term).
The reality is that most companies are reluctant to disrupt their own industries, often because they fear cannibalising their customer base or eroding their own margins. Hence, most choose to tweak some aspects of their business with digital technologies rather than to transform their business models in a fundamental manner. Many scholars like Clayton Christensen suggest that a new business, outside of the current business, is often the best way to have the best of two worlds. It means a company can become more consumer centric by using data and technology well in its current business, whilst also experimenting with more disruptive options enabled by technology.
For example, they may change how they understand and engage with consumers with the aid of digital tools and channels. This is an imperative and no longer up for debate. Unless this is done, nothing else is possible. This is an approach that has the advantage of being realistic and manageable to implement. But is it enough for a large brand to keep the competitive high ground in today’s fast-changing consumer environment?
After all, consumers judge their experiences with all industries they deal with by the benchmarks the digital disruptors have set. Why should interactions with an airline or bank not be as easy and personal as dealing with Amazon? These are the big questions customers are asking – brands should be ready to answer.
Asking the right questions
We recommend that executives begin by discussing their business’s context, challenges and customers so that they can have a clear view of how digital competitors, technologies, and consumer behaviour will affect their brands in the years to come. This exercise is about clarifying language so the organisation can build a digital strategy based on a shared understanding of its challenges and desired outcomes.
The broad questions senior managers should be asking are:
· How exactly is digital technology changing the way our customers behave and the way that existing, emerging and potential competitors do business?
· What are the best companies across industries doing across the spectrum of digital enablement? What can we learn from them about the future of our industry and our business?
· How should we change our business to defend and extend market share, grow profits and ensure relevance as digital technology evolves in the years to come?
· An interesting point to note here is that the real nature of digital disruption for an established industry isn’t always obvious. Think, for example about Uber, which may have a dramatic impact beyond the taxi industry in the years to come. By making personal transport an affordable service commodity, it could eat away at the edges of the car and auto insurance industries.
Brands therefore must understand how consumers behave rather than simply looking at direct competition. Remaining relevant is not simply a matter of creating an app or smartening up their website, but finding ways to use customer data to create more meaningful and relevant customer experiences at every touch point. It is notable that consumers often do not have finite industry boundaries.
Beyond the obvious
By looking closely at competitors and the technology landscape, executives can see how emerging technologies and disruptive rivals could attack their market share. They can then create the strategies necessary to protect their market share and possibly identify ways to expand into new markets using digital technology.
The next step is how to do it, and the answer won’t be the same for every business. Some businesses will have visionary leadership, agile processes, innovative cultures, young workforces with digital skills, and modern technology platforms, so they’ll be able to embrace digital transformation more wholeheartedly.
Others may be encumbered by conservative leadership, legacy technology, regulation, siloed processes, and their workforces. They’ll need to look at their assets – data, customers, skills and channels – and find ways to put them to work in a digital world. In some cases, they might need to launch new brands, form joint ventures or innovation groups to fast-track their digital programmes.
In either instance, what really matters is that the business stays close to consumers, keeps its eye on new technologies, and keeps building new products and experiences that meet consumers’ evolving needs. There is no excuse not to become more consumer centric – for that to happen, data and insights are the starting points – and how marketing technology can support exceptional customer experiences. In the very least, this will enable a strong defensive against disrupters, even if it won’t protect a brand indefinitely.
So ultimately, underpinning the organisation’s ability to meet these goals is its ability to gather, organise and analyse customer data.
When will we stop calling them phones?
If you don’t remember when phones were only used to talk to people, you may wonder why we still use this term for handsets, writes ARTHUR GOLDSTUCK, on the eve of the 10th birthday of the app.
Do you remember when handsets were called phones because, well, we used them to phone people?
It took 120 years from the invention of the telephone to the use of phones to send text.
Between Alexander Graham Bell coining the term “telephone” in 1876 and Finland’s two main mobile operators allowing SMS messages between consumers in 1995, only science fiction writers and movie-makers imagined instant communication evolving much beyond voice. Even when BlackBerry shook the business world with email on a phone at the end of the last century, most consumers were adamant they would stick to voice.
It’s hard to imagine today that the smartphone as we know it has been with us for less than 10 years. Apple introduced the iPhone, the world’s first mass-market touchscreen phone, in June 2007, but it is arguable that it was the advent of the app store in July the following year that changed our relationship with phones forever.
That was the moment when the revolution in our hands truly began, when it became possible for a “phone” to carry any service that had previously existed on the World Wide Web.
Today, most activity carried out by most people on their mobile devices would probably follow the order of social media in first place – Facebook, Twitter, Instagram and LinkedIn all jostling for attention – and instant messaging in close second, thanks to WhatsApp, Messenger, SnapChat and the like. Phone calls – using voice that is – probably don’t even take third place, but play fourth or fifth fiddle to mapping and navigation, driven by Google Maps and Waze, and transport, thanks to Uber, Taxify, and other support services in South Africa like MyCiti, Admyt and Kaching.
Despite the high cost of data, free public Wi-Fi is also seeing an explosion in use of streaming video – whether Youtube, Netflix, Showmax, or GETblack – and streaming music, particularly with the arrival of Spotify to compete with Simfy Africa.
Who has time for phone calls?
The changing of the phone guard in South Africa was officially signaled last week with the announcement of Vodacom’s annual results. Voice revenue for the 2018 financial year ending 31 March had fallen by 4.6%, to make up 40.6% of Vodacom’s revenue. Total revenue had grown by 8.1%, which meant voice seriously underperformed the group, and had fallen by 4% as a share of revenue, from 2017’s 44.6%.
The reason? Data had not only outperformed the group, increasing revenue by 12.8%, but it had also risen from 39.7% to 42.8% of group revenue,
This means that data has not only outperformed voice for the first time – as had been predicted by World Wide Worx a year ago – but it has also become Vodacom’s biggest contributor to revenue.
That scenario is being played out across all mobile network operators. In the same way, instant messaging began destroying SMS revenues as far back as five years ago – to the extent that SMS barely gets a mention in annual reports.
Data overtaking voice revenues signals the demise of voice as the main service and key selling point of mobile network operators. It also points to mobile phones – let’s call them handsets – shifting their primary focus. Voice quality will remain important, but now more a subset of audio quality rather than of connectivity. Sound quality will become a major differentiator as these devices become primary platforms for movies and music.
Contact management, privacy and security will become critical features as the handset becomes the storage device for one’s entire personal life.
Integration with accessories like smartwatches and activity monitors, earphones and earbuds, virtual home assistants and virtual car assistants, will become central to the functionality of these devices. Why? Because the handsets will control everything else? Hardly.
More likely, these gadgets will become an extension of who we are, what we do and where we are. As a result, they must be context aware, and also context compatible. This means they must hand over appropriate functions to appropriate devices at the appropriate time.
I need to communicate only using my earpiece? The handset must make it so. I have to use gesture control, and therefore some kind of sensor placed on my glasses, collar or wrist? The handset must instantly surrender its centrality.
There are numerous other scenarios and technology examples, many out of the pages of science fiction, that point to the changing role of the “phone”. The one thing that’s obvious is that it will be silly to call it a phone for much longer.
MTN 5G test gets 520Mbps
MTN and Huawei have launched Africa’s first 5G field trial with an end-to-end Huawei 5G solution.
The field trial demonstrated a 5G Fixed-Wireless Access (FWA) use case with Huawei’s 5G 28GHz mmWave Customer Premises Equipment (CPE) in a real-world environment in Hatfield Pretoria, South Africa. Speeds of 520Mbps downlink and 77Mbps uplink were attained throughout respectively.
“These 5G trials provide us with an opportunity to future proof our network and prepare it for the evolution of these new generation networks. We have gleaned invaluable insights about the modifications that we need to do on our core, radio and transmission network from these pilots. It is important to note that the transition to 5G is not just a flick of a switch, but it’s a roadmap that requires technical modifications and network architecture changes to ensure that we meet the standards that this technology requires. We are pleased that we are laying the groundwork that will lead to the full realisation of the boundless opportunities that are inherent in the digital world.” says Babak Fouladi, Group Chief Technology & Information Systems Officer, at MTN Group.
Giovanni Chiarelli, Chief Technology and Information Officer for MTN SA said: “Next generation services such as virtual and augmented reality, ultra-high definition video streaming, and cloud gaming require massive capacity and higher user data rates. The use of millimeter-wave spectrum bands is one of the key 5G enabling technologies to deliver the required capacity and massive data rates required for 5G’s Enhanced Mobile Broadband use cases. MTN and Huawei’s joint field trial of the first 5G mmWave Fixed-Wireless Access solution in Africa will also pave the way for a fixed-wireless access solution that is capable of replacing conventional fixed access technologies, such as fibre.”
“Huawei is continuing to invest heavily in innovative 5G technologies”, said Edward Deng, President of Wireless Network Product Line of Huawei. “5G mmWave technology can achieve unprecedented fiber-like speed for mobile broadband access. This trial has shown the capabilities of 5G technology to deliver exceptional user experience for Enhanced Mobile Broadband applications. With customer-centric innovation in mind, Huawei will continue to partner with MTN to deliver best-in-class advanced wireless solutions.”
“We are excited about the potential the technology will bring as well as the potential advancements we will see in the fields of medicine, entertainment and education. MTN has been investing heavily to further improve our network, with the recent “Best in Test” and MyBroadband best network recognition affirming this. With our focus on providing the South Africans with the best customer experience, speedy allocation of spectrum can help bring more of these technologies to our customers,” says Giovanni.