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Cut through digital hype

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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.

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Ford speeds into esports

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Across the world, millions of people every day get behind the wheel of a virtual Ford vehicle and enjoy racing against friends and as part of online communities. Now the company is going to be seeking out the best online racers to form its first-ever esports teams.

Starting at Gamescom, Europe’s leading trade fair for digital games culture, Ford will recruit national Fordzilla teams for France, Germany, Italy, Spain and the UK – as well as a European team consisting the star players from each national team.

In 2019, the global esports market is expected to generate revenues of about R16, 7 billion ($1.1 billion) up 26.7% year on year; the audience will reach 453.8 million people, made up of 201.2 million esports enthusiasts and 252.6 million occasional viewers. Contrary to the popular stereotype, the average gamer is in their early thirties.

Ford is increasingly intrigued by synergies between gaming and mobility and how they could help shape the way in which we all get about in the future – whether that is as commuters, as passengers in autonomous vehicles or simply enjoying the thrill of performance.

“The distinction between real and virtual worlds is blurring. Gaming is now a part of mainstream culture. Top gamers challenge professional race drivers in real life and many of our day-to-day activities are ‘gamified’, from using fitness apps to collecting loyalty points for a free coffee,” said Amko Leenarts, director, Design, Ford of Europe. “Harnessing the passion and expertise of the gaming community will help evolve our thinking around what future journeys will look like – something that we are all committed to and really excited about.”

In 2017, Ford became the first manufacturer to host a stand at Gamescom, which boasts more than 1,000 exhibitors that attract hundreds of thousands of visitors every year, and last year, the company pioneered the first-ever vehicle reveal at the show – unveiling the Ford Ranger Raptor.

Among the games that Fordzilla will compete on is the award-winning Forza Motorsport 7, developed by Microsoft Game Studios’ Turn 10 Studios. The Forza franchise is the best-selling racing franchise of this console generation and is home to one of the largest racing communities in the world. Millions of people worldwide play Forza games each month with 1 million players choosing Ford vehicles.

“We are pleased to see Forza Motorsport continuing to be the game of choice for big brands like Ford as they launch esports initiatives,” said Justin Osmer, Sr. Manager of Partnership Development at Turn 10 Studios, the creators of Forza Motorsport. “With millions of fans playing Forza games, we’ve seen significant growth in the numbers who want to compete, or simply spectate, in esports and it’s great to see a long-standing partner like Ford Motor Company bringing even more opportunities to participate.”

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How tech is keeping us young

Research by Lenovo revealed people who use tech feel, on average, 11 years younger.

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Technology is making the world feel younger, healthier and more emotionally connected, reveals new research by Lenovo, suggesting a growing relationship between technological innovation and wellbeing.

The research, which surveyed over 15,000 individuals from around the globe, from the US, Mexico, Brazil, China, India, Japan, UK, Germany, France and Italy, not only found 40% of global respondents feel “a lot” or “somewhat” more youthful thanks to technology, but on average it made them feel younger by 11 years.

This rings most true in China, where 70% of Chinese respondents said technology made them feel more youthful, which could be perhaps due to technologies ability to build connections between generations, especially those who might have once felt disconnected from tech-savvy youngsters. For example, grandparents are now able to better communicate with their grandchildren via smart technology due to its growing ubiquity and ease of use.

The research suggests that this sentiment is felt world-over, across genders and ages. “To know how to operate newer technology makes me feel younger” one US woman, said.  Another woman, from France, also stated, “Compared to the younger generation who are born with all these technologies, my adaptability makes me feel younger”. On the other side of the globe, one female respondent in India cited tech as making her feel like she “can do anything with it which any youngster can do,” and one Chinese male respondent said: “It helps me catch up with the times – not only gaining more knowledge, but also feel that I’m on-trend; I feel younger”.

The research generally revealed that many older generations think using technology helps them to connect better with younger people as well as feel livelier and more knowledgeable. This is especially evident when it comes to the role smart devices (from PCs, tablets to smart home assistants and more) play in terms of relationships with family and friends. When asked to compare technology today to those of 20 years ago for giving them the ability to feel connected to what is going on in the lives of the people they care about, 65 percent answered it’s “getting better”. While 75% also said technology is improving their ability to stay in touch with family and friends who live far away.

The global research also revealed that tech is helping people when it comes to mental health and wellbeing, offering emotional gains, particularly in parents. Over three-quarters (78%) of working parents stated the ever-connected nature of technology helps them feel more emotionally connected to their children, even when they are away from home. An even larger portion (83%) of working parents agreed that emerging technologies are making it easier for them to feel confident that their kids are safe and secure while they are at work.

Over two-thirds (67%) of respondents in the survey stated they were optimistic about the future of technology and the role tech can play in our lives and society, especially in wellbeing, with 67% believing devices are currently having a positive impact on the ability to improve their overall health. And that’s hardly surprising, considering 84% also said tech has empowered them to make improvements in their lives overall.

Take for instance how one respondent, a 51-year-old woman from the US, highlighted how science is using technology to do great things for amputees, and enabling those suffering from mental illness to better connect with people from all over the world. “I think that the medical breakthroughs we’ve had are a tremendous statement on how we can have a positive relationship with technology,” she said.

The recognition that tech is helping to improve the quality of life could also be a result of the time it tends to save people. Half of respondents across all markets (50%) feel their smart devices save them 30 minutes or more a day by helping them do something faster or more efficiently. Similarly, over half (57%) agreed smart devices, such as computers and smart home devices like smart displays and smart clocks, are making them more productive and efficient, the highest perceptions of which were seen in China at 82% and India at 81%.

In terms of personal health, 36% of respondents said smart devices have made it easier for them to access health care providers and make doctor’s appointments, and a further 39% of those under 60 years of age stated modern tech makes it easier for seniors to contact emergency services.

A 23-year-old woman from India, for example, expressed her belief that the technological advancement of medical science is helping people better fight diseases and potentially cure them. “Lives of people are better off nowadays because they know ways of curing such health hazards,” she said. “Through technology, increasing the life span of an individual is very much possible.”

Psychologist and founder of Digital Nutrition, Jocelyn Brewer, said: “Keeping up with advancements in technology can feel like a full-time job, but it can have positive impacts on people’s sense of themselves and their age. While older people are stereotyped as being techno-phobic or inept at staying on-trend, this research points to the fact that maintaining currency in the digital space helps people feel more youthful, more connected to young people and youth culture, which in turn is a social currency for feeling valued and a sense of belonging or in ‘the know’.

“It’s this tech knowledge that drives the perception of feeling younger, without having to revisit the angst of our adolescence!

“Staying connected to the people we care about is a wonderful feature of technology. And while it is no replacement for face-to-face connection, it is a valuable supplement to communication for those who might be geographically divided. Parents can manage a range of responsibilities and provide increasing appropriate autonomy to teenagers through a variety of communication tools, reminders and systems that can help take the struggle out of the daily juggle.”

Dilip Bhatia, Vice President of User and Customer Experience, Lenovo, said: “There is a growing relationship between innovation and wellbeing as smart technologies are not only helping people globally to stay more connected but aiding wellbeing in the form of compassion and empathy by building better connections between them.”

“Technology has a transformational ability to unite people across generations and walks of life around the world, with the potential to help them to live healthier and more fulfilling lives. At Lenovo, we passionately believe in creating smarter technology for all, which is why we focus on making our technology accessible, blending into the everyday lives for the benefit of more people.”

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