Over the last few years, digital transformation has been steadily bandied about as one of the hottest corporate buzzwords in the industry. Today, it’s the talk of the town. It’s what many organisations are experiencing as they adopt innovative ways to do business. We hear about companies investing more and more into new technologies, digital data, business process automation, and even culture makeovers. But what exactly are they trying to achieve and most importantly - why?
For more insights on this topic, I recently sat down with Daryl Teo, formerly the Associate Director of Digital Transformation at the group enterprise of Singtel, who has a proven track record of leading and implementing digital transformation initiatives for both startups and distinguished brands. He currently leads the New Digital Business & Product division at the international arm of Singtel, supporting key initiatives in Esports (Gaming) and Digital Financial Services.
Why is it important for companies to innovate and adopt new ways of working?
These days, customer preferences have really changed. With social media and the advancements of digital technology, it’s not sufficient to just focus on what products and services you’re offering. It’s very important to focus on R&D or any other kinds of innovative ways that you can outthink your competitors. You also need to make sure that at the crux of it all, you are providing your customers with what they’re looking for and how you’re solving their pain points.
Why is it especially important for a big company?
Big companies today have the benefit of having key strategic advantages such as their existing customer base and a lot of economies of scale they can tap on.
However, it’s also very interesting to look at how new startups have just come in and built very different and innovative business models just by focusing on one key aspect of the entire customer journey. Just by focusing on that one key aspect, they will be able to dedicate a lot more focus and understanding of their customer, which leads to being able to innovate very precisely on how to really one-up the customer journey.
This is something that big companies can replicate in greater capacity. I guess there’s always that myth that big companies move slowly but if you look at what the biggest companies in the world today are doing, I think it’s very prevalent that a lot of them have started to move a lot faster. If they can move at that speed of startups by being a lot more innovative in what they’re doing, they naturally have the strategic advantages that startups don’t, which are very big customer bases that allows them to upsell and cross sell to. They are also able to focus on longer term strategic goals because they have longer runways, and existing revenue streams they can tap on to invest more into R&D and future products.
You’ve held key roles in leading digital transformation initiatives for both startups and bigger companies. Is there an ideal or “best” approach to digital transformation?
Broadly speaking, at the heart of the whole digital experience and a good digital transformation programme, it’s very important to bear in mind why you are even doing it in the first place. The key focus should really be on the consumer or the end customer. After you look at that, we can break it down into several smaller areas. The way I really like to put it is Process, Profits, Product, and People.
Firstly, key business process innovation - how do you make sure that you change your way of working into something that is newer? How can you improve on it by leveraging new digital technologies that were not available in the past? That’s the first bit - the way you’re doing things and the way you’re serving your customer.
The second one is to look at the business model, especially those business models which have existed across the years. In this day and age, when you have different digital methods and channels that you can sell your products from, can you start to do it a lot more efficiently? Can you be more effective in terms of problem-solving and delivering what your customers are looking for? Does that business model then enable you to pass on lower cost of serving, for example, into more affordable products and services?
The third bit is around what exactly is the right product mix you’re selling. For example, take Facebook - they have done innovation really successfully. They have moved from a social network into many other things like communication and payments. Or look at Amazon and what they have been doing with Cloud computing and AWS. I think these are great examples of how we cannot be just looking at our current business models. It makes perfect financial and strategic sense to look at what customers would be willing to buy from you, what you can leverage based on your existing services, and what you can sell to customers to open up new revenue streams.
The final bit is around people. The most fundamental underlying bit is how do you make sure that when you pursue digital transformation, you also grow the people you’re working with, grow the people you are serving, help them pick up new skills around technology, and how to stay relevant in this climate where technologies change all the time. By improving your own employees and end customers, you’ll be able to build a much better ecosystem.
You mentioned Process, Profits, Products, and People in your digital transformation approach. With these four key tenets in place, what are some key results you can expect to see in the organisation?
It really depends on what is or who you’re trying to serve, what you’re trying to solve, and what you’re trying to deliver. Digital transformation will take many different forms. A lot of successful business digital transformation projects out there have very clear objectives. With a very clear objective, that will enable you to branch out, dissect, and focus on a more strategic kind of objective that you’re trying to solve.
For instance, if I want to pursue customer satisfaction, then the net promoter score and eventual customer feedback in terms of both quantitative rankings and qualitative anecdotes will become very useful for me to really gauge how successful that transformation has been so far.
In a more corporate sense, there must always be a business case - what is the process before, what are the numbers before, and what is it right now. If you look at things like metrics from an operational point of view, are there some key numbers that have changed? For example, products delivered and customers served within a certain time period because of new technology. These are some considerations you can eventually translate into faster revenue recognition. Am I selling a lot more? Is my cost much better? Has my margin increased? Those are some of the many areas digital transformation can accentuate.
Digital Transformation - A Necessary Disruption
Thank you Daryl! Indeed, in this fast-changing world where businesses are constantly in competition to distinguish themselves from their rivals, time-honoured and traditional models need to evolve. Not only have consumers become more demanding and complex, companies eventually have to find new ways and tools to deliver value, increase revenue, and improve ways of working. Fundamentally, it’s not just about surviving, but thriving. Change is here - it’s time to embrace it.