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  • 4 WAYS TO ACCELERATE VALUE CREATION THROUGH DIGITAL TRANSFORMATION

    • September 26, 2020
    • Posted By : Nichefin Staff
    • Comments Off on 4 WAYS TO ACCELERATE VALUE CREATION THROUGH DIGITAL TRANSFORMATION

    Where do businesses see themselves at the helm of Digitalization?

    Digital transformation in the process of accelerating enterprise processes, requires the integration of every aspect of the business model into digital technology and assimilating it to provide and change the fundamentals of operating and delivering value to customers.

    GOVERNANCE FRAMEWORK AND COMMITMENT

    The value from transformation that corresponds with the process of digitisation disrupts the flat surface of the previously formed line of flight for competing enterprises. Company policymakers have to adapt to new environmental challenges by implementing new forms of automation and digitalisation technologies. We saw a similar boom of this scale of accelerated virtualisation during 2004-2006. With machine learning “codes” being integrated with natural language, this era is seeing a new stage of civilisational progress. Companies should formalize decision and implementation procedures and prescribe principles and guidelines. There should be serious commitment from the top. The board and senior management have to set their vision right on how to create value through digital transformation. Digital transformation requires reconsidering the business models in the light of external disruption. It is important to analyse internal as well as external factors to reframe the value proposition. Reframing may be in the form of expansion or modification or enhancements and these changes may cause cascading or rippling effects of other business areas or business partners across the value chain. This digital shift should be recognized for its rich pay off its value transformation.

    DERIVING VALUE FROM DATA

    Steve Lohr in his Chapter “How Big is Big Data” cites the case of the American Big Pharm company McKesson, which supplies a third of pharmaceutical products to the American demography; McKesson has taken a striking step further by cutting the inventory flowing through its network at any given time by $1 billion. The payoff came from insights gleaned from harvesting all the product, location, and transport data, from scanners and sensors, and then mining that data with clever software to identify potential time-saving and cost-cutting opportunities. The technology-enhanced view of the business was a breakthrough that Donald Walker, a senior McKesson executive, calls “making the invisible visible.”

    Data becoming a ‘raw material’ in the production process transforms and improves the machinery of decision making.  Machine Learning allows processing complex data which helps in deterritorializing the need for human intervention by reterritorializing them with predictive financial models.

    The McKesson drug distribution case—$1 billion less inventory, an efficiency gain of roughly 13 per cent—is a dollars-and-cents success story in big data.

    CUSTOMER SATISFACTION AND FEEDBACK LOOPS

    Customer Base Engagement can be enhanced and initialized through digitalization. Recent studies show that Global mobile and tablet internet usage exceeded desktop use for the first time in 2016 and we also see that 82% of consumers turn to mobile to help make a product decision. Through the digitalisation of before and after-sales services, several complex data structures can be virtualised and visualised to interpret customer behavioural and consumption patterns.

    By constructing a proper feedback loop, enterprises can efficiently build interactive models to maximise customer interaction and diversify its advertising and marketing application models to track and diagnose potential customers.

    21st Century business models are primarily built on customer satisfaction compared to traditional profit maximization models. This shift can be addressed and assigned mainly to the jump in scales of data consumption and other factorials that cannot be tracked using one-dimensional pen & paper vectors.

    BRAND VISIBILITY AND DYNAMIC STATERGIES:

    If the feedback loops can digitalise the locus of grapevine functionality, customer satisfaction can be analysed through surveying, as we previously mentioned, customer experience.

    Through this continuous process of surveying data, brand equity can be chalked out.

    Equity is structured on a base on Brand Awareness, Brand Loyalty, Brand Associations and perceived quality.

    This mainly helps B2C business which is in wild goose chase in a highly competitive market. The shift to “E-Commerce” is made pretty visible. “Efficiency” is what big e-commerce platforms thrive on.

    Mike Bainbridge, the chief digital technologist at Rackspace, sums up the approach:

    “Look at the companies that have been successful; brands like Uber and Amazon, they have made it so easy for their customers to book taxis and buy goods, and it is all driven by technology. They know exactly what customers want … The key to this is to put yourself in your customer’s shoes, put your customer-centric business goals first, and deliver seamless customer service.

    We live in the time of Industry 4.0 i.e. the Fourth Industrial Revolution, with the help of cloud computing small and medium scaled start-ups do not need to rely on Large Scale IT investments thereby making the functioning not only efficient but also flexible. Making the business model flexible also helps in building compact hybrid control flows in it. The customer consumption patterns are always changing, by making the model flexible and efficient, the company can adapt to the changes.By building such flexible ecosystems it moves beyond a normative and univocal customer-business relationship, the new age of Customer Satisfaction driven models has helped businesses generate value on the spine of large-scale digitalisation and virtualisation of processes.