Analysis: It's not digital transformation. It's business transformation, say top marketers

Digital transformation - as challenging as it is to get started and carry on with the journey, companies are beginning to accept the fact that it is a crucial path forward that would help them futureproof amidst the pandemic. McDonald's Malaysia's digital director Muhamad Zaid Hasman told Marketing that companies can only achieve their targeted business outcomes when they reconcile the fact that the core of digital transformation is in fact, a business transformation.

He added that marketers need to rally all teams within the organisation to be on board the business transformation plan. Zaid is also of the view that digital transformation is about placing the business front and centre and allowing technology to enable this transformation.

To jump-start its digital transformation journey in Malaysia, McDonald's introduced a modernised and digitalised customer experience in its restaurants, also known as experience of the future. Currently, 80% of its restaurants are equipped with digital menu boards and self-ordering kiosks to offer customers full control of their ordering and customisation of products. These technologies coupled with AI and machine learning enables McDonald's to upsell and cross-sell the right products based on the time of day, according to customer's behavioural patterns, segmentations and restaurant capacity to improve business productivity and efficiency. According to him, McDonald's target is to equip 100% of its restaurants in Malaysia with experience of the future elements by early 2021.

Despite all the talk about digital transformation, the journey is still not easy. According to Zaid, rapid change of consumer demands and expectations as well as stiff competition would be the main challenges for businesses within the F&B industry. He added that for McDonald's Malaysia, digital transformation takes place across its 300 stores nationwide and the challenge for the company is to standardise the look, feel, and implementation of all digital innovations across its stores in Malaysia.

"If I could turn back time, I would start my digital transformation journey by focusing on disruption rather than digital strategy," he said. Zaid added that while there is nothing wrong with building digital strategies, these often divert attention away from more important goals. They include reduced costs, higher revenues, increased customer satisfaction, and other measures of performance.

Zaid added that digital transformation enables the company to improve operational efficiency, reduce complexities, and provide a high level of hospitality for a more personalised customer experience.

Meanwhile across the causeway, McDonald's Singapore's senior director - digital acceleration, foundational markets, Daniel Lee, said the main challenge posed by digital transformation is the natural resistance to changing the status quo. He explained that overcoming the status quo requires a huge amount of energy and needs talented and charismatic digital leaders to break through institutionalised thinking.

Lee added that this thinking is usually expressed in one of three ways:

1. This is the way we have always done it;
2. We tried that before and it failed;
3. It is not possible.

"True breakthrough and transformation comes about by asking 'What if' and having the organisational executive support it to make it a reality," he added.

In the last three years, Lee was the business lead on deploying a new mobile app to 59 markets worldwide, with a lean time and an agile development approach. While a mobile app does not sound particularly special, Lee said it has opened up opportunities for markets to build large “owned” audiences, rather than needing paid media to reach them.

He explained that the app is an integral part of each market’s marketing plans, and uses personalised offers, loyalty and ordering to drive the post-COVID business recovery. "We are well underway with data-driven CRM initiatives, powered by AI and marketing automation to help get the right offers and messages to the right customers at the right time," he added.

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Besides resistance to change, the lack of education, understanding and not being able to see the benefits of digital transformation are some other reasons why digital transformation fails, Abbott Malaysia's head of digital and CRM, Nicholas Goh.

"Sometimes, there are also too many stakeholders involved which do not speak the same technical jargons and are not familiar of each other’s processes," he added. For example, Goh said someone from digital media having to explain how and why some digital inventories are purchased on an auction basis versus being purchased upfront, to someone from procurement. He believes it is crucial to understand interdepartmental technical jargons and processes to a certain extent, especially if a task or process requires cross functional inputs. "This is because as part of the digital transformation process, everyone requires to use one unified system across all corporate functions in most cases," Goh explained.

Goh joined Abbott this April and one of the things his team is working on is digital dashboarding in place of churning out multiple reports from different systems. Goh explains that while this might not be revolutionary, the ability to pull data from multiple sources into a single platform dashboard, which can then be used to generate actionable insights and react in real-time, will definitely help Abbott enhance its customer experiences and customer journeys.

Not the only answer to achieving success

Despite it being a buzzword, digital transformation is not the be all end all. In fact, going digital alone is not the answer to achieving business success, Digi Telecommunications' newly appointed CMO, Praveen Rajan, who last held the CDO role said. For example, he explained that asking a company to list its products on an eCommerce site is not going to bring in the millions.

"What is also essential is teaching businesses how to market their products, deepening their digital marketing skills such as adding precision to targeted or personalised marketing, to enhance customer engagement and yield more business results in the process," he said.

When footfall to its Digi stores and partners' premises were impacted during the Movement Control Order in Malaysia, the telco quickly pivoted its sales strategy and within few days, moved all sales online and equipped its partners with the necessary digital tools and skills to conduct virtual live sessions on social media among others. According to Rajan, this was in an effort to keep the business going as well as continue building engagement with customers and within the local community of the stores, despite the limitation in having physical interaction in-store.

"We are customer obsessed, so everything we do is centred on the customer, and they are the driving force for every solution and product that we conceptualise and offer in the market today. Where there is an opportunity to make the experience better for the customer, we expect to continue to innovate to connect them to what matters most," Rajan explained.

Short-term results vs long-term value creation

The main challenge in digital transformation is maintaining the right balance between short-term results and long-term value creation, StarHub's chief digital officer Adam Stewart said. Therein lies a good opportunity to adopt new ways of working and drive for results.

"At StarHub, we deliver significant and measurable value to stakeholders iteratively, in step with our longer-term strategic vision. In this way, stakeholders will be able to see results along the development journey, resulting in stronger expectation management and alignment," he explained.

In addition, through this iterative development process, Stewart said the business teams are able to continually adapt and adjust products, services, functionalities and platforms such as My StarHub app and StarHub Online Store to continually offer customers a memorable experience.

"StarHub’s digital strategy is focused on end-to-end business transformation – going digital first with full customer centricity. Having embarked on this digitisation journey for a few years now, StarHub sells to, interacts with and supports customers through a variety of digital channels," he explained. Stewart added that customers' shopping behaviours have shifted even more due to the ongoing effects of the COVID-19 pandemic.

In particular, its customers have been responding well to online shopping and service, and it will continue making investments in this area to meet their needs. "Over and above that, digital transformation is about creating customer-driven x-channel platforms and connecting to partner ecosystems for us to be able to respond quickly to customer needs and market movements," Stewart said.

According to him, it is currently defining new customer journeys across the physical and virtual worlds with a strong emphasis on re-engineering and automating data structures and business processes.

As for StarHub's IT applications and systems, it is modernising its technology architecture to be able to deliver memorable experiences today, with increased flexibility for the telco to pivot quickly to meet customers’ future needs.

"Several other parallel transformation tracks include developing more intuitive customer interactions with AI chatbots, enhancing our My StarHub app to be an x-service engagement platform superapp for customers, and constantly strengthening our data asset and intelligence for smarter business decisions," he added.

Join us on a three-week journey at Digital Marketing Asia 2020 as we delve into the realm of digital transformation, data and analytics, and mobile and eCommerce from 10 to 26 November. Sign up here!

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