What Digital Transformation Means in 2020

Digital Transformation|12 Minute Read

What Digital Transformation Means in 2020

The year is 2010. Your C-suite asks you, an expert marketer, and your team to develop a “digital transformation strategy” that can help take your marketing (and metrics) to the next level — and fast.

You nod and say, “On it.” (Or something similarly reassuring).

Maybe you decide the best way amplify your marketing and business strategy, improve operational efficiency, and, in turn, transform digitally is to audit your martech stack — a great place to start.

Specifically, you decide you need a better customer database. Since this is 2010 — the relative dawn of the Digital Age and essentially an era with limited martech options — you research CRMs.

Eventually, you and your colleagues build the case for the CRM of choice, gradually fine-tune your presentation for leadership, and, ultimately, pitch your digital transformation “initiative” to them.

(In other words, you share the features, reviews, and pricing info associated with the software).

In this situation, you could’ve been praised for providing such a solution, in both senses of the word, for your organization. Further digital innovations (i.e., better-informed marketing activities and sales follow-ups) would surely follow the onboarding of this tool. Maybe even a promotion is in the cards.

And corporate becomes convinced the software is the magic bullet the brand has been waiting for.

Fast forward a decade (the “Post-Digital Era,” if you will), and it’s laughable to think digital transformation was perceived by countless company leaders, top marketing minds, and other business pros as essentially bringing in martech for the sake of doing so and hoping for the best.

Driving digital transformation — truly successful and scalable transformation — is far more complex and nuanced than simply identifying digital technology and throwing it into the marketing mix.

Don’t get us wrong: Having the right martech matters, but it’s one of many transformation ingredients.

Modern transformation requires both a high-level audit of the current business model — team structure, responsibilities assigned, and technology utilized — and deeper analysis of those areas to see what’s working, what isn’t, and what can and should be improved in terms of processes, culture, and tech.

With that in mind, let’s examine just how far business leaders’ views on digital transformation and the role of martech (emerging and legacy technology) related to it have evolved in recent years, highlight examples of innovation from renowned brands, and outline what successful transformation entails.

What is digital transformation today? The experts weigh in

Ask 100 marketing executives for their digital transformation definition, and you’ll likely get 100 different answers. That’s because, by nature, digital transformation is a fluid, ever-changing concept.

As business consultant Ian Patterson stated, more often than not, those who offer their own distinct explanations “either fail miserably with their [digital transformation] definition or just confuse people even more,” given everyone has their own unique take on the increasingly popular business practice.

Instead of offering our take (or listing many confounding ones), here’s how some insightful industry insiders answer the age-old (well, decade-old) question: “What is digital transformation?”:

what is digital transformation

Notice a trend? The beating heart (and desired result) of all digital transformation strategies — from the early digital age to today — remains essentially the same for all brands:

  • Putting the customer and their needs at the forefront of your overall strategy so you can achieve true customer centricity

Companies want to build customer-centric cultures through not only the adoption of critical business technologies, like the customer data platform (CDP), but also through refined business processes.

Half of enterprise execs cited “modernizing customer touch points” and “enabling infrastructure” to better understand their audience (i.e., implementing tech to track purchasing patterns and engagement trends, etc.) as the main impetus behind their transformation, Altimeter found.

The key to realizing this focus on customer centricity is to get the right systems, protocols, and technology in place and ensure everyone within an organization understands and owns their role.

As Forbes Technology Council’s Maurizio Canton noted, clarification around digital innovation goals, connectivity among one’s martech ecosystem (that is, data unification and the elimination of silos), and ongoing comprehension of customers’ changing behaviors and brand interactions are crucial for successful digital transformation and, in turn, improved business metrics across the board.

digital transformation

Effective digital transformation not always so simple

Many businesses — from mid-sized retailers to enterprise SaaS solutions — understand the importance of taking customers’ pain points and engagements into account with their digital transformation strategies. However, awareness doesn’t always translate into successful execution.

A number of other factors impact the outcome of a brand’s transformation. Just ask Home Depot:

  • The home improvement giant overhauled its digital presence to bolster both B2C sales (its bread-and-butter audience) and better convert more B2B customers, like contractors and landscapers, with whom it intended to develop stronger relationships with in the future.
  • While its intentions were good — “create a seamless experience for customers across its digital offerings and its 2,000-plus physical stores” and “break down internal data silos to get a clearer picture of customer activity” — the execution of its plan hit a bump in the road.
  • The company realized it had a “legacy technology” problem. It wouldn’t specify the nature of its legacy technology troubles. However, it did indicate it hired 1,000 IT staffers to help with its digital business transformation — a risky move that required considerable resources.

That’s not to say thinking big like this can’t or won’t pay off. Home Depot’s digital transformation story isn’t over, after all. The brand could still see revenue spike from its online renovation.

Rather, it means every marketer and business — including you and yours — needs to carefully consider what digital transformation means to them specifically, as it differs for every company.

We also don’t mean to paint a picture that digital transformation is impossible. It’s certainly more than possible for companies of all shapes and sizes to modify their business models around new digital initiatives, protocols, and technologies. In fact, there have been many prominent organizations to experience top-to-bottom success with their business modernization strategies in the last few years.

Case in point: BlueConic customer Bob’s Discount Furniture is a great digital transformation example (and noteworthy success story) for organizations of any niche or industry to emulate today:

  • The furniture retailer recently expanded its operations into new markets — Midwest and West — in addition to its Northeast operations. With this aggressive expansion moving along quickly, the brand recognized an immediate need for technology to unify its customer data, allow for efficient cross-channel activation, and afford its marketing team to easily track its buyers’ and prospects’ journeys, both from an individual level and through custom segments.
  • Speaking at our MarTech East 2018 session, Bob’s Discount Furniture VP of Customer Experience & Digital Innovation David Levin explained his approach to monitoring and improving CX for the Bob’s audience and the key role the right martech played in that: “How do we, as a company, leverage digital technology to make that customer experience better and more seamless for our customers?” Levin asked during the panel.
  • The answer to that question? Getting a CDP — ours — to aid the brand’s transformation. Specifically, Levin noted he picked on of “thousands” of use cases (“Do a better job at understanding and acquiring customers and activating them”) after onboarding the solution to more efficiently and effectively connect with leads and customers in its multi-channel efforts. The results? A 5x increase in data growth in the six-month period after onboarding BlueConic.

This transformation isn’t done, of course. Rather, it’s an ongoing endeavor for Bob’s with no particular finish line. But securing martech that connected all of its once-disparate databases allowed Levin and his department to hit the ground running and achieve ROI in a fairly quick time frame.

digital transformation

Questions to answer about your digital transformation strategy

Levin and others at Bob’s, including the executive team, took many things into consideration before beginning their digital transformation strategy in earnest, ranging from investigating the aforementioned technology choices to discussions about new and altered business processes.

Want to see the kind of success Bob’s had (and continues to have) in your own organization? Here are three fundamental questions to consider when building your very own transformation blueprint.

Who should entirely own our digital transformation?

This varies from one brand to the next. But marketing industry veteran Michael Brenner makes a convincing case for one department in particular to take lead on the overarching scope of the project:

That’s not to say others across your organization shouldn’t provide a helping hand to ensure the process moves along smoothly.

The aforementioned 2019 Altimeter digital transformation strategy survey found CIOs are the most likely role to sponsor digital initiatives, while CEOs are the likeliest to (unsurprisingly) take on a leadership role in some form over these efforts.

Going back to the Bob’s example, Levin noted he and his staff explored ownership carefully, asking:

  • “Was [the digital transformation initiative] going to live as a standalone department?”
  • “Was it going to live inside the marketing group, which had initially identified the need?”
  • “Or was it going to live within some other department [with] part of it in marketing?”

Invariably, other departments will want a say in the logistics and setup of your transformation. But as with a customer data platform, it’s something marketing needs to own and operate for the brand.

What exactly are we trying to solve for and achieve?

Predictably, different brands want to accomplish different things from their digital transformations.

Some companies want to streamline supply chains and accelerate speed to market. Others want to enhance cloud computing capabilities to enhance project collaboration across teams.

From a pure marketing perspective, you need to consider the problems you want to mitigate and goals you want to achieve. No one can decide on these exact issues and objectives except you and your colleagues in charge of your transformation. But as noted, you’ll want to factor in your customer.

More specifically, you need to figure out what you can do to better understand and serve customers:

  • To better understand them, you have to consolidate customer data from all of your core systems: CRM, DMP, ESP, adtech tools, and the like. As digital experts Thomas H. Davenport and Andrew Spanyi wrote for MIT Sloan Management Review, “[W]hen it comes to undertaking the tasks required to transform the customer experience, the independent silhouettes of silos stand out in high relief.” Eliminating data silos across your business isn’t optional today. It’s essential to gaining the complete, 360-degree, constantly updated view of your customers and, in turn, informing every facet of your transformation and day-to-day.
  • To better serve them, you need to activate that un-siloed data in both your long-term campaigns and real-time marketing. Prospecting emails, on-site dialogues, personalized ads — these are all cornerstone tactics for B2B and B2C brands alike. But the only way they can succeed today, especially with the recent death of third-party cookies (RIP) and data privacy laws like CCPA, is to take advantage of your dynamically updated first-party data for each contact in your unified database and customize the messaging for specific segments and individuals. Only the CDP can ostensibly provide you and your team this requisite view of your contacts.

The importance of a high-quality customer experience can’t be overstated enough today.

While some may argue digital transformation and CX aren’t one and the same, they are inextricably linked in that transformation must account for buyer personas, value propositions, and messaging around products and services offered — all of which, of course, tie back to your customers.

What tech is absolutely essential for transformation?

It’s this final question that should be addressed first and foremost by you and your leadership team, as choosing the right marketing and sales technologies will impact every other part of your approach.

McKinsey researched the success rates for digital business transformation of organizations large and small. One takeaway from the advisory firm’s analysis showed traditional tools still provide value for their transformation efforts, but emerging tech, like AI and machine learning, are impactful too:

digital transformation mckinsey

Big data solutions including data lakes and warehouses remain popular tools for marketers today. However, the CDP is supplanting these resources and similar software as the go-to martech to facilitate, streamline, and expedite transformation plans for countless brands, and it’s easy to see why.

Some CDPs, such as BlueConic, offer a true single source of truth, easy data activation, and advanced features the aforementioned technologies lack — like artificial intelligence functionality.

If you onboard a best-in-class CDP like BlueConic, for instance, you not only get the unified customer database that can resolve countless data issues (and prevent headaches caused by siloed data), but you also get access to out-of-the-box machine learning models included in our AI Workbench feature.

With two in five business leaders noting the incorporation of artificial intelligence across their organizations has positively impacted their bottom lines, per TDWI, it’s evident the advanced technology can prove fruitful for brands looking to transform digitally and increase revenue.

“[I]f businesses are to take advantage of the explosion of data as the fuel powering digital transformation, they’re going to need to artificial intelligence and machine learning to help transform data effectively, so they can deliver experiences people have never seen before or imagined,” data scientist Melvin Greer wrote for Forbes.

Artificial intelligence clearly is just one component of a modern transformation strategy — and one that offers new, intricate use cases seemingly daily. Having said that, if you’ve yet to experiment with AI and experience the powerful effects it can have on your business, now’s the time to invest.

ai for marketing

See what BlueConic can do for you.

Whether you’re looking for operational efficiencies or improved marketing effectiveness through data activation, our customer data platform can help.