What Digital Transformation Means in 2021

Digital Transformation|9 Minute Read

What Digital Transformation Means in 2021

Driving digital transformation — truly successful, scalable transformation — is far more complex and nuanced than simply adding a new solution to your technology stack.

Don’t get us wrong: Having the digital tools and platforms in place matters. (A lot).

But it’s just one of many ingredients you need to improve customer engagement, increase business agility, enhance operational efficiency, and accelerate business growth.

Digital transformation in 2021 also requires a high-level audit of the current business model. That means reviewing team structures, responsibilities assigned, and systems utilized.

More specifically, it demands a deeper analysis of what does and doesn’t work in all facets of the business. Including and especially your people, processes and technologies.

What is digital transformation today?

Ask 100 marketing executives for their digital transformation definition. Chances are you’ll likely get 100 different answers. That’s because digital transformation is a fluid 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 practice.

Instead of offering our take (or listing many confounding ones), here’s how some 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 companies:

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

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

Half of execs cited “modernizing customer touchpoints” and “enabling infrastructure” to better understand buyers as the impetus behind their transformation, Altimeter found.

Realizing this customer centricity, though, requires the right technologies and digitally savvy stakeholders in key roles to “own” their transformation initiatives.

As Forbes Technology Council’s Maurizio Canton noted, there are three specific components of successful digital transformation strategies for organizations today:

  • Clarification around all digital innovation goals across each and every department
  • Connectivity in one’s martech ecosystem (meaning the elimination of data silos)
  • Comprehension of customers’ changing behaviors, preferences, and interactions

Ensure all three elements are accounted for, and you’ll not only continue to innovate as desired, but also vastly elevate growth-focused teams’ flexibility, agility, and efficiency.

digital transformation

Modern digital transformation examples

Many companies understand the importance of taking customers’ pain points and engagement into account with their digital transformation strategies.

However, awareness doesn’t always translate into successful execution.

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

  • The home improvement giant overhauled its digital presence to bolster B2C sales (its bread-and-butter audience) and better convert 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 hit a bump in the road.
  • The company’s leadership realized it had a “legacy technology” problem. It wouldn’t specify the nature of these troubles. But it did note it hired 1,000 IT staffers to assist 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 reap rewards from its work.

Rather, it means every business technology user at a given company needs to carefully consider what digital transformation means to their organization specifically.

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 companies to experience top-to-bottom success with their business modernization and innovation strategies in the last few years.

what is customer data platform

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

The renowned furniture retailer recently expanded its operations into new markets — the Midwest and West — in addition to its well-established Northeast operations.

With this aggressive business expansion moving along quickly, the brand recognized an immediate need for database technology to unify its first-party customer data.

Why? This would allow for efficient cross-channel activation, and afford its marketing team to easily track its buyers’ and prospects’ journeys across channels.

Speaking at our MarTech East 2018 session, Bob’s Discount Furniture VP of Customer Experience & Digital Innovation David Levin explained his CX-improvement approach:

“How do we, as a company, leverage digital technology to make that customer experience better and more seamless for our customers?”

The answer? Getting a CDP — BlueConic — to guide the company’s transformation.

Levin noted he picked one of “thousands” of use cases (“Do a better job at understanding and acquiring customers and activating them”) after onboarding our CDP to more effectively connect with leads and customers in its cross-channel efforts.

The results? A 5x increase in data growth in the six months after onboarding BlueConic.

This ambitious digital transformation isn’t done, of course. It’s really only just begun.

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

Digital transformation strategy FAQs

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 tech choices to discussions about new and altered business processes.

Want to see the kind of success Bob’s had (and continues to have)? 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 expert Michael Brenner makes a convincing case for one department to take lead on a digital transformation:

“Your marketing team is best placed to understand the customer journey … so your marketing department, led by your CMO, should be in charge of your overall transformation.”

That’s not to say other teams across your organization shouldn’t provide a helping hand in certain facets to ensure the transformation 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 Bob’s, 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 initially identified the need?”
  • “Or was it going to live within some other department [with] part of it in marketing?”

Invariably, other colleagues outside marketing will want a say in the logistics and setup of your transformation. But as with a CDP, it’s something marketing needs to own.

customer data platform

“What exactly are we trying to solve for and achieve?”

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

Some 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 (or outright eradicate) and goals you want to achieve with digital transformation.

No one can decide on these exact issues and goals except those in charge of your business innovation efforts. But, as noted, you’ll want to factor in your customer.

More specifically, you need to figure out how to better understand and serve customers.

To better understand your entire customer base, you have to consolidate your customer data from all your core systems and channels: CRM, DMP, ESP, and the like.

As business and technology experts Thomas H. Davenport and Andrew Spanyi, both of whom specialize in corporate innovation, 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.”

data silos

As noted, tearing down 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 your whole customer base, you need to activate that un-siloed audience data in both your long-term campaigns and real-time, lifecycle marketing.

And only the CDP can provide you and your team this requisite single customer view.

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

While 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 tie back to your customers.

“What tech is absolutely essential for transformation?”

This should be addressed first and foremost by your leadership team, as choosing the right business technologies will impact every part of your transformation approach.

Big-data solutions including data lakes and warehouses remain popular digital platforms marketing, analytics, data science, and related teams use to understand individuals.

However, the CDP is supplanting these systems as the go-to tech to facilitate, streamline, and expedite transformation plans for many companies. And it’s easy to see why.

For instance, BlueConic’s CDP offers four core capabilities every company needs to build scalable engagement strategies and accelerate business growth:

  • First-party data analysis in persistently updated customer profiles
  • Real-time activation in the form of one-to-one lifecycle orchestration
  • Advanced artificial intelligence and machine learning functionality
  • Dynamic, multi-dimensional segmentation and segment analysis

In short, with our CDP, you don’t just get a centralized, single source of truth in which you can unify first-party data (and prevent headaches caused by siloed data).

You also get a solution that can take your transformation efforts to new heights and help you better compete in the increasingly and disruptive business landscape in 2021 and beyond.

Request a demo of BlueConic today to discover why so many leading companies invest in our solution to drive their digital transformation strategies.

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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.