Value is a complex metric. It’s fiscal – a return on the investment (ROI) made into a service, product or platform. It’s optimal and operational – a measurable shift in how the organisation does business. It’s functional – a tangible benefit that’s felt in customer engagement, sales, growth and innovation. According to McKinsey, however, the impact felt by most organisations when they invest into digital transformation is less than a third of what they expected. Why? Because digital transformation is a mind shift and a strategy.
The Role of Digital Tech in Achieving Strategic Differentiation
As McKinsey points out, it’s the use of “digital tech to achieve strategic differentiation” that drives customer engagement and innovation. It’s about being bold, being engaged with talent, and about having a strategy and mindset that are fully engaged with digital transformation across the board. Those companies that achieve economic returns on their digital investments are those that invest significantly into their initiatives and take large strides in clearly defined directions.
Whether investing into marketing or into digital or into the business as a whole, it is proven that companies that continue to put money back into the company and its infrastructure are those that show greater returns over both the short and long term. The key is in how they put that money back into the business, and how they strategically evolve their digital transformation investments. Perhaps one of the most famous stories of success in a recession lies in that of Netflix – a company that was on the edge of failing until it shifted its strategy and leveraged digital to become a global leader in entertainment. Digital transformation needs to be focused and highly relevant to deliver value.
The Need for Focused and Relevant Digital Transformation
Digital transformation needs to be focused and highly relevant to deliver value, and it must become even more so in complex times to ensure that the value is consistent and the business sustainable. To thrive and survive, companies need to be capable of meeting customer expectations and market demands, particularly in the insurance industry. This is one sector that is experiencing significant disruption as fresh innovators dig into the market and bring new ideas to customers hungry for fast and engaging solutions over lumbering incumbents, which means those left behind may very well stay behind.
Digital Transformation as a Pivotal Bridge
The problem is that many companies in this sector still perceive digital transformation as something that’s less of a necessity and more of a luxury. This is unfortunate because, as Deloitte points out, digital transformation can be a “pivotal bridge between your organisation’s success today and its sustained success in the future”. It should be about finding better ways to service the customer and to give the business the agility it needs to play into its capital better, to innovate within the market faster, and to mitigate risk more effectively.
Frictionless experiences
This means investing into best-of-breed solutions and capabilities that allow for you to improve fundamental processes within the business – to bypass sticky points that traditionally cause friction. These sticky points are usually around common compliance and paperwork-driven processes such as know your customer (KYC) processes or payment management or claims. Digital innovators are making these bottlenecks into frictionless experiences which are attracting new customers in their droves. After all, instead of waiting months or weeks for insight from your insurer after hours or days of admin and form-filling, you can tap three buttons and get a reply in days.
You want your customer stickiness to be their loyalty and engagement thanks to your frictionless processes and intelligent systems.
This is the other side of the value coin where you provide value to your customers by providing them with a service that assures them of consistent service and financial stability. They feel secure, safe, represented. They have digital tools at their fingertips that allow them to feel more in control, and that make your business a more attractive proposition. People are tired of manual paperwork, human error and long wait times, and they’ve voting with their “delete” button.
Conclusion
Digital transformation is a costly investment that requires ongoing iterations to fully evolve a business. However, it can deliver value defined by a company’s strategic vision and a clearly defined change management program. To learn more, contact us at hello@greenraven.co.za, or connect on LinkedIn.
