Setback through digitization?

There’s no getting around digital transformation. Companies are asking not whether they want to embark on technology-driven change but how they are to implement it in their own organization. Owing to their desire for growth and market dominance or simply due to the sheer pressure to remain competitive, large-scale transformation initiatives are being launched everywhere. These relate to digitization of the company’s offering, modernization of the value chain, and even rethinking of the entire business model of the enterprise. However, digital transformation does not always guarantee business success, as our experience in diverse consulting projects shows.

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Faster, further, more digital

The goals that companies are setting for themselves are ambitious. For example, the degree of digitization in Switzerland is to be increased by 50% by 2021. Nevertheless, recent studies show that companies struggle with change processes and actually achieve their goals only in rare cases. A mere 16% of companies pursuing digital transformation projects report that they have been able to improve their performance through these projects. In more traditional industries which are not that digitally savvy, the rate of success is between 4% and 11%. In view of the immense investment costs for such projects, such a high failure quota is particularly painful.

Stumbling blocks of digital transformation in marketing and sales

Digital transformation of marketing and sales poses particular challenges to companies due to their overlap with other organizational units and their focus on the customer. We see in our consulting projects that B2B companies often encounter the following stumbling blocks:

  • A crumbling foundation: Transformation projects often not only involve the transfer of existing processes and workflows into the digital world but also initially require fundamental development work. It is not uncommon for tasks and responsibilities in sales to suffer from a lack of the formal definitions required for system-side mapping. The clear delineation of sales processes and the validation of their connectivity to other business processes require a great deal of time and effort as well as an understanding of the big picture.
  • Loss through simplification: In order to make it possible to use common systems, such as those for customer relationship management (CRM), companies adapt themselves to the system specifications instead of tailoring them to their specific needs. Effective digitization requires a certain degree of standardization. However, companies lose valuable customer knowledge if relevant information from customer plans cannot be mapped in the predefined data fields of the new CRM system. In order not to endanger competitive advantages built up over the years, proven problem-solving methods and tools should not be replaced prematurely.
  • The power of data: It is not enough to collect massive volumes of data, store it in data funnels and lakes or the like, and rely on intelligent systems to tell you what to do. The real challenge is to connect individual data points in a meaningful way and derive relevant statements for managing customers. It is frequently the case that the most valuable starting points for managing customers are found in the minds of employees who are involved with customers on a daily basis. The sales staff must be able to link and interpret the information available in a meaningful way so that it leads to real added value for the customer.
  • Setting off into the unknown: In initiatives of digital transformation, it is even more difficult for companies to set the path to be taken and define clear results in advance than is the case with other change projects. This uncertainty can cause companies to fall back into herd instincts and neglect to consider what approaches for managing their customers make sense. A distinction must be made between which investments are necessary to keep up with market standards and which allow your enterprise to differentiate itself from the competition.
  • The scope of the change: Digital transformation is a process that fundamentally changes the way companies do business. These changes go beyond individual areas and require integrated systems as well as clearly defined processes and interfaces and place high demands on employees. For promoting change in the company as a whole, the importance of active change management (especially on the C level) should not be underestimated.

 

Sources:
Weibel, M. & Lindenau, A. (2017). Digitalisierung im Business-to-Business-Marketing und Vertrieb erfolgreich realisieren. Marketing Review St. Gallen.
Belz et al. (2018). Veränderte Kaufprozesse im Business-to-Business Marketing gestalten. St. Gallen: Thexis.
De la Boutetière, H., Montagner, A. & Reich, A. (2018, Oct.). Unlocking success in digital transformations. McKinsey & Company.
Davenport, T. H. & Westerman, G. (2018, March 09). Why So Many High-Profile Digital Transformations Fail. Harvard Business Review.
Switzerland Global Enterprise (2016). Opportunities for the Swiss Export Industry: INDUSTRY 4.0. Whitepaper.