"Focus" on process digitization

For your customers, they all want your company to be an easy company to deal with. When you're implementing a digital project to create a company that's easy to deal with, success begins with recognizing that the focus isn't on technology, but understanding what your customers care about most, and adjusting your internal workflows accordingly. So, the key question is: what kind of new services need to be designed to be an easy company to deal with? Which channels must be coordinated (physical, web, telephony and mobile)?

And the company's internal management staff will put forward such a request: We want to reduce customer service costs, improve the efficiency of call center staff, and improve customer loyalty. So, the key question is: how to segment customers? What kind of applications are required for internal integration?

These questions above illustrate two perspectives on the digitization process, which are diametrically opposed in the real world:

Customer-centric: Workflows are designed from the outside in to understand The real needs of customers are the starting point.

●Process-centric: Design the integration of applications from the inside out to support the workflow, starting from what managers know about customer needs.

Designing from the customer's perspective is something that many customer-facing departments (eg, strategy and marketing) strive for. The integration process is something that most internal departments, such as operations and human resources, are striving for.

Focus on one point, unify the two centers

Both viewpoints have their necessity, but the applications and infrastructures that underpin them are often different, so problems arise.

Imagine if there are 20 different customer-facing projects, each with its own unique integration model. The business consequences are that the top concerns of the business and customers are constantly changing, and as the company struggles to keep up with this change, the foundations of business workflows (applications, infrastructure, and people) can have serious structural problems .

One way to avoid the conflict between an inside-out approach and an outside-in approach is to have a very clear focus and work around it. For example, Wal-Mart has successfully pursued its "everyday low price" focus for years, while its competitors -- Kmart, Ames and other discount retailers -- have stagnated. Because Wal-Mart can focus on effectively improving its supply chain and logistics, it can lower prices and outperform its competitors. All of Walmart's investments revolve around a focus to create value, an ability that differentiates it from its competitors in the long run.

Business and IT departments are often concerned with workflow, while service departments represent the top concerns of customers and businesses, reflecting the state of the art. A lack of coordination among the three will lead to problems. Operationally, setting up new service offerings requires looking at the interaction between customers and service offerings from the outside in, and looking at the company's existing capabilities and applications from the inside out.

Clarify your focus

The most advanced business technologies are concentrated in digital services. Studies have shown that, on average, only 20%-30% of key business processes have been fully and effectively digitized.

Digitizing a process is like a marathon and requires a lot of patience. The most challenging question facing business leaders and managers is not "what processes need to be digitized" or "how do we digitize", but "what focus should we focus on to digitize processes".

What is the focus of your digital investments? This focus determines your business. Market leaders have a very clear focus to guide digital efforts. For example:

●Easy to deal with business: Why has Staples, an office supply supermarket, been able to successfully implement an "Easy to deal" strategy while others have not? Staples designed a technology-based service blueprint that can effectively implement an integrated multi-channel strategy. Its office supply stores, e-commerce, mail-order sales and contract-to-order businesses are integrated.

●Low cost: Why is Dell successfully implementing its build-to-order, customer self-service strategy while computer companies such as Compaq have stagnated? Dell is continually improving its operational blueprint, allowing the company to digitize its low-cost supply chain and lower prices.

●Zero Quality Defects: Why Toyota can successfully expand its market share in a sluggish market? What matters most to customers is changing, how can it adapt the production process to this change? Toyota digitized the design process, allowing it to go from design to production, bringing new models to market in less than a year (its competitors take three years to complete the same process).

The key success factor in each example is a focus on digitization. Everything Staples does—with customers, with employees, with suppliers—must support the company's focus: being a business that is easy to deal with. Unfortunately, few companies have such clear direction in their digital journey.

Having a clear focus is what differentiates the market leader from the rest of the competition. These companies consistently execute focused business strategies with technology as an enabler. These companies excel not only because of their ability to grasp the vision and see changes in customer preferences, but also because they use technology to create customer value every day.

No Execution Can Do

Why can't competitors imitate market leaders? The answer is too simple. Competitors do not treat technological innovation systematically. They do a good job of discovering and evaluating new ideas, but they lack the right people and skills to execute them. Although a new idea may yield results quickly, the manager in charge of execution is often too busy with the pressing task at hand to implement it effectively. Success largely depends on execution.

Does your company have a core strategy that guides the company's service blueprint and is carried through to execution?

What is Dell Computer's Service Blueprint? Articles have been written about Dell's direct selling business model. Many consulting firms have analyzed this business model for their clients. However, none of the competitors can effectively replicate it. Therefore, the core strategy is a necessary but not sufficient condition. Stable execution of core strategies over a long period of time is critical to success.

Execution is the science of turning multi-million dollar investments in applications and infrastructure into results. It turned out to be much harder than imagined. Billions of dollars are spent on software application projects every year. Only 17% of these projects were completed on time, on budget, and with the required performance. As many as 50% of projects fall short of goals - delays, cost overruns, performance and functionality are not up to scratch. Even more shocking is the remaining, a whopping 33% of the projects cancelled. That means billions of dollars are wasted every year because of poor implementation.

Looking at it another way, the data above shows that 83% of all technology projects run into trouble. What keeps a business from executing better? The problem has grown worse, and poor execution can no longer be glossed over.

What separates the hard worker from the talker? A notable difference between the two is that market leaders are able to digitize complex business processes, such as supply chains or employee self-service. Determining what business processes are to be digitized is based on the company's core strategy.

Market leaders never stray too far from their core strategies, such as low cost or zero defect quality, which are often the guiding principles of execution. These core strategies are different from a typical brand statement or vision statement; they drive companies to transform mundane products, processes and services into solutions or value-added experiences that people demand.

The key to a clear core strategy is understanding what customers want. Even the best company can run into trouble if it executes its core strategy without considering what customers are most concerned about right now. The obvious consequence is that the company's revenue, profits and market value continue to decline.

As businesses restructure for the future, effectively digitizing workflows to reduce costs and remain competitive is a top priority. Leading the pack include Siemens, Nike, Kraft Foods, Nestlé and 3M, and in this battle they appear to have new rules of battle. These companies know they have to constantly improve their work processes, and the best way to improve them is to digitize their ever-expanding work processes and incorporate them into the company's service offerings to ensure that the business can survive and stay ahead of the competition. Considerable lead.

Choose a strategic blueprint

As mentioned earlier, the digitization of services depends on a clear core strategy and flawless execution. According to the level and scope of influence on the enterprise, the strategic blueprint of today's enterprise can be divided into three categories: process improvement, strategic improvement and business transformation.

Process Improvement If a company is in a mature market and faces relatively low levels of uncertainty, its blueprint can be classified as process improvement. Most of these companies want to achieve further development. When improving their processes, companies must persistently focus on traditional metrics such as capacity utilization or yield, as well as on fundamentals such as operational efficiency through improved administrative quality. This is a robust approach. Some companies, such as Siemens and Alcoa, have been systematically improving their processes, steadily reducing costs and increasing productivity.

Strategic Improvements When companies seek to grow in new areas by introducing new products and services, or optimize their entire processes by strengthening ties with customers and suppliers, companies need strategic improvements. When making strategic improvements, companies typically focus on increasing customer service and developing new business opportunities. Companies like Tesco and Intel have long been engaged in strategic improvements and have been able to dominate the competition.

Business Transformation The digital process associated with business transformation is high risk. In executing such blueprints, companies (such as Amazon or Yahoo) change the game in an industry through so-called "disruptive innovations" that create new customer segments, channels or cost structures. In the absence of adequate information, transformation strategies pave the way for the future.

A transformation strategy may be appropriate for some emerging businesses. For large enterprises, it is very risky and has a high probability of failure.

You might be tempted to say "I want all of these" -- process improvements, strategic improvements, and business transformation. Wait a minute! Executing each strategy requires distinct skills. A crucial first step is to understand which strategic blueprint is the main driver in your digital efforts. The company's technical foundation is good or bad, all in this critical first step.

Originally adapted from Services Blueprint: Roadmap for Execution by Ravi Kalakota and Marcia Robinson with permission from Pearson Education, Inc. The author registered copyright in 2003. Translated by Gong Hao.