6 Stages of Digital Transformation: From “Converged” to “Innovative and Adaptive”

Wel­come to the fourth and final instal­ment of our series on the six stages of dig­i­tal transformation.

In this arti­cle, we’ll round out our exam­i­na­tion of the six dis­tinct steps from “Busi­ness as Usu­al” to dig­i­tal­ly “Inno­v­a­tive and Adap­tive,” as described in the 2016 Altime­ter Study “The Six Stages of Dig­i­tal Trans­for­ma­tion.”

To sum up where we’ve been so far, we start­ed by exam­in­ing the tran­si­tion from “Busi­ness as Usu­al” to “Present and Active,” in which iso­lat­ed teams begin to con­duct dig­i­tal exper­i­ments that chal­lenge tra­di­tion­al par­a­digms. Then we explored the “For­malised” stage, where exper­i­men­ta­tion becomes more delib­er­ate and inte­grat­ed. In the third arti­cle, we delved into the “Strate­gic” stage, in which dig­i­tal teams begin to col­lab­o­rate and share data, cre­at­ing a con­sis­tent roadmap for ongo­ing transformation.

For most com­pa­nies, the “Strate­gic” stage rep­re­sents the cut­ting edge of dig­i­tal trans­for­ma­tion. How­ev­er, a few for­ward-look­ing com­pa­nies are already going fur­ther, devel­op­ing ded­i­cat­ed dig­i­tal trans­for­ma­tion teams to guide strat­e­gy and oper­a­tions on a com­pa­ny-wide scale, build­ing an entire­ly new, adap­tive, cus­tomer-cen­tric infra­struc­ture. This is the “Con­verged” stage, and the organ­i­sa­tions that inhab­it it stand at the fore­front of dig­i­tal-first prac­tice.****

Pre­dic­tive analytics
Once cus­tomer-fac­ing teams have grown accus­tomed to work­ing with­in an inte­grat­ed mar­ket­ing plat­form, some may begin to recog­nise that future oppor­tu­ni­ties can be anticipated—and threats avoided—by spot­ting pat­terns in his­tor­i­cal and trans­ac­tion­al data. By lever­ag­ing cus­tomer pro­files, attri­bu­tion stud­ies, and oth­er data­bas­es to iden­ti­fy upcom­ing risks and anom­alies, as well as their con­tribut­ing fac­tors, a com­pa­ny could all but elim­i­nate guess­work, and proac­tive­ly exploit oppor­tu­ni­ties and mit­i­gate risks.

For exam­ple, pub­lish­er Condé Nast owns a port­fo­lio of lux­u­ry mag­a­zines, boast­ing more than 65 mil­lion loy­al sub­scribers world­wide. The com­pa­ny has a long his­to­ry of user sur­veys, audi­ence seg­men­ta­tion, and data-dri­ven con­tent cre­ation, but until recent­ly, this had all been respon­sive, rather than pre­dic­tive. The company’s mar­keters began to won­der if they might lever­age this wealth of data to proac­tive­ly improve edi­to­r­i­al and adver­tis­ing con­tent in antic­i­pa­tion of trends, to iden­ti­fy and build new high-val­ue audi­ences, and to align adver­tis­ing and edi­to­r­i­al goals to boost revenue.

Condé Nast lever­aged an inte­grat­ed mar­ket­ing plat­form to gen­er­ate dig­i­tal mar­ket­ing reports and ad hoc ana­lyt­ics, per­form looka­like mod­el­ing to dis­cov­er new audi­ence seg­ments, A/B test fresh con­tent, and serve tai­lored social posts and cross-pro­mo­tion­al incen­tives to each cus­tomer seg­ment. This pre­dic­tive con­tent adap­ta­tion result­ed in a 40 per­cent traf­fic boost, an increase in sub­scrip­tions via tar­get­ed cross-pro­mo­tions, a seam­less inte­gra­tion of offline audi­ence pro­files with online behav­ioral data—providing more pre­cise tar­get­ing for advertisements—and a pre­dic­tive ana­lyt­ics sys­tem that fore­casts rev­enue and auto­mat­i­cal­ly devel­ops bud­gets in advance.

The most ratio­nal next step, at this point, is to bring pre­dic­tive ana­lyt­ics togeth­er with cus­tomer jour­ney data to devel­op cen­tralised man­age­ment of the entire jour­ney from dis­cov­ery to purchase.

Jour­ney management
Any com­pa­ny that’s begun its process dig­i­tal trans­for­ma­tion has already invest­ed in stream­lin­ing the cus­tomer jour­ney. In the ear­ly stages of trans­for­ma­tion, though, these stream­lin­ing efforts are often siloed by brand—perhaps even by prod­uct or cus­tomer seg­ment. Thus, the real chal­lenge is to cre­ate engag­ing cus­tomer expe­ri­ences through­out the entire cus­tomer jour­ney, all of which con­tribute to increased rev­enue and loy­al­ty, while improv­ing oper­a­tional mar­ket­ing effi­cien­cy. Coor­di­nat­ing many cus­tomer jour­neys quick­ly becomes cost­ly and com­pli­cat­ed, cre­at­ing the need for cen­tralised solu­tions that deliv­er engag­ing dig­i­tal assets at the right time, in the right place—and track the impact of each asset, on each chan­nel, at each stage of the journey.

US media com­pa­ny Time Warn­er Cable recent­ly realised the need to lever­age first‑, second‑, and third-par­ty data to opti­mise con­tent and cam­paigns across dig­i­tal prop­er­ties. With 14.5 mil­lion cus­tomers mak­ing more than 17 mil­lion month­ly vis­its to each of the company’s web­sites, the tasks of seg­ment­ing and under­stand­ing the cus­tomer base—and serv­ing per­son­alised omnichan­nel con­tent to each customer—had become chal­lenges of unusu­al scale and complexity.

The com­pa­ny had been rely­ing on dig­i­tal mar­ket­ing tech­nolo­gies for some time, but many of those tools and data were siloed and dis­parate, and had already become out­dat­ed. Time Warn­er replaced those old dig­i­tal tools with an exten­si­ble, end-to-end dig­i­tal mar­ket­ing plat­form, and pop­u­lat­ed it with robust cus­tomer pro­files com­posed of first‑, second‑, and third-par­ty data. Time Warn­er then inte­grat­ed this cus­tomer data with down­stream sys­tems, includ­ing dis­play media tech­nol­o­gy, to per­son­alise dis­play media con­tent. Final­ly, the com­pa­ny cre­at­ed an iter­a­tive test­ing and opti­mi­sa­tion strat­e­gy that enabled them to tar­get per­son­alised con­tent to each customer.

As a result, new cus­tomer con­ver­sions increased by 49 per­cent. Mean­while, Time Warner’s exist­ing cus­tomer con­ver­sion rate for new prod­ucts saw a 9 per­cent lift, while cus­tomer sat­is­fac­tion scores rose dra­mat­i­cal­ly. With its new inte­grat­ed sys­tem incor­po­rat­ing more than 100 first-par­ty cus­tomer rela­tion­ship man­age­ment (CRM) data ele­ments, Time Warn­er is well-equipped to deliv­er rel­e­vant, per­son­alised con­tent and mes­sag­ing through­out each customer’s unique journey.

Along with the desire to cre­ate con­sis­tent cus­tomer jour­neys comes the dri­ve to deliv­er con­nect­ed omnichan­nel expe­ri­ences. That’s the final com­po­nent of the “Con­verged” stage.

Con­nect­ed experience
Through­out the dig­i­tal trans­for­ma­tion process, many com­pa­nies move from a mul­ti­chan­nel per­spec­tive, in which they strive to deliv­er con­sis­tent expe­ri­ences across all devices, to an omnichan­nel approach, in which the cus­tomer expe­ri­ence on each device is lever­aged to adap­tive­ly sup­port con­tent on oth­er devices, pro­vid­ing a sin­gle seam­less, har­mon­ic expe­ri­ence as the cus­tomer moves from one touch­point to another.

Many dig­i­tal mar­ket­ing experts report that they’re still “fly­ing blind” when it comes to true omnichan­nel opti­mi­sa­tion. The con­cept itself is so new, and requires com­plex data analy­sis and behav­iour­al mod­el­ing, to the point where few com­pa­nies even pos­sess the infra­struc­ture or exper­tise to sup­port it. This means there’s a clear need for deep­er knowl­edge of cus­tomer inter­ac­tions on var­i­ous devices, and a foun­da­tion to sup­port con­nect­ed expe­ri­ences across all touchpoints.

Although the chal­lenge is intim­i­dat­ing, the rewards are clear: a dra­mat­i­cal­ly increased con­ver­sion rate, dri­ven by a uni­fied cus­tomer expe­ri­ence that spans the online and offline worlds.

Dutch tech­nol­o­gy com­pa­ny Philips is one of the few busi­ness­es that’s tak­en a seri­ous stab at this lev­el of under­stand­ing and inte­gra­tion. The company’s web pres­ence dates back near­ly to the dawn of the Inter­net; its cur­rent web­site con­sists of more than 1 mil­lion pages in 38 lan­guages, rack­ing up more than 1.1 bil­lion annu­al pageviews world­wide. Many of these pages change reg­u­lar­ly, due to author edits or auto­mat­ed site-wide updates. And every one of them needs to sup­port a sin­gle, con­sis­tent cus­tomer expe­ri­ence across desk­top, mobile, and tablet, in the midst of a near-infi­nite vari­ety of non­lin­ear cross-chan­nel cus­tomer journeys.

Philips’ lead­er­ship knew the only solu­tion was a top-down reor­gan­i­sa­tion of the company’s dig­i­tal con­tent strat­e­gy. They organ­ised all prod­uct-relat­ed teams through­out the company—including deploy­ment experts, data ana­lysts, project man­agers, and prod­uct owners—into a sin­gle hier­ar­chy, super­vised by busi­ness-to-busi­ness, busi­ness-to-cus­tomer, and cor­po­rate lead­er­ship teams. They moved all these teams onto a uni­fied dig­i­tal man­age­ment plat­form, in which unsiloed data can be used to pro­vide opti­mised expe­ri­ences at every stage of the cus­tomer jour­ney, from a vast library of gener­ic and spe­cialised assets.

This com­bi­na­tion of col­lab­o­ra­tion, con­tin­u­ous flow, lean user expe­ri­ence, and easy inte­gra­tion has enabled Philips’ teams to imple­ment an entire­ly nov­el approach to the cus­tomer jour­ney, in which “micro­mo­ments” on any giv­en chan­nel are imme­di­ate­ly sup­port­ed and stream­lined by con­tent on every oth­er touch­point. Cus­tomer sat­is­fac­tion is already ris­ing rapid­ly, in many cas­es break­ing out from mere “sat­is­fac­tion” into “delight.”

But the full impact of this com­pa­ny-wide dig­i­tal trans­for­ma­tion may not be felt for some time. It seems poised not only to trans­form how Philips inter­acts with its cus­tomers, but also to set an entire­ly new exam­ple. It reach­es beyond mar­ket­ing, adver­tis­ing, or sup­port; it encom­pass­es all these areas, inte­grates them, and improves upon them, dri­ving strong cus­tomer engage­ment and rev­enue through­out the entire organisation.

The final stage of dig­i­tal trans­for­ma­tion is the “Inno­v­a­tive and Adap­tive” stage. Com­pa­nies who reach this stage, Altimeter’s report pre­dicts, will accept rapid, ongo­ing dig­i­tal change as a giv­en. They’ll devel­op their ecosys­tem with the goals of iden­ti­fy­ing and act­ing upon new devel­op­ments in tech­nol­o­gy, as well as pre­dict­ed mar­ket trends, and mov­ing new strate­gies from test phase to pilot to full-scale in ever-short­en­ing time.

Thanks for join­ing me on this jour­ney from old par­a­digms to new inno­va­tions. If you’re won­der­ing where your busi­ness is in its own process of dig­i­tal transformation—and how to move to the next one, and the next—we at Adobe are here to help.