The CMO's role in digital business transformation

Business leaders from all types of organisations are re-imagining, reshaping and retooling for an imminent digital future. It’s a future many leaders would argue has been upon us for some time. But that’s an unhelpful correction for business leaders who are in the midst of catching up.

This significant, boardroom-level organisational change is referred to as 'digital business transformation'. It’s transforming our industry and affecting CMO and CIO budgets across the region.

For MNCs, digital business transformation is likely on the C-suite’s internal agenda. For agencies, the transformation is changing our clients, our budgets and the industry. Here are three questions I commonly answer from clients seeking guidance in this area.

Q. What is driving the need for digital business transformation?

A. Consumers. The rapid uptake and use of technology by consumers means many companies are finding a lag between the expectations of customers and what their organisation is capable of delivering.

While many businesses have starved the wolves of change by digitising parts of the business, there is an imminent commercial imperative to make more thorough changes. This commercial imperative compels business leaders to radically rethink the ways in which their entire organisation will meet the expectations of digitally reliant consumers.

Q. We have digitised some of our processes in the marketing division, isn’t that enough for now?

A. While marketing can be leaders in this area, digitising existing processes is a quick fix. It isn’t enough to meet current consumer expectations, let alone those forecast for the immediate future.

For example, those in automotive know the modern car buyer is focused more on the digital services that a car and its network environment may offer than what is under the hood. The expectations on the products and services offered in automotive are now entirely different.

Digital business transformation is about challenging and changing ingrained perceptions about what a company is, does and says in order to increase relevance to customers.

Q. What role can the CMO take in this change?

A. CMOs can take a leadership role in the change by initiating the discussion. CMOs are likely spending heavily on tech. If the marketing department has created ‘pockets’ of digital transformation, they will ultimately need to be connected with the rest of the business if they are to have genuine, sustainable impact on business performance.

Research driven by the Publicis.Sapient group out of Europe shows that only about 25 percent of CEOs will entrust their CMO with the significant task of digital business transformation. CMOs who begin the discussion are forward-thinkers and true business leaders.

Q. What’s the risk of taking a ‘wait-and-see’ approach?

A. Inarguably, the single biggest lever of change for business is technology. Technology is the future—it’s your silver bullet. Those businesses that aren’t diving in are being left behind.

Large organisations urgently need to begin a board-level discussion to create a digital business transformation strategy and intent. The effectiveness of such strategies will become a key underlying survival and success factor for large organisations to 2020 and beyond.

Such transformations are essential if businesses are to deliver customer-centricity. The impact of new digitally empowered players is creating new expectations of service and experience across every category.

Q. How is this relevant to APAC? Mine is a distinct market. What’s happening in the West isn’t always relevant to my customers.

A. I can’t agree more. Remember, consumers are driving the need for these changes. The rapid uptake and use of technology by consumers means many companies are finding a lag between the expectations of customers and what their organisation is capable of delivering.  

More than ever, this lag between consumers and brands is biggest in APAC markets. Research by Razorfish shows us Asian consumers are tenacious about technology, more so than in the West. We only need to look at the rise of social commerce, the swift uptake in mobile payments and the evolved retail environment of China to see how consumer behaviour, and in turn expectation, in our region is outpacing the changes made by brands.

Consider this: In my experience, the average MNC in APAC takes from 12 to 18 months to initiate and award an RFP for a content platform. By comparison, a startup is on its second or third phase of maturity by that time. Put that into perspective from the consumers’ point of view, and it’s clear to see why some heritage businesses are failing. Established companies that are succeeding have readjusted their governance models to meet the expectations of today’s customers.

Q. What do I need to do?

Decide what your business should look like and start building from the inside.

By that I mean:

1. Create the future: Focus on identifying what your business needs to look like/needs to do to meet consumer expectations. Do not get stuck on the restrictions of your current model. Find the services you can provide that aren’t yet there. Here’s an example of potential evolution in the traditional insurance sector:

A customer decides to go skiing in Japan. Before he leaves for his three-day weekend, he logs on to transfer some of his home insurance investment to travel insurance. Once his trip is over, he moves it back on Monday before starting work. 

This new model meets the untapped need of an audience. It is service- and design-led thinking. I challenge our clients to focus on the audience or customers they don’t have, in moments they don’t yet know, through channels they don’t have; with products and services they haven’t yet designed.

2. Build an in-house team: Work with partners to bring experts in-house. Establish a team of change-agents, a transformational unit that can drive change internally. These experts will provide a focus on experience design and technology. You simply can’t expect an external agency to do this and be judged by those sitting in the old model. Find a trusted partner who becomes an extension of your team. 

Kim Douglas is vice president and APAC managing director of SapientNitro and Razorfish