TOP MISTAKES TO AVOID IN B2B DIGITAL TRANSFORMATION
Companies that leverage digital technologies and data to create value for their customers create value for themselves. However, CEOs report that many of their digital transformation efforts fail. Of the 1,350 senior industrial executives Accenture interviewed for its 2019 digital transformation study, 78 percent failed to exceed their return on digital investment goals.[1] They make mistakes that could be avoided by examining the cases of B2B companies who have successfully undertaken digital transformation.
Mistake 1. Inside - Out Approach
The most common question we hear from executives feeling the pressure to go digital is “Where do I start?” The answer - “Where it makes the most sense from a customer point of view.” In the first wave of digital customer engagement in B2B, which is only now coming to an end, companies invested millions in websites, customer portals, social marketing, and other vehicles without clear customer objectives and, all too often, with little evidence to justify the investment.
Mistake 2. Technology Not Customer - Driven
Many company leaders were seduced by suppliers’ promises of easy benefits (including revenue and margin growth) that were simply not achievable with the customer-centric tools, methods, and metrics at hand. Few of these initiatives were integrated into core revenue- and margin-building parts of the business. Granted, a certain amount of digital foundation building was needed. However, CEOs consistently report their dissatisfaction with the return on these investments.[2]
Mistake 3. Confuse Fads for Needs
B2B leaders must build the momentum and capabilities needed to transform their companies into agile, customer-centric digital organizations. They must use digital technology to address customer needs and enable the organization to deliver the transformation this entails. Their efforts must withstand the rapid pace of digital advancements. Understanding individual technologies such as the latest social media tools, artificial intelligence (AI) developments, and Internet of Things (IoT) applications is important. But these technologies evolve quickly, and their relevance varies from industry to industry. B2B leaders need to be armed with the principles to take a technology-agnostic approach to tackling digital transformation. Emerging technologies and new applications are merely tools; although technical learning is needed to use new tools, successful outcomes result from leveraging the entire toolbox intelligently based on customers’ needs and your organization’s digital capabilities. The ability to leverage more and more of the toolbox comes from building momentum: as the organization moves through phases of implementation, it progressively builds organizational capabilities, as employees learn more and more about what customers value most.
Mistake 4. Fail to Focus on People
The evidence is already in: customers and employees are the key to successful digital transformation.[5] They deserve the attention that most managers instead devote to technology selection. Digital transformations succeed by putting people first—and last. Every transformation project must begin by understanding customers’ needs, and no transformation project can be completed until the challenges of employee learning, development, and motivation as well as talent management, governance, and measurement are addressed.
When seen through the lens of customers and employees digital transformation is clearly a continuous, multistep process. Success lies in achieving ever-increasing levels of customer-centricity, in which employees learn from customers every step of the way, and customers recognize that their supplier is increasingly attentive to their needs.
[1] David Abood et al., Rethink, Reinvent, Realize: How to Successfully Scale Innovation to Drive Growth, Accenture Research, 2019, https://www.accenture.com/_acnmedia/thought-leadership-assets/pdf/accenture-ixo-hannovermesse-report.pdf.
[2] Steven ZoBell, “Why Digital Transformations Fail: Closing the $900 Billion Hole in Enterprise Strategy,” Forbes Technology Council, Forbes Blog, March 13, 2018, https://www.forbes.com/sites/forbestechcouncil/2018/03/13/why-digital-transformations-fail-closing-the-900-billion-hole-in-enterprise-strategy/#793c1da67b8b.
[3] Saul Berman, Josh Goff, and Carolyn Heller Baird, The Experience Revolution: Digital Disappointment—Why Some Customers Aren’t Fans, IBM Institute for Business Value, IBM Digital Strategy and iX, 2017, https://www.ibm.com/downloads/cas/Q1K5AKNQ.
[4] Kestutis Reklaitis and Lina Pileliene, “Principle Differences between B2B and B2C Marketing Communication Processes,” Management of Organizations: Systematic Research 81, no. 1 (October 30, 2019): 73–86; Severina Iankova et al., “A Comparison of Social Media Marketing between B2B, B2C and Mixed Business Models,” Industrial Marketing Management 81 (August 2019):169–179.
[5] Thomas Abrell et al., “The Role of Users and Customers in Digital Innovation: Insights from B2B Manufacturing Firms,” Information & Management 53, no. 3 (April 2016): 324–335; Michael Brown, “How Boosting People Skills Helps in Digital Transformation: A Case Study,” Strategic HR Review 18, no. 6 (November 11, 2019): 254–257.