The road to digital transformation can be one fraught with many challenges for some of the world’s largest marketers. As the customer journey evolves to include more digital touch points and expectations for a seamless consumer experience become more demanding, large companies across all sectors in established markets find themselves afflicted with the “legacy disease.” In legacy organizations, often times both internal systems and external practices are antiquated and companies find transformation to be extremely slow-paced. Battling the legacy disease, coupled with threats from “digital disruptors,” can present an array of challenges for both CMOs and their marketing teams. However, there are several things CMOs can do to jumpstart digital transformation, including properly leveraging resources, redefining integration, and hiring the right talent.
Gone are the days when pharmaceutical companies would compete with other pharmaceutical companies, banks would complete with banks, and so on. In today’s “new normal,” companies are competing against a whole digital ecosystem.
For example, over the last five years, financial firms have been competing with tech firms that develop mobile payment solutions, P2P lending platforms, blockchain and other systems that all but eliminate consumers’ need to use a traditional bank. For a global bank, internal IT systems alone can take years to update across all regions and rolling out an app or adopting technology for consumer use can take even longer.
To counteract this, many organizations in heavily disrupted sectors are making serious investments in updating legacy systems. For example, Southwest Airlines recently invested $800 million in new technology for operations and a new reservation system.
It is important to note that digital doesn’t just mean e-commerce. Companies need to leverage storytelling across an ever-increasing number of digital platforms to ensure consumers connect with their brand. For many large FMCGs, it is a struggle of scale vs. personalization and how to properly leverage their massive swathes of data. As the customer journey becomes more and more fragmented, most marketers agree that companies need to use their data to tie channels together, making for one seamless consumer journey across all touch points.
For digital disruptors, the issues of scale and entrenched IT systems don’t exist. They are much faster to adopt new technologies, allowing them to leapfrog and advance more quickly. As a result, a lot of established companies are losing market share (particularly in emerging markets) to smaller, more agile firms that are able to move at the speed of digital. So what can legacy organizations do to jumpstart digital transformation and avoid becoming obsolete?
Leverage Internal and External Resources
When it comes to transformation, the CMO needs to act as a catalyst to mobilize the entire organization to move towards digital. Since digital disruption is difficult to define from one company and sector to another, there is a real need to seek out external and internal advice to drive learning across the organization. Continuous education on market developments and best practice and learning from legacy organizations that are doing it right (i.e., GE and IBM) are key to ensuring success. Digital transformation is an ongoing process that takes time, training, and effort – it’s not going to happen overnight.
With everything around us in a constant state of flux, from what type of data is available to the latest touch point in the consumer journey, it is crucial that marketers expand their definition of integration to encompass stakeholder needs, customer experience, and market intelligence. If marketers maintain a legacy mindset when it comes to integration, they won’t be able to compete with the companies that are constantly evolving their models. It is easy for organizations to become complacent and fall into the classic silos. For real transformation, there has to be cross-team collaboration to drive forward-thinking ideas.
Hilton Hotels & Resorts is an example of a brand that leveraged tools across silos – like analytics, the IoT, mobile tech, and digital marketing – to dramatically improve the consumer hotel booking experience. The result has been a 100% increase in mobile app enrollment over 2015, with one download every seven seconds.
Hire the Right Talent
Perhaps the most important thing for CMOs to consider when looking to jumpstart digital transformation is who to hire to get the job done. The marketing and advertising ecosystem is fragmented; no one can be an expert in everything. However, it is crucial that CMOs educate themselves to be able to ask the right questions and identify the right talent who can help an organization move towards the future. CMOs today are never going to be as tech-savvy as the digital natives currently entering the job market, but they need to implement strategies that help them keep the pace of digital transformation within their organizations fast enough to engage their employees. Companies, including Nike and Walmart, combat the war for digital talent by fostering internal innovation labs, investing in startups and/or acquiring technology firms. Others, like P&G and Google, enter into employee exchange programs to ensure a “cross-pollination” of skills.
On the road to recovery from the legacy disease, the most important thing to remember is that failure must not only be an option, but it must be incentivized. Fear of failure will cripple more companies than failure itself in marketing’s new normal