Why experimentation is key to successful digital transformation.
With the ecommerce boom following on from pandemic-led lockdowns, it’s no surprise that digital transformation has become a top priority for many businesses over the past 12 months. But digital transformation has many layers, and few businesses are equipped to address all of them at once. The good news is that, instead of embarking on a five-year multi-million-dollar digital transformation project, businesses can use a more agile process to achieve more effective outcomes sooner.
Transformation is not a monolith
The biggest obstacle for businesses considering digital transformation is that it has many facets. It is often primarily a technical transformation, where the business may have to invest in digital infrastructure, but on top of that is an educational layer where key people within the organisation need to understand digital-first culture. Then there’s a skills gap; if you’re building an ecommerce website without a UX designer, it’s like having a physical retail store without a visual merchandiser.
Related to all this is a cultural shift where digital is not just another channel but a way of thinking and working. For example, a mobile-first mentality is about making the best experience possible for the worst screen; a digital-first mindset is about optimising the customer experience, using the digital realm to make things more connected, easier to navigate and more intuitive to use.
Most businesses do not have the time, budget or capacity to tackle all of these aspects of digital transformation, which would literally take years and millions of dollars. However, even if you did have the resources, the dynamic nature of digital transformation would mean that technology would move on by the time the project reached completion and you would have something obsolete or unsuitable for the market on your hands.
Consider something counter to that: when Apple launched the iPhone, it literally changed how people played with technology. Apple then spent successive years expanding the capability of these handheld computers. The product changed behaviour, so any competitor with a project more than a year or so from completion fell behind.
So how can you transform at the same pace as your customers’ changing behaviour? The difference between an output-focused transformation and an outcome-focused one illustrates this best. Working towards an output requires you to design and develop a product that you hope will fulfil a need when it is complete, whereas working with an outcome in mind allows you to observe, confirm and implement as you go.
We have an automotive client whose transformation is a good example of this. The auto sector is extremely traditional. Their websites tend to act as a brochure for their products and they exist to funnel customers to a showroom where staff will convert interest into a sale. Our client wanted to use data more effectively, so we pulled out a data point, tested it and, from the outcome, was able to validate an insight and derive an action from it. From that came the idea of using chat as a sales channel. This isn’t revolutionary for digitally savvy businesses, but for a traditionally minded client, it gave them the evidence to consider implementation. Testing proved that there was a desire in their clientele for using chat as a sales channel and so they felt confident in investing in it further.
The act of testing and the cultivation of an experimentation mindset within an organisation is really about an iterative series of confirming data that allows you to move forward with implementation. By focusing on smaller pivots where you’re constantly testing and learning, you can lower the barrier to transformation both financially and capacity-wise while keeping pace with changes in customer behaviour as they happen.
This bears out in the survey data collected for The Pulse Report 2020 where we found that 66% of the most experimentally mature organisations in Australia are using experimentation to develop and optimise product features.
If there’s anything the past year has taught us, it’s that market conditions can shift in a matter of days, subjecting any fixed digital plans to obsolescence. Digital transformation is a process, not a destination, so it requires an iterative method to do it well. Experimentation is simply an agile way to use testing to validate data and data to guide implementation, all while accounting for change and growth.
Speed to insight matters
Learn from the success of companies like Amazon and Google who’s teams are built around an Agile-led cycle of continuous improvement and learning that offers data-led insights to identify opportunities for change. This process minimises risks and provides quick validation for investment. While a Waterfall mindset works towards an output that will deliver an outcome, an Agile mindset focuses on an outcome and develops a suitable variety of outputs along the way. Allowing you to increase your experimentation velocity.
Republished article. First published in Mumbrella Magazine.