Welcome To The Jungle Of Digitalization

You know better than anyone how to run your business. You know what works, how it works and, most importantly, you have your long-standing ways of operating. You have a plan, a budget, a team and things just work. It’s a comfort zone.

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But as Mike Tyson would say:

“Everyone has a plan until they get punched in the face”

This punch can come from multiple directions and in many forms: disruption from new entrants with better business models, better products and smarter technology. It’s in those moments that companies start to ask themselves where they need to improve, change and adapt. Most of the time the conclusion is a lack of digital efficiency and failure to adapt to more modern technologies.

So, what is digitalization? What does it actually mean and how can companies win in the digital course? In a nutshell, digitalization is the process of updating your business processes, culture and customer experience with modern, digital technology to become more efficient. Most digital giants and early adopters have figured it out while a few companies are earning profits from it.

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Think end-to-end digitalization

‍Digital giants are making big money from digital technology, think Amazon, Google, Apple and Facebook with billions in revenue. Critics may say they are making money through unethical and illegal behavior. But they have figured out one thing: value creation.

Most large companies are engaged in digital transformations, but few seem to be on track to become fully efficient and profitable. The reason is that they focus mainly on the transformation part of digitalization and do not streamline the end-to-end touch points of digitalization. To put it simply, digital transformation can be divided into 3 phases:  

1. Buy
2. Transform
3. Sell

In the "Buy" phase, this is where buyers buy and value from data is created for total visibility and decision making. In the second "Transform" phase, this is where companies spend much of their work and investment - integrating HR tools for organizational efficiency and financial tools. While this helps the company run its operations more smoothly and communicate better, it's simply not enough.

Many companies have all the tools they need to be efficient and understand the data, but they are failing to sell their services and products.

Why? Because the third "Sell" phase of digitalization takes a back seat, or is even ignored in some cases. The reluctance of B2B companies to change or launch B2B eCommerce is due to several reasons, the most notable ones can be listed as following:

- Misconceptions about the B2B buyer - There’s a myth that most B2B buyers don’t want to purchase online. In the past, good customer relationships thrived on personal relationships. With the web and new technologies, industry era-led companies believe this will take away human interactions. On the contrary, it will bring businesses closer to their clients with the right tools and processes, facilitating great customer interactions and experiences.

- Lack of native and easy  B2B solutions in the market - Today’s solutions on the market are based on the B2C model and many of the bigger solutions are on-premise, meaning that companies are on premise to follow any new versions that come out and pay.

The need for agility, adaptability and scalability in an ever-changing market becomes difficult with these solutions, as they are not designed orbuilt for B2B requirements.

Management of multiple sellers on the platform, complex bulk ordering, individual pricing, duplication of content across the platform, automatic reading of ERP systems and long buying process that includes multiple decision-makers -are just a few in a long-list of B2B requirements that we see today.

- Mid-management decisions to digitalize - in several companies, big or small, digitalization is stuck at the middle management level. The digitization project and process has  become isolated instead of a company wide effort on all levels and departments. The goal of digitalization is not only to implement faster IT, or commerce tools, but also to reinvent the organization as a whole.  

The existing challenges are complex and tough, which makes it even more important to approach digitalization as a value creation across every channel, from buy to sell.

The reason people buy an Apple phone is not because it is a good product, they buy it because it is easy to use and brings value to multiple needs in people's lives.

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Better ways of creating value

Part of the digitalization jungle is that most companies focus on extracting value and less on creating value. They focus more on internal processes than on creating value for customers. If these companies continue on this path, it is only a matter of time before most of them succumb to competition from the digitalization pioneers. According to a recent Mckinsey study, "82% of B2B decision makers will actively seek a new vendor if a performance guarantee is not offered in the omnichannel experience." (HBR 2022).

Think customers and self-service

Successful B2C brands understand their consumers and buyers. They understand that times have changed and that consumers want to be able to buy, experience or communicate anytime, anywhere and everywhere.

The way B2B customers shop is changing primarily because of the millennial generation (Forrester 2020). Tech-savvy, they expect nothing less than a complete eCommerce experience. They do not want to be limited in their choice of device and payment options to make their purchase.

With the convenience of self-service in our private lives, B2B is increasingly expected to offer the same convenience and simplicity when ordering products or services.

Evaluate your channels

The number of B2B customers that prefer to speak to a sales representative in person or using phone, fax, or even email will continue to decrease at a rapid pace as Millennial buyers gain more decision-making and purchasing power within their organizations.

In the same way that Uber reinvented the taxi industry and Netflix changed the way we watch movies and TV, businesses need to adapt their models to keep up with the times or risk being overhauled like Blockbuster. To offer an integrated experience across channels, an assessment of every channel in place - are they working together or in silos? According to Harvard Business Review (2022), leading B2B companies use state-of-the-art, cloud-based platforms to integrate customer data across channels in real time. Launching isolated websites may work very well to acquire new customers for a while but will most likely frustrate existing customers.

The way companies manage all their customers across their channels will be defined by offering a fully compelling and seamless experience. All channels will have to be streamlined: may it be procurement, sales, acquisition, customer support. Just like B2C, today B2B buyers expect to hop from channel to channel without complexity.

To enable seamless end-to-end B2B experiences, companies must develop a comprehensive combination of agile technology, get rid of channel silos and offer consistent messaging across channels.

No big bang

Digitalization doesn’t need to happen overnight. A rushed attempt at digital transformation is, in some ways, worse than no attempt at all, which is why redesigning the processes at the core of your business requires significant thought and planning. It's better to start small than big, especially if this is the first step in digitalizing business operations.

Achieving B2B commerce success is a complex task, but in reality, it should be an easy task in 2022. An enterprise-wide commitment to B2B commerce excellence can be a real game changer for companies. Not only will they be in a better position to gain competitive advantage, increase decision-making, enhance customer satisfaction and drive revenue growth.

The time is now for companies to take note of how the big digital giants and first digital movers navigate the jungle of digitalization. They do it with agility and savviness, constantly creating new innovative ways of doing business, always with a continuous, deep understanding of a customers needs and behavior.

Waking up to reality from a punch can be tough, but necessary, if companies want to survive in this digital jungle.

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