Digital Transformation: Technology and New Business Models as Drivers of Customer Experience

Introduction

Businesses thrive when they deliver the customer experience expected of them. Since customers like to shop at places where they feel good, delivering and surpassing customer expectations is the path to long term loyalty and higher consumer spends.

Customer experience is a function of people, processes and technology, which are guided by corporate vision. As technology has advanced, it offers ways to provide customer experience in many ways, supporting people and creating processes that enhance every interaction that a customer has with a company. The value of digital marketing and strategy, often thought of as using modern internet and communication technologies in a company’s business operations, actually offers unique ways by which to enhance customer experience. Kumar (2021) writes that though many digital marketing courses even today focus on gathering views on brand content, gaining followers or making users click on links and advertisements, its actual contribution is much richer if we deploy it to deliver and surpass expectations of customers.

This chapter explains that digital technologies provide a way to re-imagine businesses. Old methods of doing business give way to new ones as companies adopt digital transformation. The idea is to have a clear digital strategy that is able to change its existing culture and style of working and invent a completely new way of doing business, transforming processes, talent engagement and business models. Companies that are not digitally mature focus on operational technologies, whereas those that are digitally mature look to transforming the business.

The chapter is organised as follows. We first explain the concept of digital transformation. Usually companies treat digital as just another department in the organisation, but it actually means re-inventing business models. Companies have to use digital to develop ecosystems that exert gravitational pull. After digital transformation, companies must strive for digital mastery, which is explained in the next section. Digital mastery is obtained by building four pillars, embedding digital technologies in business operations and the organisation’s DNA.

Next, we look at how companies reinvent their business models and try to optimise consumer decision journeys. This leads us to the next step – rebuilding the organisation. The next section describes how new business models must be oriented towards delivering customer experience at all times. We illustrate this with the help of several companies that have successfully transformed themselves.

We have selected two case studies to show how companies must transform themselves. The first is that of Asian Paints, an old economy company founded in 1942. The case study describes how the company has transformed itself and build digital technologies into its DNA. The second case study shows that being digital savvy is not enough – even a modern, highly digital company like Microsoft can hurtle towards extinction if the focus on customer experience is lost. The case study describes how it became a digital master again.

The case studies highlight our argument that companies must constantly reinvent themselves. Being digital is not enough – it is important to use digital technologies to enhance customer experience. Only companies that marry digital transformation with an obsession with customer experience can hope to survive in an environment marked by Volatility, Uncertainty, Complexity and Ambiguity, which is remembered by the acronym VUCA.

The objective of this chapter is to show that digital technologies are not simply “add-ons” or tools to conduct business. They have the potential to completely transform business models. Companies that can build digitally transform and change their DNA have a better chance to deliver customer experience than ones who merely treat digital intervention as a separate unit or department.

We hope to draw attention to a gap that exists in many companies: their efforts of using technology are limited to digitising some functions or using social media messages. Yet, a majority of companies mistake digitising a few functions as being digitally savvy. But, as pointed out by Leinwand & Mani (2021), digitising is not the same as digital transformation. The “accelerated wave of digital initiatives must not be confused with the real business transformation needed for success in the digital age,” they write. Digital strategy must be about building real, long-term competitive advantage.