Darren Covington explores how your business can thrive in a digital environment, insights from Data and Digital Transformation in the Mid Market, KPMG's survey of mid-market business leaders.

How to thrive in a digital environment

There are five major trends that make up a truly digital environment for your business.

  • Innovation – When you migrate to the cloud, your systems have the flexibility to transact anytime, anywhere.
  • Integrating your data so that it becomes the foundation for all your decision-making and the way you serve your customers.
  • Making sure your skillsets and those of your employees allow you to negotiate the new digital environment. Skillsets are always changing, so you need to factor in training and upskilling your people.
  • Privacy and security – As you digitise your business to suit changing markets, do so in a secure way, so that your customers, constituents or clients feel confident their data is not being compromised and they are happy to transact with you.
  • Pivoting against your competitors – Startups and disruptors don’t have to contend with legacy systems and old business models and are probably much more agile than more traditional businesses. You need to be able to compete and moreover even change market conditions by developing new products and services.

Growth through digitisation

Coffee is a great example of how innovation has affected the market place. At the top of the coffee pyramid there are the national coffee franchises like Gloria Jeans and Coffee Club, all the way down to mass market instant coffees like Nescafé and International Roast. But the market changed when skilled baristas began to set up their hipster ‘hole in the wall’ coffee shops and also sell coffee online. That means consumers can now drive through and pick up a cup of coffee and the beans to go with it. What they’re looking for is both convenience and an unique experience.

In financial services, Bendigo Bank is a great example of growth through digitisation, championing community banking through innovative practices that ultimately led to its merger with Adelaide Bank. In the broking industry, regulations, digitisation security and governance are now more important than ever, and Fintech has revolutionised the way in which we buy insurance. You no longer need to go through an insurance broker today – you can buy it online.

A tiered approach to services

In order to make such digital businesses work, you need to be able to attract and connect with your clients from a customer experience standpoint (front office capabilities), track behaviours and trends through the insights from your CRM systems, deliver your products and services (mid-office capabilities) and manage financial transactions and invoices (back office.)

Digitisation is more than a shiny new website and a CRM system. It is the whole supply chain being automated to deliver an experience that is meaningful for individual clients. Fintech has jumped on this, making digitisation a core differentiator. By spotting spending trends, they’re able reach out to clients and offer further services and tailored packages. If a client buys a pram, for example, that probably means a new addition to the family. So, will they be buying a bigger house, or need a larger car? Is refinancing called for? Trends derived from data insights lead to opportunities for growth.

More than a transaction

Every business seeks to drive value, reduce costs and increase efficiency to create profitability in competitive markets and digitisation is key to achieving this. In a world where we increasingly purchase online, the organisations that are able to combine a great customer experience with seamless delivery, will be the winners. Although it’s impossible to replicate the human interaction of a physical store, businesses can differentiate in the way they engage with customers. Chatbots that guide the decision making process – for example, showing a range of appliances and demonstrating how they work – will capture sales. Working digitally is not just a transaction, it can be a true customer experience.

The digitisation challenge

Nevertheless, despite increasing take-up, some mid-market businesses are hesitating. Maybe it’s the daunting prospect of cost, fear of the new, or simply a more fixed mindset, but it’s often more comfortable for them to stick with what they know, especially in more fixed market conditions. The challenge comes when market conditions change.

Some businesses will simply bunker down in difficult conditions but that won’t help them navigate through and be flexible enough to enter a new order. Those with greater vision will realise the value of partnering, so they can gain access to the technology and resources they need at a cost-effective, pay-as-you-use rate, which will enable them to steer their business into the future and derive the insights they need to thrive.

Ultimately, the main driver of digital transformation has to be the CEO, who will ensure buy-in from the whole organisation. However, everyone has a part to play, from marketing departments which will ensure the right messages are communicated, to sales and operations, IT and employees. It takes a whole organisation to thrive in a digital environment and derive the greatest value for the business.

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What’s Driving Mid Market Transformation?

Find out in the Data and Digital Transformation in the Mid Market Report 2021

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