Digital Transformation as a Connected Enterprise

What's the issue  |  Boardroom questions  |  Board actions

To be successful, your organization needs to be agile – to rethink its future, to reposition and reinvent itself. It’s clear that COVID-19 has been a catalyst for digital transformation with organizations now leveraging new technologies and ways of working to increase their business value and adopt a new culture.

The answer to creating a digitally enabled business now hinges around putting the customer at the center. And the key is to become a Connected Enterprise.

Three-quarters (74 percent) of business leaders report that the digitization of their operations and creation of a next-generation operating model, have accelerated by a matter of months.^[1]  The biggest challenge is to keep up with the pace of transformation: the new consumer is digitally savvy and embraces the ease with which they can interact with organizations through digital channels. (For more on customer experience, read: Is your organization inside-out?)

Many organizations have made huge investments in innovation and improved client support, which was a necessary step to survive during the COVID-pandemic. However, companies need to cultivate agility throughout the entire organization to thrive in the new reality. Boards should ensure their organizations are pursuing the implementation of new digital business models, revenue streams and technology, and develop a seamless digital customer experience, as client expectations are evolving rapidly.

Another important challenge is the need for a new style of leadership. Since it’s impossible to control everything, leaders should develop a connected leadership approach to pick up signals – coming from customers, employees, business partners and the market – interpret them, and respond deftly. That way you can steer your organization in the right direction, even in an unpredictable and volatile environment like the one we experience today. A connected leader’s main job is synergy: bringing together people and departments, involving partners in the ecosystem, breaking down traditional silos and transforming the entire organization around the customers.

A Connected Enterprise is an enterprise where you're fully connected with your customers, employees and business partners. An enterprise that enables you to respond quickly to market signals and pivot to seize opportunities as they arise. Every critical process, function, and relationship of a business should be focused on meeting customer expectations, creating business value and driving sustainable growth in a digital world.

While we know that addressing this is a top priority, many organizations have not yet set or executed on their strategies to bring the whole business closer together. There is tremendous financial impact to getting this right – gains in revenue, profitability, retention and customer lifetime value.

There are five lenses – with customer at the core – that Boards should be looking through when challenging management, in order to ensure the organization is becoming connected.

• Are we connecting with our customers with compelling value propositions, opportunities and interactions?
• Do we continuously manage the economics of customer journeys across all product offerings, balancing the cost to deliver?
• Are we able to customize and communicate relevant content across channels for customers, ensuring that we maintain and grow existing relationships while increasing customer lifetime value?

• Are our staff empowered and enabled to deliver the customer promise through having the right tools, knowledge and training?
• Are we clear on what they are supposed to deliver?
• Are we motivated by a culture of customer-centricity and teamwork to excel?
• Are we leveraging technology and AI in the right way?
• Do we accept failure as part of the innovation culture?

The most successful organizations invest in eight capabilities and are twice as likely to meet customer expectations, achieve their objectives and deliver return on investment^[2]. These capabilities span all attributes of the customer experience, resulting in a connected organization that goes beyond cross-channel interactions.

Boards can also align their actions to these eight capabilities:

Assess the business’ analytics capability. If the organization’s data cannot be harnessed to make insights-based decisions, its analytics capability needs redesigning. 

Ensure management is taking advantage of customer insights in its business model by creating innovation labs to launch new products and services with customers, using emerging technologies or seeking new partnerships.

Ensure management has defined an outside-in view of the current physical and emotional customer experience that the organization’s products or services instill. Integrate this view in every function, process or relationship.

Check whether the business model offers an integrated experience throughout the entire customer journey, and that it is being reviewed to remove hick-ups, in order to enhance customer satisfaction, employee engagement and operational efficiency. 

Ensure management has mapped the key processes across the entire value chain to discover improvement opportunities regarding efficiency and agility from the customer’s perspective.

Live by example: as leadership, act as champions of the customer, and support innovation, collaboration, integrity, purpose, diversity, inclusiveness and agile change – and ensure management is doing the same.

Check whether your management team has started to build a cloud-based technology architecture that plots the course from legacy systems to an agile, integrated, intelligent and scalable architecture, based on strong, secured foundations.

Check whether your management team has found the right partners to create a successful alliance ecosystem, and that they ensure those partners contribute to the organization’s customer-centric vision and deliver a seamless end-to-end experience for customers.

KPMG’s Board Leadership Center (BLC) offers non-executive and executive board members – and those working closely with them – a place within a community of board-level peers. Through an array of insights, perspectives and events – including topical seminars and more technical Board Academy sessions – the BLC promotes continuous education around the critical issues driving board agendas.