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Customers are still the centre of digital innovation

Digital innovation may be one of the most prominent business buzz phrases today, but industry leaders say the trend is far more than just the digital realm.

Shaping a successful digital innovation strategy requires organisations to consider the customer first, as well as a combination of factors depending on the nature of their business.

“The first thing in terms of a digital strategy is not to chase technology; chase after your understanding of the customer,” said Tan Tong Hai, CEO, StarHub.

Citing StarHub’s experience as an info-communications company, Mr Tan said customers may choose to engage organisations through digital platforms but may still opt to transact through physical stores where possible.

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Beyond that, he said, they may select a mix of digital and traditional means for maintenance and servicing.

“So following the footprint of the customer and deciding what is the best way to engage them at every step is most fundamental in the digital strategy,” he said.

“We find that offline-to-online, or online-to-offline, is actually very important. Every business has to identify this mix, and it is very important to serve the customer both online and offline,” added Mr Tan.

Advances in technology will evolve or even disrupt such strategies but these developments could still represent opportunity.

Tomorrow’s digitally innovative organisations

A recent KPMG CEO outlook survey showed that more than 65 per cent of CEOs surveyed see disruption as an opportunity for their business to innovate.

At the same time, almost three-quarters say they hoped to be disruptors in their industry.

Observers agree the rate of disruption can only get faster going ahead, led by technology.

“Companies looking to transform their product or service offering for competitive advantage should therefore take a collaborative approach to innovation,” said Ong Pang Thye, Managing Partner at KPMG in Singapore.

This could involve, for instance, organisations tapping on start-ups and innovators that are already developing purposeful technology enablers and new solutions.

“They can focus on adopting it or orchestrating how they can come together to form new solutions to address their specific business challenges, rather than building new technologies,” said Mr Ong.

The Inland Revenue Authority of Singapore (IRAS) is one government organisation that collaborates in a big way.

It works with various stakeholders in the tax eco-system to co-create solutions and to integrate the tax experience into the natural systems of taxpayers.

“Through service design, IRAS takes an ‘Outside-In’ approach to gain deep insights into taxpayers’ needs in order to develop taxpayer-centred services and solutions,” said Chia-Tern Huey Min, Deputy Commissioner (International, Investigation and Indirect Taxes) at IRAS.

The revenue authority also uses data analytics techniques such as social network analytics, text mining and visual analytics for its compliance work and for service process reviews. 

Innovate, digitalise, transform

Technology has provided organisations the opportunity to transform their businesses by accelerating digitalisation.

KPMG’s recent CEO outlook survey also showed that six-in-10 business leaders expect their investments in emerging technologies to help transform their business and operating models.

“As the world is increasingly driven by technology change, even businesses at the top of their game now cannot expect things to remain the same,” said Mr Ong.

“Adopting a relentless focus on customers' needs and looking for opportunity to add value within the supply chain is important for transforming their businesses for the future economy,” he added.

The explosive growth in data, coupled with the advances in technologies such as artificial intelligence and digital labour, means that how data can be harvested for insights and to add value is unprecedented.

Businesses may need to consider how they can leverage these developments for competitive advantage.

“Where technology was once primarily applied to automate set processes and rules to perform tasks like operations and processing, it can now assist with higher-order iterative processes to support risk management, strategic planning and discovery,” said Mr Ong.

Succeeding in digital innovation

Getting the mindset right

For digital technologies to really make a difference to businesses, having the right mindset is vital.

“The innovation mindset must be pervasive throughout an organisation for digital technologies to make a real difference,” said Mrs Chia-Tern of IRAS.

“This would include allowing the time and space to try out new ideas and experiment on a pilot basis before deciding to scale up,” she said.

There must also be commitment make digital the first and default option and not a secondary one, said Mrs Chia-Tern.

Getting the measurement right

StarHub’s Mr Tan suggests that the entire customer experience is an important indicator for the success of a digital innovation strategy.

“The customer experience is not just digital,” he said, adding that “what we want to look at is the whole experience, the whole episode - they call it episodic net promoter score - and not just a single point of measurement.”

He said consumers and enterprise customers are demanding different ways of engagement.

Some want to be engaged digitally, while others prefer a traditional manner.

“So we have to think about an omni-channel approach to serve these customers,” said Mr Tan.

Getting the right people

Business leaders also say talent or people will be critical to the success of a digital strategy.

Setting the correct tone from the top is key and leaders must lead in driving the culture change.

“Since innovation often starts with the mindset of our people, when we regularly ask ourselves ‘how can we be innovative’, we should also ask how we can build an innovation culture or mindset internally; how do we find innovative solutions to some of our business challenges; and what technology should we be acquiring or investing in to solve these issues?” said Mr Ong.

“An organisation is made up of its people after all. So the workforce must be one that is ready to embrace innovation and is readily adaptable to the changing environment,” added Mrs Chia-Tern.

Business Strategy for the Digital Age

Some questions business leaders can consider are:

  • Are you actively thinking about how to be innovative and a change leader in your industry, beyond simply accepting that change is inevitable and coping with it?
  • Are your business decisions increasingly data and insight driven, beyond trusting judgement based on experience?
  • Are you thinking about creating competitive advantage in your technology choices, from enablement to empowerment?
  • Can meeting your regulatory obligations bring you strategic advantage beyond compliance?
  • Are your business functions collaborating for innovation, beyond cooperating to function?

Source: KPMG Singapore

  • This series is brought to you by CPA Australia to share knowledge on topical issues relevant to business, finance and accounting.