By Peter Kelly, CTO of KAR Auction Services & President of KAR’s Digital Service Group
In an increasingly digital world, where computers, tablets and smartphones provide 24/7 access to the Internet, it comes as no surprise that customers in both the Business-to-Business (B2B) and Business-to-Consumers (B2C) spaces are conducting more and more of their business online. With such enormous opportunity for growth and increased customer interaction in the digital space, it is critical that businesses develop, implement and maintain a robust digital strategy that is precisely tailored to the needs and lifestyles of their customers.
To make that happen, decision-makers need to first understand the ways in which digital tech in its varied forms can transform customer experience, build relationships and grow business; they need to be familiar with the high-level questions CTOs should be asking themselves and their senior leadership team to ensure they are building a strong, flexible and innovative digital approach; and they need to have a working familiarity with the perspectives and priorities that IT and digital teams must consider when exploring, researching and building their digital infrastructure.
While the impact of new technologies on business is both comprehensive and¬–in many cases–utterly transformative, the influence of the digital revolution is most keenly felt in a few specific areas:
Touch points and traction
One of the most influential ways in which technology is changing the business world is by dramatically enhancing customer connection and communication. There are many customer touch points enabled by the technology in the present digital marketplace. In my own line of work, for example, weekly in-person auctions have now been augmented by a virtual environment in which transactions are conducted essentially 24/7. With websites, mobile apps, and an array of powerful new tools with which customers can access products and services at anytime and from anywhere, the frequency of customer interactions expands significantly. Because technology is more and more becoming the gateway for your customer interactions, shaping the nature of those interactions is essential: remember that even though the technology may be complex, the customer interaction cannot be.
In that context it is critically important to really know your customers and to understand what they want. While “know your customer” is hardly a new idea, it takes on significantly greater urgency in an environment where the needs and priorities of different customers are translated with such immediacy and frequency from aspirational theory to mercantile reality. Accordingly, understanding their pain points, understanding how they view your business, understanding the value that you provide for them, and structuring your operations accordingly is more important than ever before.
Depending on the ways in which your business integrates and adapts to new technologies, you may also have to change how you view yourself–a shift that can be surprisingly difficult to make for some companies.
It is critical that businesses develop, implement and maintain a robust digital strategy that is precisely tailored to the needs and lifestyles of their customers
.Along the same lines, it is also important to maintain flexibility, and to not be irrevocably tied to any one particular model or approach.
In a tech-driven marketplace, it is also important to keep a close eye on your competitors–both existing and emerging. If you aren’t meeting a need or moving as fast as your customers want, it becomes a vulnerability that aggressive and opportunistic competitors can exploit.Efficiencies and synergies
Beyond business models and evolving priorities, the changes wrought by digital technology unlock a whole host of new technical, operational and logistical possibilities. New technologies have enabled a great deal of new process automation, workflow, and improved efficiencies across the whole value chain. With increased efficiency it leads to decreasing costs, that subsequently facilitates additional opportunities for innovation.
For all of the excitement and all of the powerful potential of digital tech, business owners and operators should take care not to get lost in the digital labyrinth. Remember that even the most powerful and complex technology is deployed in service of very simple and straightforward goals: service, value, or an improved customer experience. When deploying new technologies, decision-makers should work to maintain focus on how that tech can alleviate or eliminate pain points.
It was not long ago that IT was seen as a separate entity–its own discrete department that in many ways operated independently from the rest of the company. That model is no longer viable. IT has to be an integral and collaborative component–fully integrated with the rest of the organization. To that end, encourage an active dialogue between IT leadership and business leadership. Take concrete steps to help blur or even erase what has historically been a bright line between tech and other pieces of the professional puzzle.
It’s critical to have a leadership team that is tech literate. Not in the sense that your executives all need to understand the intricacies of coding, but they should understand how technology impacts your business: what it can do for you today, how your customers use it, and its potential for spurring future growth and new opportunities.
New tools and new businesses
New digital technology can do much more than simply enhance existing businesses: it also enables a whole range of different business models that simply did not exist in the past, like Uber and Airbnb. The ubiquity and accessibility of mobile devices and powerful tools like scanner, cameras and GPS do more than improve connectivity–they make a whole new range of business categories possible.
As tech landscapes evolve, and as our businesses evolve with them, entrepreneurs and business owners need to think critically and strategically about how to ensure that they are making the right investments in digital technology. Those investments should be given the same weight as investments in physical infrastructure and personnel. Decision-makers should be asking themselves questions like: Are we developing the right team to take advantage of new tech, or do we need to bring in new skillsets? Are we prioritizing the customer experience throughout?
Because the pace of change has increased so dramatically, businesses need to be more nimble and more willing to evolve in a dynamic and rapidly changing professional environment. From a competitive standpoint, digital tech represents both an opportunity and a threat. But approaching it as a threat is a strategic mistake that will inhibit your ability to drive the pace of innovation. Customers are always demanding more—more efficiency, more speed, more choice—and it is incumbent upon businesses to move proactively to anticipate and fulfill those demands. George Westerman at the MIT Sloan Center for Digital Business says, “Digital technology will remain the endless agitator of the business world.” I agree with that and sitting still is not a viable option for any business today. In a world where change is the only constant, successful businesses should look on the opportunity side of the equation and put themselves in a position to drive that change.