“Digital Lipstick” is not enough

Almost every company that I have come across has plans for digital transformation which have further accelerated due to the Covid-19 crisis. Digitization is reshaping the opportunities and threats facing companies and is forcing a complete rethink of the company’s digital infrastructure

Digital transformation is not a race, it is a culture that needs to be understood and entrenched in your company’s DNA. A “digital lipstick” may fool your customers initially, but they will soon see beneath the gloss when digitalization benefits fail to deliver the value they seek.

As digital technology changes business dynamics, companies need to respond with bold strategies to cope with the digital way of life. Cosmetic changes to digital infrastructure will not be enough, the digital transformation must be skin deep. Superficial digitization can be an illusion that can give short-term boost but will fail in the long run.

Take an example of a bank that touts its digital transformation in the arena of customer support. In order to provide customer support for its online banking, it creates an interactive website with a chat-bot and a form to capture customer complaints. As soon as you hit the submit button you receive an auto reply with a reference number. After a week of silence, you receive an email asking for further details including a screenshot which you duly send and wait for another week.

When you call their support number to follow-up you are made to go through a series of IVR routines before you are lucky to speak to a person who makes you repeat your story and repeat again to his supervisor who then promises to call you back. After waiting for 4 weeks you get a message asking you to go to the bank in person to fix the issue with your account. And when you arrive at the bank, they ask you to use their website for complaints and if you insist, they connect you to the very same call-centre you called before, and the cycle starts again. The only difference is that you are now at the bank and using their direct line. The bank has digitally transformed its website, chat-bot and IVR infrastructure, but its cultural transformation is still to happen.

Companies need to go beyond flaunting digital apps at the front end that look so promising. Digitization must penetrate deep into the back end. The crux is to digitize completely, not just by putting on “digital lipstick” that is deceptive.

The main reason companies are flocking on the digital platform, without getting in sync with the process is because of the pressure to be digitally engaged and show results quickly. Secondly, digital transformation challenges the status quo and questions traditional notions. The process requires every user to build on their digital competencies. Companies must rethink their business models and organizational culture to increase efficiency of service and rate of response.

Hotel chains have embraced digitization for the last two decades, but it was only after Airbnb (a vacation rental company) came along that they realized they were just wearing a digital lipstick. Airbnb radically reimagined the journey for customers seeking tourism experiences and accommodations around the globe and widened the gap between those who embrace digital transformation and those who are just putting up a show.

Home Depot adopted a more expansive digital transformation strategy in late 2017. Over a period of three years, they invested $11 billion to enhance both its in-store product range and online customer shopping experience. With a robust IT department of 1000 professionals, they built up their back-end distribution channels making effective use of customer data, tracking local trends and maintaining proper inventory levels. Over the past two years, their revenue has grown by over $17 billion.

It is evident that changing times have necessitated the rethinking of the architecture of technology, which is not easy for companies used to their long-standing applications. You need to bare your soul to understand your customers, your products, your people and your processes to be able to craft a digital transformation plan that keeps you ahead.

Have you assessed the impact your current digital transformation strategy is making? Have you introspected if the level of digitization is deep within or at a cosmetic level? A “digital lipstick” may not be enough; you need a complete digital makeover.

If you are looking for a complete digital maker, do get in touch with us to help you with a successful digital transformation.