1 1. INTRODUCTION The emergence and adoption of digital communication technology has rapidly transformed businesses, consumers, governments and industries around the globe (Accenture, 2015). Organisations have embraced digital and are shifting to address implications, manage consequences, and capitalise on opportunities presented by these new digital communications platforms (Accenture, 2015). Organisations that are responsive, transparent and willing engage in direct dialogue with their constituents and customers on their chosen platforms are increasingly rewarded in this new landscape (Bishop, 2015). Those that fail to adapt find it increasingly challenging to get their stories out, manage their brands, and develop goodwill amongst their constituents (Cruz, 2015). The shift to digital communication has changed the way that people expect to find, share, and discuss information, and has opened whole new models for engagement and participation in which public discourse occur online and in social networks (Bommel, Eldeman and Angurman, 2014). The volatility, uncertainty and the rapid changes makes it an organisational imperative to transform and re- imagine their enterprises through developing new skills, practices, and policies in order to effectively communicate, engage, and manage their brand in this new environment (Evans, 2015). Because wireless internet, tablet computers, and smart phones have also become widespread, people now expect to be able to access and share information on a wide variety of computing devices and effective communication strategies take this into account and choose content platforms that are widely supported on a variety of devices (Walters, 2015). According to Guzman, Cassidy and Spencer (2015) reaching an audience in this environment demands strategic and skilful use of digital communications and analytics tools, as well as basic investments in creating compelling stories and content. The argument for this paper is that, while early in its evolution, digital transformation represents the next big thing in customer experience and, ultimately, how business is done. Those companies that “get it” and invest more in learning about their digital customers’ behaviours, preferences, and expectations will carry a significant competitive advantage over those that figure it out later (if at all). This essay details what digital really is and how organisations and consumers are embracing this digital transformation and the challenges and opportunities that emerge throughout the process. It will explore the strategic utilisation of the digital platforms and how digital is leading the brand in 21 st century and will discuss the notion of public sphere and how it influences public opinion, the role of the new consumer behaviour and the disruptive technologies and lastly discuss the importance of measurement in digital. This discussion will focus on the South African digital landscape as the case study for this paper.
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1. INTRODUCTION
The emergence and adoption of digital communication technology has rapidly transformed
businesses, consumers, governments and industries around the globe (Accenture, 2015).
Organisations have embraced digital and are shifting to address implications, manage
consequences, and capitalise on opportunities presented by these new digital
communications platforms (Accenture, 2015). Organisations that are responsive, transparent
and willing engage in direct dialogue with their constituents and customers on their chosen
platforms are increasingly rewarded in this new landscape (Bishop, 2015). Those that fail to
adapt find it increasingly challenging to get their stories out, manage their brands, and
develop goodwill amongst their constituents (Cruz, 2015). The shift to digital communication
has changed the way that people expect to find, share, and discuss information, and has
opened whole new models for engagement and participation in which public discourse occur
online and in social networks (Bommel, Eldeman and Angurman, 2014). The volatility,
uncertainty and the rapid changes makes it an organisational imperative to transform and re-
imagine their enterprises through developing new skills, practices, and policies in order to
effectively communicate, engage, and manage their brand in this new environment (Evans,
2015). Because wireless internet, tablet computers, and smart phones have also become
widespread, people now expect to be able to access and share information on a wide variety
of computing devices and effective communication strategies take this into account and
choose content platforms that are widely supported on a variety of devices (Walters, 2015).
According to Guzman, Cassidy and Spencer (2015) reaching an audience in this
environment demands strategic and skilful use of digital communications and analytics tools,
as well as basic investments in creating compelling stories and content. The argument for
this paper is that, while early in its evolution, digital transformation represents the next big
thing in customer experience and, ultimately, how business is done. Those companies that
“get it” and invest more in learning about their digital customers’ behaviours, preferences,
and expectations will carry a significant competitive advantage over those that figure it out
later (if at all). This essay details what digital really is and how organisations and consumers
are embracing this digital transformation and the challenges and opportunities that emerge
throughout the process. It will explore the strategic utilisation of the digital platforms and how
digital is leading the brand in 21st century and will discuss the notion of public sphere and
how it influences public opinion, the role of the new consumer behaviour and the disruptive
technologies and lastly discuss the importance of measurement in digital. This discussion
will focus on the South African digital landscape as the case study for this paper.
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1.1 BACKGROUND
1.1.1 What ‘digital’ really means?
According to Walters (2015) the scope of the concept of digital is broad and complex hence
defining it is a challenge. McDonald (2013) states that digital is an adjective describing an
increasing information intensity and connectedness of physical resources. Resources like
facilities, processes, people, teams become digital through the application of technologies
that extract information and connect resource and its information to other resources
(Elderman & Singer 2015). Bishop (2015), argue that thinking of digital as a set of
technologies (analytics, big data, mobile, cloud, social etc.) limits digital potential to the
instrument rather than the application. A smartphone has information intensity and
connectedness, but it requires applications to transform value and disrupt industries
(McDonald, 2013). The term application should be considered broad going well beyond
‘apps’ to the ecosystems we are able to build based on making things digital (Cruz, 2014).
Digitalisation is the transformative process for turning digitised resources into new sources of
revenue, growth and operational results. Creating a competitive premium is the goal of a
digital business. Cinman (2013) states that digital businesses create competitive edges
based on unique combinations of digital and physical resources, they therefore do things
that others cannot and in ways that build comparative advantage.
According to Dorner and Eldelman (2015) the 21st century has been termed the digital era
and the companies today are rushing headlong to become more digital. But what does digital
really mean? For some executives, it’s about technology, for others, digital is a new way of
engaging with customers and for others still, it represents an entirely new way of doing
business. None of these definitions is necessarily incorrect (Dorner & Eldelman 2015).
However such diverse perspectives often trip up leadership teams because they reflect a
lack of alignment and common vision about where the business needs to go (Accenture,
2015). This often results in piecemeal initiatives or misguided efforts that lead to missed
opportunities, sluggish performance, or false starts (Cruz, 2015). Dorner and Eldelman
(2015) further state that even as CEOs and managers push forward with their digital
agendas, it’s worth pausing to clarify vocabulary and sharpen language. Business leaders
must have a clear and common understanding of exactly what digital means to them and, as
a result, what it means to their business (for a deeper look at how companies can develop
meaningful digital strategies and drive business performance. Notable is that although it can
be tempting to look for simple definitions, but to be meaningful and sustainable, one believes
that digital should be seen less as a thing and more a way of doing things. For the purpose
of this document the operational definition of digital will be made more concrete by breaking
it down to three attributes which are creating value at the new frontiers of the business world,
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creating value in the processes that execute a vision of customer experiences, and building
foundational capabilities that support the entire structure.
1.1.2 Creating value at new frontiers
Dorner and Eldelman (2015) argue that being digital requires being open to re-examining
your entire way of doing business and understanding where the new frontiers of value are.
For some companies, capturing new frontiers may be about developing entirely new
businesses in adjacent categories; for others, it may be about identifying and going after new
value pools in existing sectors (Accenture, 2015). Unlocking value from emerging growth
sectors requires a commitment to understanding the implications of developments in the
marketplace and evaluating how they may present opportunities or threats (Andrews, 2015).
The Internet of Things, for example, is starting to open opportunities for disrupters to use
unprecedented levels of data precision to identify flaws in existing value chains. Accenture
(2015) gives an example of an automotive industry where cars connected to the outside
world have expanded the frontiers for self-navigation and in-car entertainment.
Dorner and Edelman (2015) also state that being digital encompasses, being closely attuned
to how customer decision journeys are evolving in the broadest sense. This then means
understanding how customer behaviours and expectations are developing inside and
outside your business, as well as outside your sector, which is crucial to getting ahead of
trends that can deliver or destroy value.
1.1.3 Creating value in core businesses
Digital’s next element is rethinking how to use new capabilities to improve how customers
are served (Dorner and Edelman 2015). This is grounded in an obsession with
understanding each step of a customer’s purchasing journey regardless of channel and
thinking about how digital capabilities can design and deliver the best possible experience,
across all parts of the business. For example, the supply chain is critical to developing the
flexibility, efficiency, and speed to deliver the right product efficiently in a way the customer
wants. By the same token, data and metrics can focus on delivering insights about
customers that in turn drive marketing and sales decisions.
Critically, digital isn’t about just working to deliver a one-off customer journey. It’s about
implementing a cyclical dynamic where processes and capabilities are constantly evolving
based on inputs from the customer, fostering ongoing product or service loyalty. Making this
happen requires an interconnected set of four core capabilities:
Proactive decision making
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Cruz (2014) states that relevance is the currency of the digital age. This requires making
decisions, based on intelligence, that deliver content and experiences that are personalised
and relevant to the customer. Remembering customer preferences is a basic example of this
capability, but it also extends to personalising and optimising the next step in the customer’s
journey. Data providers such as Click Fox, for example, blend data from multiple channels
into one view of what customers are doing and what happens as a result (Accenture, 2015).
In the back office, analytics and intelligence provide near-real-time insights into customer
needs and behaviours that then determine the types of messages and offers to deliver to the
customer (Dorner and Edelman 2015).
Contextual interactivity
According to Dorner and Edelman (2015) this means analysing how a consumer is
interacting with a brand and modifying those interactions to improve the customer
experience. For example, the content and experience may adapt as a customer shifts from a
mobile phone to a laptop or from evaluating a brand to making a purchasing decision. The
rising number of customer interactions generates a stream of intelligence that allows brands
to make better decisions about what their customers want. And the rapid rise of wearable
technology and the Internet of Things represents the latest wave of touchpoints that will
enable companies to blend digital and physical experiences even more.
Real-time automation
To support this cyclical give-and-take dynamic with customers and help them complete a
task now requires extensive automation Dorner and Edelman (2015). Automation of
customer interactions can boost the number of self-service options that help resolve
problems quickly, personalise communications to be more relevant, and deliver consistent
customer journeys no matter the channel, time, or device. Cruz (2015) states that
automating the supply chain and core business processes can drive down costs, but it’s also
crucial to providing companies with more flexibility to respond to and anticipate customer
demand.
Journey-focused innovation
Serving customers well gives companies permission to be innovative in how they interact
with and sell to them (Dorner & Edelman 2015). That may include, for example, expanding
existing customer journeys into new businesses and services that extend the relationship
with the customer, ideally to the benefit of both parties. These innovations in turn fuel more
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interactions, create more information, and increase the value of the customer-brand
relationship.
Building foundational capabilities
The final element of the definition of digital is about the technological and organisational
processes that allow an enterprise to be agile and fast. This foundation is made up of
elements that include
Mind-sets
According to (Cruz, 2015) being digital is about using data to make better and faster
decisions, devolving decision making to smaller teams, and developing much more iterative
and rapid ways of doing things. Thinking in this way shouldn’t be limited to just a handful of
functions. It should incorporate a broad swath of how companies operate, including
creatively partnering with external companies to extend necessary capabilities (Mckinsey,
2015). A digital mind-set institutionalises cross-functional collaboration, flattens hierarchies,
and builds environments to encourage the generation of new ideas. Incentives and metrics
are developed to support such decision-making agility.
1.4 Digital is about unlocking growth now
How companies might interpret or act on that definition will vary, but having a clear
understanding of what digital means allows business leaders to develop a shared vision of
how it can be used to capture value.
2. THEORETICAL FRAMEWORK FOR DIGITAL: TECHNOLOGICAL DETERMINISM
Technological determinism, simply put, is the idea that technology has important effects on
our lives (Clark, 2011). According to Chandler (2014) the technological determinist view is a
technology-led theory of social change that views technology as 'the prime mover' in history.
According to Chandler (2014) technological determinists, particular technical developments,
communications technologies or media, or, most broadly, technology in general are the sole
or prime antecedent causes of changes in society, and technology is seen as the
fundamental condition underlying the pattern of social organisation. (Chandler, 2014)
technological determinists interpret technology in general and communications technologies
in particular as the basis of society in the past, present and even the future. Technology
changed society and in its most extreme form, the entire form of society is seen as being
determined by technology: new technologies transform society at every level, including
institutions, social interaction and individuals (Qualman, 2009).This theory argues that
because of technological advances and innovations, humans constantly adapt to these new
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conditions that are brought about. Technology creates a new way in which social
relationships come about and how people interact with one another as well as the changes
that occur from a cultural perspective. In a post-modern environment, the digital platforms
and the information that is available gives a relatable space in which consumers are able to
relate to the world. Taking the technological determinism theory into consideration, McLuhan
(1964) argued that the environment in which people live and is around them influences them
and a communication medium has the power to enhance the stimuli that they are exposed
to. This exposure acts as extension of individuals self and so the change in human’s social
as well as cultural behaviour can be evident even in a post-modern world (Clark, 2011).
Technological determinism has two approaches in which the first one stipulates that there is
one communication technology that is the sole cause of social change and behaviour in an
organisation (Chandler, 2014). If technology is not the sole cause, it at least needs to be one
of the determining circumstances for the sociological change and another approach in
contrast explains that instead of technology being the sole role player, it is the facilitator
which could create an opportunity that could see a social change. The argument is that
technology gives the option for a change but it does not mean that it will be taken (Chandler,
2014). Technology nowadays is one of the factors that influence an opportunity for change,
technological innovations are able to assist in creating a cultural change which ultimately
shifts the way in which communication occurs which leads to a change and transformation in
the way an individual’s life is shaped (Sayre, 2015). People have become dependent on
technology as it makes daily activities simpler and easier to manage which creates a change
that does become unavoidable. Due to the constant innovations and new developments,
reliance on technology will only increase which means the theory of technological
determinism will continue to remain appropriate. In a post-modern environment individuals
make use of digital platforms to enhance their lifestyles and this has been evident in the
changing of behaviour. Thus is seen in how technology has the individual, the business and
the society as they get to change and re imagine their ways of doing things in order to adapt
and embrace the change.
3. STRATEGIC UTILISATION OF DIGITAL PLATFORMS
3.1 Creating new frontiers: the pathway to growth
Recent Accenture research (2014) uncovered empirical evidence that deep and broad
penetration of digital technologies in businesses and economies which is called “digital
density” leads to quantifiable improvements in productivity that can accelerate
competitiveness and economic growth. The advent of digital has resulted in a scale
disruption of business models to enter a new space or redefine the existing ones and
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organisations and leaders have embraced this transformation to digital and are re-imagining
their businesses not just as a way to improve their own internal processes, but also as a
driving force for how they grow (Mackay, 2014). This broad digital ecosystem provides the
platforms that serve as the new blueprint for how companies will build connect, and deliver
applications specific to industry problems and opportunities (McKinsey, 2015). Companies in
every industry are trying to find new sources of value through digital technology by using re-
imagination which is putting the user at the centre of everything that company does including
strategy, product development, operations, marketing, sales, and customer service and this
entails the reshaping of an entire enterprise and its capabilities system around the customer
or user experience (Cruz, 2015). According to Dorner and Edelman (2015) most companies
are exploring new business models, developing new user experiences, and experimenting
with new channels and platforms all with the strategic goal of creating significant value in a
digitally powered business environment. To get there, most of these companies are pursuing
the same laundry list of initiatives which includes re-engineering processes and products,
investing in technology platforms, and launching efforts to achieve back office efficiency.
Many are recruiting digitally native talent, setting up internal venture funds, or crowdsourcing
new digital business ideas to get a jump start on this transformation (McKinsey, 2015).
KFC South Africa is a company that has re-imagined its business with the help of a giant
agency is South Africa OgilvyGloo. Ogilvy managed to convey a distinctive brand identity for
KFC and created a tangible emotional connection with its targeted customers which are
youth. The Soundbite campaign reinforced the connection across many different channels:
bricks-and-mortar retail stores, websites, and mobile apps. Evans (2015) from Ogilvy stated
that they fundamentally believed that digitally integrated experiences are right for targeting
the youth market. KFC have been progressive partners in considering new ways to use
technology to engage and deliver against their business objectives. The technology that was
used then allowed us to create a highly engaging experience that we felt customers would
not only love, but also talk to others about. Happily for us, we were right! The reactions from
consumers has been very positive. We ultimately adapted technology that is already on the
market for other commercial uses to support our idea. With our own twist and additions, this
became the 'record table'. These beautifully designed table services were designed
specifically to appeal to the target audience. This serves to show that companies will to re-
invent their business process and embrace their customers and digital, they are able to
deliver value and add value to its brand.
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3.2 The Internet of things
Goosen (2015) state that the internet of things is driving the need for organisations to
transform into digital businesses and this is disrupting business operations like never before.
To be globally competitive means being able to make rapid business decisions (Furlonger,
2014). For companies this means digitisation of process, automation of workflow, access to
global information affecting ones business and being able to respond with agility, based on
factual information. Gordon (2015) writes that digitisation is not just about scanning and
saving a document but having the ability to scan, extract, analyses and search information in
a document automatically as an example. Customers are more connected and this has
resulted in an enormous increase in the amount of data flowing into the organisation. For
companies to survive this revolution, they have to become digitally enabled and take
advantage of business analytics to make sense of this data this is the view of Isaac
Mophatlane, CEO of Business Connexion (2015). “Through the internet of things we are
seeing a vast increase in the amount of devices connecting to organisations, “You can no
longer ignore the fact that you can control everything remotely and that is being driven
through the internet and the cloud.” He further states that for companies to remain relevant
in this age of the digital business, they will have to have a solid strategy in place to manage
these access points, devices, increased data and the potential security risks that come with
it. “You must be able to monitor these devices, knowing where they are in your organisation
and what information they are accessing, otherwise you are leaving your organisation
extremely vulnerable.
Accenture (2014) state that mobile devices mean that our customers have access to the
internet wherever they go. Marketers now have layers of contextual information about
customers’ behaviour, added to what they are already able to track using web analytics tools
(Andrews, 2015). The entwined threads of the Internet of Things and wearable computing
take this theme of mobility and data to the next level. These trends see everyday objects
such as cars, watches, fitness trackers, televisions, and even fridges and thermostats
connected to the internet. All of a sudden, there is a wealth of new customer data available
as this network of devices share information with each other and the people who use them.
And they will be even more new points of interaction and transaction with customers, thanks
to new connected devices.
3.3 Big data
Mullins (2015) argue that preoccupation with the customer is the core in the digital
transformation and reimagining and this is where data has an important role to play. Data
and the insights it yields allow companies to align and re-imagine the organisation from the
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customer experience, decision journey and brand touch points (Morris, 2015). The
companies use “big data” and analytics to gather insights in real time from what people do
on each of these channels, and they deploy those insights in real time as well, providing
products and services that respond instantly after sensing and analysing what people need
or expect (Morris, 2015). The operations are set up to react and pivot on these insights with
nimbleness and ease. They continually measure the impact of these products and services,
and set a “test and learn” agenda that can react quickly and iteratively to feedback from
anywhere (Cruz, 2015). Perhaps most important, these companies position their digital
investments not as costs, but as catalysts: using them to build their capabilities, drive their
culture, and accelerate their progress, creating a virtuous circle where behaviour change
fuels more digital innovation. The digital process is a viable contributor to the business, with
significant revenue and profit growth rates. The ultimate goal of reimagining your business is
to transform it into a user-focused organisation with the capabilities to create significant
value (McKinsey, 2015). Some brands in South Africa including Discovery and many other
leading companies are following this trend of successfully using big data analytics to
manage the demands of their growing businesses (Discovery, 2014). The investment in a
robust and fully scalable system by Discovery has definitely helped them manage their
business more efficiently (Gordon, 2015). The understanding of customer needs has helped
increase customer retention and enhanced a more targeted and efficient overall operation.
Big data analytics has also had a top-to-bottom impact, from helping decision-makers gain
critical and more accurate insights into the business to helping call centre staff resolve
customer queries much faster. In today’s digitally powered business environment, every
management team wants to play offense, not defense (Cruz, 2015). Every management
team wants to capitalise on expanding digital opportunities for their business. And every
management team fears that a disruptive digital competitor will threaten the company’s
positioning. Reimagining your business can help businesses navigate through all that. It will
be indeed a bold move and re-imagination through human-centred design has become the
prerequisite for developing the businesses, products, and experiences that engage users
and drive significant value creation in which digital platforms serve as the basis of doing that.
4. THE NEW CONSUMER DECISION JOURNEY
“In an era of “DIGITAL DARWINISM” where technology, society, and business models
rapidly evolve, customer experience is often elusive”. (Walters, 2015).
In a world where physical and virtual environments are rapidly converging, companies need