The Executive’s Guide to Digital Transformation

The Executive’s Guide to Digital Transformation Insite Software Executive eBook Don’t feel alone if your organization has experienced some disruption as a consequence of changing market conditions. Most manufacturers and distributors have. Whether the impacts are from buyers’ expectations for a self-service experience, the dawn of smart factories, or the increasing use of AI in the marketing cycle, new strategies are required to compete successfully in a rapidly transforming B2B ecosystem. Many companies have responded by deploying some level of digital technology within their organization with results that can be described as mixed – at best. At worst, manufacturers and distributors have experienced extreme frustration, even questioning the value of digitization altogether. Yet the success (or failure) of digital initiatives can be tied to one critical factor – the commitment of the organization’s leadership to changing the way business gets done. For many manufacturers and distributors, the selection and deployment of digital technologies have been delegated to IT or Marketing leadership, with limited participation by other executives. As companies recognize the strategic value of digital, organizations need a much higher level of executive participation and ongoing commitment going forward. Understanding the Role of the Executive Chapter One This eBook focuses on the crucial role of executive leadership within digital transformation, and the three key areas of influence that will make or break a company’s digital evolution. 2 3 Gartner, a leading technology research firm, defines digital commerce as the buying and selling of goods and services using the Internet, mobile networks and commerce infrastructure. It includes research and marketing activities that support these transactions, including the people, processes and technologies to execute at all touch points throughout the customer buying journey.1 Definition of Digital Commerce To arrive at the right strategy, it’s important to think beyond just commerce. In fact, a B2B digital commerce strategy requires that you go beyond a one-to-one buyer and seller transaction, or a responsive website for that matter. Unlike B2C eCommerce models, manufacturers and distributors support endless complexity within the buying cycle, including the many-to-many relationships between people, products and channels. Thinking Beyond Commerce In fact, manufacturers and distributors often have several personas and many different customer journeys to support. Add to that the customers’ expectation of a consistent, smart experience that is supported within both online and offline channels. Leaders need to understand that the impacts of this new eCommerce ecosystem reach far beyond the transactional cycle. 4 As customers’ expectations continue to evolve and become increasingly diverse, executives must set the stage for a commerce environment that is not only always learning and improving, but providing a consistent multi-touch journey. Leadership plays a vital role in an initiative of this magnitude. Executives make three key contributions during the planning and execution of a successful digital commerce transformation: • Playing an active role in the creation of digital strategy, bringing the greater perspective of the organization’s goals and mission. • Championing the need to invest robustly to achieve a true transformation. • Setting performance metrics and stay engaged throughout the entire project lifecycle. Executive’s Contribution to Digital Strategy “Leaders can’t sit back during any phase of the digital evolution. They must be engaged at all times. This is a mission-critical endeavor that requires constant focus, attention and support of the executive team in order to succeed.” Karie Daudt VP of Marketing and Customer Experience, Insite Software 5 94% of all small- and medium-sized manufacturers in the US have not adopted digital manufacturing.2 Only 30 percent of U.S.-based industrial manufacturing senior executives said that their companies were planning to increase spending on information technology in the subsequent 12 months.3 Business Strategy as the Driver of the Digital Journey Chapter Two 6 If the perplexing low rate of investment and adoption in digital technology by mid- to small-size organizations is any indication, it might seem corporate leadership finds the taking the first step on the digital journey intimidating. Or they’ve underestimated the importance of that journey. But don’t judge harshly. Digital is disruptive. Ecommerce is not a software or IT platform feature. It’s an ecosystem with newly emerging business models with their own dynamics, and everyone – everyone – is still learning. What’s important is that businesses realize their pains have also changed. Three kinds of pains motivate the need to begin, or continue, the digital journey. These pains need to be examined carefully and fully understood before creating the right strategy. 1. First, revenue may be at stake. The manufacturer or distributor may need to retain customers or increase revenue with existing customers or products. Or it may need to find new customers to generate new revenue streams. 2. Second, increasing efficiency may be a major driver. This revolves around reducing the cost of serving existing customers, or of finding new ones. Perhaps customers are demanding a higher rate of self-service within the buying cycle, or a new product promises higher margins. 3. Third, engagement may be required. As manufacturers move to more direct sales models, and distributors create cloud- based marketplaces, there is a stronger need for digital brand building and automated marketing. Building digital trust and higher digital engagement is becoming vital to retaining existing customers and finding new ones. What’s Driving the Digital Journey 7 To focus on the right strategy, leaders must acknowledge that digital transformation goes far beyond a simple shopping cart or responsive website. It’s about understanding that your company is about to change the way it does business... forever. Executives Must Be Fully Vested in the Digital Transformation “At Insite we believe a strong B2B digital commerce environment should accelerate the productivity of every single person involved in the buying experience. When that actually happens, an organization is often transformed merely from improvements to internal and external processes. It’s not a pipe dream. We’ve seen many of our manufacturing and distribution customers realize triple- digit improvements within the first year of implementation.” Steve Shaffer Insite CEO 8 To be fully vested, leaders need to in-vest. This means understanding that in order to create a transformational commerce ecosystem, they need to ask some very important questions about the business: • How do customers want to interact with the business? Determining the right mix of online and offline sales and support, and meeting the evolving expectations in terms of experience are crucial. • How will this impact sales and marketing? For many organizations, the move to digital means that marketing takes the drivers’ seat. Digital marketing can provide performance metrics impossible to get with traditional analog methods. This doesn’t mean that sales is not needed, but the value they provide must evolve. • How do internal processes need to change in the new model? For many manufacturers and distributors, complex pricing and quoting mechanisms must be simplified. Every process, however, should be evaluated for impact from this new digital experience. • How does this impact our current go-to-market strategy? For many companies, the digital evolution changes the way they introduce new products and services dramatically. This impacts not only process but people as well. Leaders Need to In-vest 9 “The potential for real-time connectivity with customers, especially through social networks, has generated seemingly endless possibilities for personalized products, services, and communication.”4 To go beyond commerce and realize the immense opportunities of fully embracing a digital transformation, successful strategy requires several main components: Key Components of Digital Strategy Prepare a Strong View of Your Entire Digital Ecosystem Identify the core components, marketing components, personas, and sites for both short and long-term infrastructure needs. Understanding the technology foundation required before beginning your digital journey is gaining desired efficiencies, agility, and results in a hybrid online/offline sales and service model. Draft the Integration Plan and Gain Support from the Entire Executive Team Too often, leaders responsible for enterprise systems are engaged late in the game. Full integration requires full support at the beginning of the digital journey. It is a critical component of the user experience from both a data and an omnichannel consistency perspective. Define Important Personas and Create Your Customer Journey Maps B2B commerce is complex due to the myriad of roles and responsibilities involved throughout the buying cycle. Personas must be prioritized, activities mapped, and then all of these interactions need to be prioritized, enabled, and enhanced by the digital buying journey. Determine Requirements for Marketing Technology and Marketing Programs. Martech continues to evolve at a rapid pace. The right marketing stack should easily interface with your core systems to allow for smooth launch and greater adoption rates. The faster adoption goals are achieved, the more quickly your return on investment will be achieved and propel you towards your next phase. Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable 10 Plan for Resource Requirements This is where many organizations fail to predict accurately, and as a result fall short of the goal. Minimum resources should include capabilities in: - Information technology - Website management - Content creation and management - Digital marketing program development - Digital marketing execution - Product content creation and maintenance - Business operations analysis - Project management Remember that a digital transformation provides unique opportunities to provide ways to re-allocate resources and create new career pathways for existing employees. Training programs may be necessary to equip internal resources with new digital skills in addition to adding those with digital experience to the team. Plan Out Product Content It’s imperative that the manner in which product content is created and managed be defined. It’s impossible for leaders to overestimate the need for good content management, as more and more of the buying cycle is driven by the customer’s need to be informed. Determine Your Partners For most digital transformations to occur successfully, executives need to seek outside experts to bring technology, marketing, and operational excellence leadership to the initiative. You can reduce risk and ensure success by partnering wisely with a trusted firm or consultant. Set Measurable Objectives and Identify Key Performance Indicators (KPI’s) Without some quantifiable measurement, it’s impossible to determine whether you’ve succeeded. Digital channels clearly offer one of the greatest opportunities available today for manufacturers and distributors to drive new revenue and optimize their operations, but this will only happen with a goal-centric approach. KPI’s can help determine the building blocks for success so that obstacles can be met and overcome well before implementation occurs. Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No Mor Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable Highly Connectable Configurable & Customizable Secure Environment No More Upgrades User Specific Content Complex Pricing Extendable 11 Successful digital commerce initiatives drive business model transformation, a process few organizations have been through. Regrettably, that means those embarking on the transformational path have few role models to follow. However, the basic premise that business model transformation will occur should make you stop and realize that this investment will be significantly larger than technology projects of the past. And, digital transformation is a multi-year journey, not a one-time project. Nearly every department in your organization will be impacted by successful deployment of digital technologies. So, the investment not only includes acquiring and implementing commerce technology but must also include an investment in marketing technologies and programs. They provide the drivers behind the identification and re-invention of business operations to support a digitally enabled multi-channel approach – or put more simply, a successful digital transformation. Then, once a good foundation is in place and adoption is driven upward, looking for and driving innovation will be the next order of business. While the level of investment is different for every situation, a good starting point is to ask what could be accomplished with an annual investment of 1% of revenue for the next 3 to 5 years. Most likely, this is significantly higher than technology related investments you’ve made in the past, yet it is necessary for transformation. Organizations that invest and transform successfully will survive and many will thrive. Many experts agree that digital technologies have levelled the playing field, so whether you are small and agile with limited funds or large and inflexible with ample funds, digital technologies let the small play big and the big play small. This is an unprecedented opportunity to reinvent and innovate your business for the future. Invest for Transformation Chapter Three 12 The first step in planning your transformation begins with drafting a solid understanding of your organization’s current technology landscape. You can’t get there from here if you don’t know where “here” actually is. Knowing what you have and where you are is essential for assessing your digital commerce investment requirements. Reaching that desired future state requires you to look at both short and long term demands. Two areas in particular demand your awareness and intention when assessing your investment needs, existing fragmentation and historical technology deficit. The history of ecommerce started with companies bolting on new digital technologies onto existing business systems. To add new digital capabilities, those pioneers simply added new applications, systems, and devices in a patchwork of fragmented components to create a nominally integrated platform. Bolt-on technology was the traditional, accepted way to add innovation by division, department, and task, even if some components functioned in isolation. But that was then. Your digital resources should act in concert, not competition, with each other and with business processes. Similarly, your digital initiatives need agility not possible with fragmented systems to respond quickly in a rapidly changing world. Assessing your organization’s level of technological fragmentation is essential for establishing a coherent, sound, and efficient foundation for your digital transformation. You’ll know exactly what “here” looks like. Role of Technology Technology Landscape Existing Fragmentation 13 In addition to the bolt-on problem, many organizations are in a technology deficit after years of tight IT departmental budgets. Faced with devising their own solutions, some departments would turn to self-funding their own technology initiatives and managing their own implementations. Those independent efforts may now be entangled with each other, creating a complicated, customized architecture that is expensive to maintain and slow to modify or enhance – even minor changes happen at a snail’s pace. If your organization is in a technology deficit, your initial investment in digital strategy will need to include a plan to get out from under these unfortunate circumstances. A holistic and agile approach will not only lead to improved business processes and new efficiencies, it can generate greater customer engagement, leading to closer alignment of your organization and the market you serve. Historical Technology Deficit “Your customers want to use digital channels to connect, research, transact and socialize with you more than ever before. To not only survive, but thrive, we need to engage them on their terms, not on ours.” Steve Shaffer CEO, Insite Software 14 The best thing about digital technology is the abundance of available metrics data. The worst thing about digital technology is the abundance of available metrics data. The right data may be the route to greater company profits and a bigger bonus check, but don’t fall into the trap of trying to track too many metrics to drive results. Your efforts will likely be spread thin and could lead to the organization losing focus while your new transformation takes root. In general, driving results with two or three metrics at one time is the optimal approach to achieving results. Digital metrics best practices start with senior executives identifying and quantifying which business practice areas can gain the most, then establish goals that make the journey and expected outcomes clearly visible. Then you can measure both transformation initiative progress and the business potential created. Good metrics will influence management decisions while supporting specific outcome expectations. Two schools of thought, each with its own categories to measure, guide the selection of metrics. For those beginning the transformation journey, the first recommends assessing progress in digitizing your current business model by measuring departmental -- sales, marketing, operations, etc. -- goals, while also measuring new revenue sources representing growth, market share, and margin metrics resulting from a new, digitized business model. Another view says measure the customer experience, and business operations. A balanced approach will generate the insight to provide customers with value and excellent service while simultaneously optimizing business operations. Measuring the ROI in each of these areas can be accomplished by looking at individual metrics, such as: • Changes in revenue • Improvements to operational efficiency • Changes with customer relationships and engagement • How well the company adapts to change, and how flexible leaders and employees are • How effectively knowledge is used and shared throughout the organization The Importance of Metrics 15 As digital initiatives emerge, organizations can refine their metrics in many ways. For example, the following is a list of metrics identified by Martin Gill from Forrester Research in “Define New Metrics for Digital Business Success”: • Customer lifetime value • Net promoter score • Engagement • Acquisition • Retention • Sales by area Revisit goals every four to six months and establish new targets or even select new metrics. Equally important, as you onboard customers to your new digital platform, ask for and to listen to their feedback on how you can improve their experience, then incorporate this information into your continuous digital improvement program. The important point is to incorporate metrics and goals as an ongoing part of your strategy as they are key momentum drivers. Relevant metrics will evolve and change over time as your market adapts to new business methods and as new technologies are introduced. • Journey attribution • Location • Agility • Cost to serve • Customer orders handled • Available to promise Refine the Metrics “The biggest limitation [of digital metrics] is the lack of a clearly defined digital ambition… Having a clear idea of your digital ambition will give you some ideas of what you should be measuring to measure your progress. You can’t measure something you don’t have a measuring stick for.” Paul Proctor Analyst, Gartner 16 Critical Moves for a Successful Digital Initiative Count on your digital initiative causing change that ripples throughout the organization, but don’t let an unfocused transformation add to or replace the chaos of technology fragmentation. As an executive and leader, your involvement in this digital transformation is vital for keeping the momentum going and in minimizing levels of internal disarray possible with any initiative of this scope. Getting people on the same page and leading them to a shared objective can both ease the transition and demonstrate the company’s to commitment to successful transformation. Risk is unavoidable in any digital initiative, but you can reduce the risk (and some C-level anxiety, hopefully) by building a digital innovation team of three to four insiders and two to three outsiders. The constituents on that team should represent technology, marketing, operations, and finance on the inside; and technology, operations, and marketing on the outside. With the right players in place, you can now map out and build your technology landscape, prioritize your efforts in six- to nine-month phases, get the resources you need, and finally, set goals and measure. You’ll soon see how what was once “there” is now here. 17 Insite Software powers a unified commerce experience for manufacturers and distributors that brings together commerce, channels, content and data to drive better B2B buyer and B2C user experiences and higher sales. Insite Software was built exclusively for B2B focused on manufacturing and distribution. Our software is fully integrated with leading ERP, PIM, CRM and Web Content Management systems, and can be flexibly deployed either on premise or in the cloud. With more than 12 years of successful use, Insite Software’s technologies are trusted by nearly 200 customers across the globe to digitize and engage dealers, franchisers, sales reps, stores, contractors, buyers and consumers. Our solutions power more than a million customer experiences every day. About Insite 18 You probably don’t need to be told digital transformation is a complex undertaking. Successful implementation of eCommerce technologies requires vendors and partners best suited to understanding not just your company’s people, products, and sales channels, but your core business systems as well. Our intimate knowledge of B2B technologies and markets combined with a detailed assessment of your organization’s specific needs, can bring clarity to quoting and pricing complexities. Insite Software can take your business from fragmented point solutions to a seamless, integrated eCommerce engine. Solving for the Complexities of B2B 19 Engineered to meet the ever-changing demands of business, InsiteCommerce takes business-to-business (B2B) eCommerce to the next level with its scalable, robust architecture and deep integration capabilities. The first ready-to-use cloud-based native app for mobile devices built specifically for B2B manufacturers and distributors, InsiteCommerce Mobile enables businesses to leverage and extend their use of Insite CommerceCloud with a fully configurable, transaction-ready native app. Products & Platform InsiteCommerce™ InsiteCommerce Mobile™ 20 An enterprise-class digital delivery platform, InsitePortfolio is designed to provide reliable access to digital product catalogs and related sales, marketing and education content in a branded native application. Integrated with InsiteCommerce, InsiteAnalytics gives you robust analytics tools with the power to retrieve relevant, in-context data from disparate data sources and then present it in an easy-to-consume way from within a single framework. Insite Software technologies are available as hosted, cloud-delivered services. InsitePortfolio™ InsiteAnalytics™ 21 Insite understands that eCommerce isn’t based on a single technology, it’s an entire ecosystem. That’s why we’ve developed an implementation and ongoing support partner ecosystem that includes many solution implementers, eCommerce agencies, and other technology companies to help provide a best-in-class experience to our customers. Clients can leverage the knowledge, experience, and expertise of our partners to: • Create strategic roadmaps for customer’s eCommerce and digital marketing journeys • Implement InsiteCommerce Enterprise or Cloud, integrating it with many other core business systems • Provide front-end development and creative services • Host and maintain InsiteCommerce Enterprise customers • Receive ongoing support services Partner Ecosystem 22 Named a Leader in The Forrester Wave™: B2B Commerce Suites, Q1 2017, analysts at the prestigious research group found that “Insite has a strong vision for a unified value proposition that includes eCommerce and salesperson- centric and persona-driven selling. Customers consistently describe Insite as laser-focused on B2B and especially client-focused — with one customer calling Insite a ‘company that cares.’” Forrester’s 35-criteria evaluation of B2B commerce suite vendors are scored in three areas: current offering, strategy, and market presence. The report details findings about how well each vendor fulfills the criteria and where they stand in relation to each other to help eBusiness and channel strategy professionals select the right partner for their B2B commerce solution. Success Stories Don’t Take Our Word For It 23 A leading distributor of commercial and residential plumbing, waterworks, heating and cooling equipment (HVAC), and pipe, valves and fittings (PVF), operates 172 branches in 16 states with more than 2,500 associates. InsiteCommerce is helping MORSCO launch a cohesive web presence that will allow for each MORSCO brand to create an online solution for its specific customer-base. Morsco “Amazing. It saves associates hours every week and we’re just getting started. Customers have told us that we would not have received their ‘change orders’ business if they couldn’t check inventory in just a few clicks.” Darren Taylor CMO, Morsco View Customer Success Story 24 A Boston, MA-area medical supply distribution company founded over 70 years ago as a diaper delivery service, serves all of the New England area with over 100 employees and offering a catalog of over 30,000 products. Noticing the demands from nursing homes and other long-term care facilities, the founders recognized these businesses had other product needs that Geriatric Medical could fulfill such as janitorial, nutritional, medical and other supplies. Powered by InsiteCommerce, Geriatric Medical’s website accounts for nearly 80 percent of its annual revenue. The transformation to digital has had an impact as great as the company’s decision to expand from diaper delivery. Geriatric Medical “For us to say we’re a B2B company who has an eCommerce solution isn’t accurate. We’re really an eCommerce company.” Justin Racine Director of Marketing & eCommerce, Geriatric Medal View Customer Success Story 25 Plak Smacker supplies thousands of dental products to orthodontists, pediatric dentists, and general practitioners alike order products from Plak Smacker to not only stock supplies for in-office care, but also to purchase take-home products for their patients to encourage good oral hygiene practices at home. Recognizing the changing needs of their buyers, Plak Smacker set out to improve their eCommerce experience. Plak Smacker “The buyer in the dental office is changing; he or she is less excited about having reps call or visit them, and is asking, ‘why don’t I just buy these supplies online?’” Scott Leece VP/GM, Plak Smacker View Customer Success Story 26 Royal Canin, a global pet food manufacturer established in 1968 and headquartered in southern France, required a model to enhance the way they were selling to veterinarians, breeders, pet specialty retailers, as well as associates that work within these organizations. The Insite Platform empowers Royal Canin to sell direct to breeders and veterinarians, as well as associates that work within these organizations. Referrals drive business, and the Insite Platform helps drive this relationship. Royal Canin “The results really do speak for themselves” a Royal Canin executive notes. “Insite met and surpassed all of our goals and objectives so far.” Jim Squires Director of eCommerce and Digital Marketing, Royal Canin View Customer Success Story 27 Whatever drives your investigation of digital transformation – continuous improvement, an immediate need, or simple curiosity – we’re here to help with facts based on our years of experience across a wide spectrum of business types, models, and industries. While you can find an abundance of information on our website, you may opt to request a product demo to see the full breadth of the capabilities available to you and the benefits they provide. If you’re unsure where or how to implement the digitization technologies providing the greatest impact, Insite consultants can work with you to create a detailed requirement assessment to reveal the areas of greatest opportunity for you. Get started today by calling us at (866) 746-0377, emailing us at info@insitesoft.com or visiting our website at www.insitesoft.com. The Path to Digitization Taking the First Step 1. Gartner.com 2. National Center for Manufacturing Sciences 3. PwC, 2016 4. McKinsey and Company, 2017 28