Digital disruption in the equipment industry, part 1: how to prepare
Be a market disruptor or risk being disrupted.
Finally, the news seems to have reached U.S. boardrooms. An April 2017 survey of 388 CEOs by Gartner1 suggests CEOs are progressing in their digital endeavors, with 20 percent of CEOs reporting taking a "digital-first" approach to business change. While 22 percent are taking digital to the core of their business models.
There are enough examples of digital disruption out there for CEOs to realize it’s not a question of if, but when. “It doesn’t matter what industry you’re in,” says business futurist and digital transformation authority Greg Verdino. “In every industry, there is somebody embracing digital and leaning into the technology. Everyone else falls further behind and ends up competing for the scraps.
It’s not about technology, it’s about business strategy
Verdino cautions against moving forward without a clear strategy. “Dealers and rental firms need to have a vision for what the company could or should become. They need to do a lot of hard thinking about what the customer of the future is going to expect from their organizations and the roles they are going to play in that customer’s life. It’s not a technology challenges so much as it is a business challenge.”
Business buyers today are also consumers and their expectations for customer experience have been set by companies like Google, Uber, and Amazon. As millennials move into purchasing roles, they bring with them a digital mindset. The key is to apply digital thinking and technology to deliver an even better customer experience.
Too often, says Verdino, he sees companies investing in technology without ever understanding how that technology helps them become a better version of themselves. “Technology needs to be viewed through the lens of how it helps us achieve our strategy.”
Focus on actionable data
As technology enables dealers to capture infinite amounts of data about their customers, their fleets and the environments in which those fleets work, the challenge becomes successfully managing that data across the organization.
“The key is understanding what data is most important and actionable,” says Verdino. “Dealers don’t need to build a data solution from scratch; there are companies that provide cloud-based data solutions that they can purchase.” He advises companies to look for systems that allow anyone in the organization to extract the data they need to do their job.
Communication is key
The most brilliant strategy when not communicated effectively is doomed to fail. A digital transformation requires the cooperation of each and every employee. “When faced with any change, individuals will resist that change if they don’t know the whats and the whys and the role they play in it,” says Verdino.
His statement is further validated by a McKinsey study of business transformations that found involvement of front-line employees and their managers played a key role in the success of the endeavor.
Successful companies are much likelier to report visibly engaged front-line employees: 73 percent, compared with 46 percent of all other respondents. The top needs of front-line employees surveyed were clear communication on transformation objectives (42 percent), CEO’s visible engagement and/or commitment to transformation (38 percent), and regular access to information on transformation progress (30 percent).
The first steps of a digital transformation are the most important. Get it right from the start, and your journey will be much more successful.
In Part 2 of our Digital Disruption series, we’ll look at what it takes to lead a digital transformation and report on best practices for developing the skills to change your organization.
- Equipment Dealers Rental & Service
- CloudSuite Equipment