Across the board, industry leaders have identified digital transformation as the most critical initiative for 2021. In this section of the Digital Transformation report we explore what digital transformation actually looks like.
This initiative has been on the IT team priority list for years and was a top 2021 initiative among our survey respondents. In 2020, McKinsey Research across industries found that, “Responses to COVID-19 have speeded the adoption of digital technologies by several years. […]Among the biggest differences between the successful companies and all others is talent, the use of cutting-edge technologies, and a range of other capabilities. A related imperative for success is having a culture that encourages experimentation and acting early. Nearly half of respondents at successful companies say they were first to market with innovations during the crisis and that they were the first companies in their industries to experiment with new digital technologies.”
Speed Vs Demand
The findings in Penny’s 2021 Direct Sales Industry Benchmark Report were consistent with McKinsey’s observations across a wide range of industries. As direct sales executives identified, the development and delivery of AI, digitization and customer-focused technologies are the biggest opportunities for companies to explore so they remain competitive in the years ahead.
However, one of the recurring concerns is that implementing technology is often slower than the field’s demand and the resulting digital experience is below consumer expectations. McKinsey’s results had shown that, “At the organizations that experimented with new digital technologies during the crisis, and among those that invested more capital expenditures in digital technology than their peers did, executives are twice as likely to report outsize revenue growth than executives at other companies.” These results prove the urgency of digital transformation delivery and solution experimentation. For direct sales companies, the first step is understanding where the company is on the digital transformation evolution. We’ve looked at different stages of such transformation and identified the tech stack markers unique to each stage.
The Road of Digital Transformation
Static data repository
- Disjointed information with poor user experience
- A dispersed back office across regions
- Hundreds of tools – none of which integrated
Information combined with limited actions
- Information is categorized and sorted with
limited user functionality
- Consolidated single back office across regions
- Starting to streamline tools
Insights-driven integrated platforms
- User-centric, focusing on field and customers
- Data and tools actively improving retention and attracting new consultants
- Operational costs reduced and revenue increased
Agile social enterprise
- Fully streamlined back office and app ecosystem
- Actively appealing to digital natives but easy for all to use
- Agile setup and strategy to capitalize on influencer economy and new social trends
Looking at the evolution stages helps identify the current state of the organization and understand the opportunities and milestones ahead.
“The entire world has shifted. Our perspective of what we expect and want is unrecognizable to what it was a decade ago. Technology has to be capable of doing everything easily and quickly from calculating and automatically paying out commission, to creating and disseminating content, to quick, global shipping of all package sizes, to giving corporate the data needed to improve the bottom line of the business. The world is more impatient and more tech-savvy than ever. Customers know what they want and will go somewhere else to get it.”Matt Trotter, Head of Enterprise Solutions
Modernize to simplify
It’s a big initial step anywhere along the digital transformation continuum. The undertaking is significant but the end result will be simpler to navigate and manage, it will cost less from an operational perspective and it will increase revenue. One way of framing this is thinking about digital transformation as a key business development strategy. It’s constantly evolving, looking for new opportunities to improve productivity, increase profit etc.
It’s exciting to see that some companies are approaching the ‘Advanced State’, in particular cosmetic and skincare brands that appeal to younger demographics. Their digital-first approach meant they were well equipped to deal with the twists and turns of the pandemic. They understood the need to be agile and that digital transformation is continuous.
Explore the full report: Direct Sales Transformation: Key Opportunities in 2021 and Beyond