WHITEPAPER

SEPTEMBER 2018

A Guide to Digitally Transforming

Your Organization

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Introduction3

6 The State of Digital Transformation

13 Conclusion

12 Why an Easy-to-Manage IT Stack is Key to a Successful

Digital Transformation

8 5 Steps Toward Digitally Transforming Your Organization

Be customer-centric

Start with the end in mind

Find your competitive advantage

Where others zig, zag

Develop a culture and strategy around continuous evaluation and improvement

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Introduction

It’s the 21st century. Do you know where your customers are?

The question is almost irrelevant. Because regardless of where they’re geographically located, your

customers are almost certainly within inches of a device that puts the entirety of human knowledge in

the palm of their hands. And if you haven’t fully considered the radical implications of your customers’

collective obsession with digital technology — let alone the possibilities that this technology can

unlock for your business — now’s the time to do so.

This whitepaper provides insight into the digitally transformed world we live in and discusses what

exactly what “digital transformation” means, giving some examples of the kinds of services customers

now demand, and outlining practical steps that organizations can take on their quest to becoming

more customer-centric.

Broadly speaking, digital transformation involves integrating digital technology into every aspect

of your organization, fundamentally changing how you operate and deliver value to customers.

This requires a deep understanding of how your customers’ habits have changed and how your

organization currently interacts with customers at every touchpoint.

Digital transformation involves integrating digital

technology into every aspect of your organization,

fundamentally changing how you operate and deliver

value to customers.

You could view digital transformation as a process that’s been in the works for some time or a process

that is just beginning in earnest, depending on whose perspective you take. The customer’s digital

transformation started as soon as they picked up a smartphone and started using it as a powerful tool

to interact with the world around them. On the other hand, many organizations have only just started

to realize the potential of these new technologies and begun to revamp their processes and business

strategies in response.

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Why must organizations digitally transform every aspect of their operations, marketing, and strategy?

Because organizations that don’t do so risk falling behind their competitors, failing to match the rising

expectations of customers, and losing out on broader market trends. But it’s not all doom and gloom.

including:

IMPROVED CUSTOMER LOYALTY

Customers want to interact with brands that make them feel valued and important. Companies

that harness the power of digital technologies can foster a closer, more intimate connection with

their customers by leveraging data about customer needs and behavior. Take a clothing retailer, for

example. If the retailer can glean insight about a particular customer based on his or her previous

shopping history, the retailer’s app can automatically serve up promotions or coupons for products

that may be relevant for the customer, thus driving revenue. Additionally, suppose a customer sees

and convenient way for the customer to order the correct size online — say, through a tablet near the

clothing section — the retailer is less likely to lose the customer to another store.

MORE EFFICIENT PROCESSES

integration between manufacturers’ IT (information technology) and OT (operational technology)

departments, a form of digital transformation. By bringing IT and OT closer together, manufacturers

can do things like quickly spot the factors causing product loss incidents using intelligent security

cameras, forecast demand using sales data, or detect when manufacturing equipment isn’t operating

at full capacity.

BETTER EMPLOYEE PRODUCTIVITY AND RETENTION

As organizations work harder to keep up with newer technologies, employees will view their

employers as forward-thinking and hold them in higher regard. For instance, companies who take

advantage of new telecommunications technologies can let employees work from wherever they’re

INCREASED BRAND VALUE

By embracing digital trends, organizations, even those that have been around for decades, can

become relevant and fresh to a new set of customers. Nike, for example, has fully embraced the

power of digital to give customers new ways to engage with the Nike brand, whether by joining

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designed shoes online using Nike ID. These innovations have helped Nike reach entirely new

Companies that have fully embraced the notion of digital transformation and adopted the same ethos

company’s CEO, who took the reins in 2016, announced that Adidas would allocate €900 million

toward digital operations in 2018, with the goal of increasing online sales and decreasing Adidas’

Even organizations like restaurants and airlines, which aren’t traditionally thought of as tech

companies, have found tremendous success in digitally transforming their businesses. Whether by

using digital technology to revamp their supply chain, or giving customers the ability to customize

involve adopting and embracing new technologies; it also requires imagination.

Digital transformation requires not only a big imagination and deep customer empathy, but also

willingness to adopt new technologies. Of course, the variaty of digital initiatives that organizations

can undertake means that there is an array of technologies to choose from — from customer-

facing apps, to collaboration platforms, to APIs that can link one company’s products with another

companies’ products and services. But whatever digital initiatives an organization might choose to

and ample bandwidth to go around serve as the base upon which fantastic experiences are built. The

easier these foundational elements are to manage and customize, the more likely further initiatives

are to succeed.

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Let’s start with some sobering news: many organizations haven’t even started to put together any sort

of plan around how to tackle the rising consumer expectations and high competition brought about

by digital transformation. Why? According to a Cisco report, a few reasons why small- to medium-

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It’s clear that for most companies, the main thing stopping them is FUD (fear, uncertainty, and doubt)

and, oftentimes. it’s simply a lack of IT resource, rather than a lack of awareness of the importance of

digital transformation.

Compared to organizations in the US, many of which have embraced digital transformation

wholeheartedly, European companies aren’t as prepared for this trend or are less optimistic about

organizations’ move toward a digital future.

CORPORATIONS SURVEYED BY ETVENTURE IN 2017

“Well” or “very well”

prepared for digital

transformation

35%

85%

transformation

42%

90%

Digital activities

6%

50%American

German

business models or been formed entirely as a result of customers demanding on-demand digital

services in droves.

European organizations brave enough to follow such trends have a huge opportunity ahead of them

to outpace their competitors, improve their bottom line, and increase customer satisfaction.

digitalization and demonstrate what the future of successful digital transformation could look like,

such as car manufacturer, Audi.

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cars and features through virtual car dealerships, especially in urban areas. Audi City showrooms,

Audi models in virtual space, helping potential buyers simulate the driving experience. Tablets help

1:1 scale vehicle according to their individual wants and needs. Audi has thus developed a digital

concept that is customer-focused, innovative, and exciting. Importantly, this digital concept was

possible only after Audi made some critical investments in its technical foundations, like installing

reliable Wi-Fi at every Audi showroom, that can be easily installed and customized on-site according

As global trade increases, European companies are competing with enterprises from across the globe.

Since digital technologies have helped companies reach new buyers and bridge gaps between

markets, it makes sense that digital transformation and globalization go hand-in-hand. Companies

around the world won’t rest in their quest to move forward digitally, and European companies that

keep up the pace are poised for success.

Why do SMBs

hesitate to

invest in digital

transformation?

67%

59%

62%Data protection and

security concerns

59%

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While the term “digital transformation” certainly isn’t some meaningless buzzword, it requires more

organizations should keep in mind when launching initiatives related to digital transformation.

Stay customer-centric

problems based solely on the opinions of their employees or management, rather than relying on

feedback from their customers or thinking about things from the customer’s point of view. This often

failed because the product tried to integrate social media (traditionally a more “public” experience)

uptake.

Too many enterprises identify, diagnose, and try to

solve problems based solely on the opinions of their

employees or management, rather than relying on

feedback from their customers or thinking about things

from the customer’s point of view.

example, when Amazon rolled out Prime, its premium subscription service, the prevailing industry

norm was online orders would be shipped quickly, but actually delivering the item took much longer

(and cost a fair bit of money). Amazon ingeniously realized that customers didn’t care about when a

package was shipped; they ultimately cared about when a package actually arrived. By promising

customers free two-day delivery on millions of items, Amazon gained dominance in the online retail

world and proved the value of starting with the customer in mind when it comes to new initiatives.

Start with the end in mind

of starting with the end in mind when it comes to setting goals. By imagining what the end result of a

knowledge one needs.

Your Organization

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something that may not come intuitively to every organization: bringing together a cross-functional

team. Only by getting people from various departments together into one room is it possible for an

organization to agree on what’s feasible and what ought to be prioritized.

For example, suppose a large restaurant chain wants to expedite the process by which customers

order and get their food to their tables. The IT team may initially consider installing tablets at every

table for customers to use to order, only for the marketing team to contribute the crucial insight

the ordering process. Relevant metrics to track here may include the length of implementation, the

average time between when customers order and when their food gets delivered, and the number of

errors made throughout the entire ordering and delivery process.

Find your competitive advantage

No two organizations are the same — each has its own motivations, culture, goals, product(s), and

people. In order to digitally transform, it’s important to look at your company with a critical eye and

think deeply about what sets you apart from your competitors.

experience? What are your customers demanding? Are you more nimble than your competitors, or

industry? What are your employees uniquely passionate about and capable of? Ask yourselves these

It’s important to look at your company with a critical eye

and think deeply about what sets you apart from your

competitors.

Take Domino’s Pizza: The company has undergone a massive transformation over the last few years,

spurred by advances in technology that have allowed Domino’s to go from an also-ran to a fresh and

innovative leader in the pizza business.

Positioning itself as technologically advanced and in touch with its customers’ desires, the company

created new ways for people to order pizza: they could text emojis, tweet at Domino’s, ask their

Amazon Alexa, send a Slack message, or even use the remote control for their smart TV. The

company also came up with a clever marketing campaign, acknowledging its pizza’s tastelessness

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and promising to do better, and promoted it heavily on digital properties like Facebook. Though some

of these digital initiatives may have seemed silly, they clearly hit a nerve: Domino’s share price has

Where others zig, zag

to digitally transform your organization. If you merely ape your competitors’ approaches to digital

transformation, customers may view you as a copycat instead of as a forward-thinking enterprise.

transformation need look no further than electronics retailer Best Buy. The retailer struggled for years

against the juggernaut of ecommerce companies like Amazon, since Amazon could not only compete

Best Buy realized that its weakness lay in the fact that it had long managed its retail and online

operations separately. If a customer looked at an item online but the item wasn’t in one of the

company’s six warehouses, the item was listed as “out of stock” even if it was available in a physical

retail store. Best Buy knew it couldn’t simply mimic Amazon’s approach with Prime, since Best Buy

like service exclusive to Best Buy.

operations, introducing the option for customers to have their orders shipped from a store or simply

Buy, the company was able to ensure that customers received their items quicker without having to

pay expensive shipping fees.

innovative way to digitally transform your organization.

Creating an omnichannel experience through digital transformation, in essence, let Best Buy out-

Amazon Amazon — not by copying them, but by embracing its own strengths. Best Buy’s network of

stores and strong electronics-focused brand provided the retailer with a unique opportunity to delight

customers.

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Develop a culture and strategy around continuous evaluation

and improvement

It’s tempting to think of digital transformation as a one-and-done process, like writing a blog post or

building a new freeway. The reality, though, is that digital transformation is really more of a philosophy

for continuous improvement. As technologies and consumer expectations keep evolving, so too must

organizations hoping to keep up and stay relevant.

Continually ask yourself what’s working and what could be improved — are consumers responding

the competition up to? And what are some emerging digital trends that may inform future plans — is

there a new technology entering the mainstream that can be a future opportunity?

It’s also crucial not to forget about the fundamentals. While hot new technologies like AI get most of

the headlines, the technical foundations upon which digital experiences are built are crucial to keep

up-to-date. For example, if an in-store experience relies on a fast Wi-Fi network, you need to make

sure that the network is secured against new threats and is up to the latest Wi-Fi 6 standards. Or if

keeping customers engaged on mobile platforms is a key part of your digital strategy, ensuring apps

support the latest and greatest features on iOS and Android matters.

Many companies, large and small, have embraced the notion of “fail fast, fail often,” a classic Silicon

Valley mindset that calls for organizations to be unafraid to take small risks. That’s because the risks

inherent in trying new, innovative approaches are far superior to the risks of staying complacent, and

momentum toward bigger strategic moves.

As technologies and consumer expectations keep

evolving, so too must organizations hoping to keep up

and stay relevant.

Developing this sort of mindset doesn’t require companies to increase their budgets or hire new

to broadly communicate the “what” and the “why” clearly to every employee and enlist everyone’s

participation in order to see a digital transformation succeed. Establishing a feedback loop that relays

feedback from customers back into the organization also matters, so that organizations always have

the latest information from which they can make important decisions.

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advantages, and put together a system and culture around continually re-evaluating your progress.

Excellent! Now it’s time to start thinking about the technology backbone that makes a digital

transformation possible.

What you want to accomplish, where you want to start, and what types of infrastructure you already

have in place are all factors that will determine the technological investments your organization

EVERYTHING’S CHANGING

As mentioned earlier, digital transformation is an ongoing process that requires organizations to move

fast and be nimble. Technology is always evolving, and so too are customers’ expectations.

In order to be ready for tomorrow (and the days that follow), organizations need a tech stack that can

requires minimal upkeep and can easily grow with the organization’s needs, rather than a stack that’s

strategy.

For example, traditional IP camera systems can only store video on specialized network video

recorders (NVRs). If a multi-campus school district deploys these cameras at all of its campuses and

has high retention requirements, it might be forced to purchase more and more NVRs. On the end

hand, a camera that stores all of its footage on the camera itself and can stream video to the cloud

requires a less complex infrastructure (by eliminating the NVR) and helps the organization grow easier

as its needs increase.

SECURITY NEEDS TO BE A PRIORITY

As digital technology transforms more processes and customer experience, security risks inevitably

major service failures by 2020 due to the inability of security teams to manage digital risk. Though

activity, and uptime. Easy-to-manage technology solutions — particularly those managed through the

ROAD MANAGEMENT MATTERS

The breadth and depth of most digital transformation projects practically require leaders to be able

to easily manage technology from anywhere, instead of having to be on-site. That’s because most

manufacturers, and hospitals — have technologies (e.g., networking, electronics, or manufacturing or

medical equipment) deployed in more than one location. Multi-site digital transformation projects can

scale only if remote management is possible.

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Conclusion

Why should organizations embrace, rather than fear, digital transformation? Cynics would argue

that it’s a matter of “evolve or die,” and while there may be some truth in that, there’s also a more

optimistic way of looking at the matter. Organizations should digitally transform because at the end

customers more loyal. Digital transformation isn’t necessarily about reinventing the wheel; it’s more

about doing things just a little bit better than your competitors, because in the eyes of your customers,

It’s important to also keep in mind that digital transformation is a means to an end, not the end

itself. Organizations absolutely ought to congratulate themselves on creating and implementing

back to a few earlier examples, retailers that use advanced analytics tools to learn more about

their customers then need to follow up with an exemplary customer experience; manufacturers

that integrate IT and OT need to take action on the insight they’ve gained to improve operational

Cisco Meraki, a leader in cloud-managed IT, creates technologies that organizations around the world

solutions — wireless access points, switches, security appliances, endpoint management, network

insight, and security cameras — all designed with simplicity in mind. Learn more about how Meraki

can help make your digital transformation ambitions a reality.