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Nine Digital Shifts to Sustain B2B Companies During Trying Times Trends in Digital Innovation

Supply chains and alternative channels take on outsized importance.

The biggest challenge for today’s businesses is to consistently produce personalized content at a large scale, deliver it at breakneck speed, and credibly have an impact on revenue. The businesses that are successful in this endeavor have invested in an innovative set of capabilities that make up an “Agile Content System”.

Digital transformation in normal times is usually considered a growth opportunity – and it is.  B2B companies coping with the pandemic are also demonstrating that shifting to digital can provide important benefits in sustaining the business through:

  • Alternative channels for customer engagement – the use of Zoom, Teams, Slack, and other forms of collaboration and meeting apps have skyrocketed
  • Keep parts of the supply chain operating – ecommerce has proven less vulnerable to disruption than call center or face to face channels
  • Lower costs – by using data analysis to uncover and target expense reduction
  • Preserve cash flow through business model redesign – SaaS business models are providing a valuable cash flow buffer in the face of decelerating demand.

These benefits are crucially important in this unsettled period, but they will also be valuable once the crisis recedes. Digital marketing and selling, digital experience innovation and digital operating model renovation stand out as three digital transformation shifts that leaders can use to sustain their business as much as possible during this crisis as well as to accelerate customer demand once the economy rebounds.

Identifying and pursuing quick digital wins that can also elevate future performance has become an immediate imperative for B2B leaders.  The purpose of this article is to provide guidance on where to look and what to prioritize in each of the three transformational shifts. Our recommendations are based on the discussions with B2B leaders and examination of successful cases of B2B digital transformation we conducted for our forthcoming book The Definitive Guide to B2B Digital Transformation

Digital Selling and Marketing:

In such uncertain times, the best customer for most B2B businesses is the customer they already have.  Current customers are much more likely than new prospects to buy, have a lower cost to serve and will be more willing to endure the delays and interruptions their current suppliers encounter.  Using collaboration and virtual meeting tools to enable sales teams and intermediaries to connect with buyers who are working from home is only a first step.  Customers have a need to be connected to a bigger picture about what’s going on in the market, in the supply chain and even in different parts of their own company. They may require frequent updates on even small issues that previously wouldn’t garner their attention but are crucial to keeping their business afloat. And, customers need help to figure out new paths forward and rapidly find alternatives as business conditions change.  There are several use cases to increase the use of digital to focus on existing buyers:

Account-Based Marketing (ABM) has never been more important.  It is a superior way to coordinate the efforts of sales, digital marketing and service to meet the information and relationship needs of the full set of stakeholders, influencers and decision-makers in current accounts.  ABM can be set up in the basic form in a matter of weeks and then can expand and grow. When the economy improves it can take on the added task of improving prospecting and new customer acquisition.

Digital customer insights and analytics become essential when the routine ways of monitoring a category through face-to-face interactions among industry ecosystem participants break down.  Consider opening up an industry “war room” to buyers who can join virtually or receive insights through an email or online feed. Enable the war room with social listening, digital surveys, scouring the internet for news and monitoring key data sources.  Once the current crisis is over the war room can become a source of insights for innovation or a value-added service that can build a competitive advantage.

Direct Ecommerce may be the only way to keep the parts, accessories and supplies flowing that keep customers in business.  For service providers, it may take the form of shifting in-person services to digital channels.  Barriers put up by intermediaries such as agents, distributors, and systems integrators can prevent suppliers from undertaking commerce directly with their customers.  In times of crisis, these barriers will come down; enabling both supplier and customer to sustain a revenue stream while establishing a direct connection that will be very valuable, and hard to turn off, when conditions improve.

Digital Experience Innovation:

Most mid-size and large corporate customers have a built-in divide between the purchasing department and the user of the supplier’s goods and services.  In situations like the pandemic, operations become more siloed and day-to-day connections between the buyer, supplier and user can fray. Users can feel isolated and unserved.  Digital experience innovation plays a valuable role by meeting the needs of the user around the clock with less human intervention from the purchasing team or the supplier. The use cases for user support span the entire customer experience. They include:

Virtual Technical Support can be the lifeblood for corporate users struggling to find new ways of working and encountering new or unexpected bottlenecks as they try to patch together approaches to keep doing their jobs. B2B suppliers should consider ways to open up their expertise online.  Can training guides, specification sheets, and other materials intended for the technical support team be made available to customers online? How about setting up a Virtual Technical Support SWAT team that can swoop in after an initial online meeting and use collaboration tools to solve complicated problems (systems integration challenges, supply chain workarounds, etc.) more quickly than normal? The service may be essential during the pandemic but could save travel and speed problem resolution when times return to normal.  Collecting data on problems and their resolution can later enable AI-driven systems to automate the service in the future.

Online Learning becomes a necessity when there is no readily available source for corporate users to learn how to work with new components, become familiar with a crucial application, or manage a novel service because a supply chain disruption changed their normal routine. Avoid becoming entangled in long lead times to develop a new curriculum by setting up an online listening function to understand what challenges customers are facing. Then, empower sprint teams to create videos and audio-assisted documents to fill the need.  The production flaws will be forgiven in a time when help will be so appreciated.  Later on, the content can improve the larger curriculum and responsive listening can inform technical support and solution innovation.

A Digital Bulletin Board is an excellent and inexpensive way to keep customers informed of what’s going on from a supplier and industry point of view.  It can span multiple topics from immediate steps to mitigate health challenges, to information about shortages or substitute offers to information about how others in the industry are coping with important challenges.  It can be a tool for employees to stay informed as well as customers. At a time when many in an industry are looking inward, it can elevate the presence of the supplier within the customer as a source of information and expertise and provide a platform for continued use once the pandemic has receded.

“Digital marketing and selling, digital experience innovation and digital operating model renovation stand out as three digital transformation shifts that leaders can use to sustain their business as much as possible during this crisis as well as to accelerate customer demand once the economy rebounds.”

Digital Operating Model Renovation:

Many of the world’s companies may be heading for a cash crunch and resource imbalances over the next few months. Now may not be the time for thinking about how the operating model can be redesigned, pursue new customers, or enter new markets.  It is time to consider important, and significant moves to improve the effectiveness and efficiency of the business in ways that will be sustainable for the next few years.

Subscription Revenue Models provide a more sustainable revenue stream in times of uncertainty and in normal times.  They also lower the initial outlay customers must make for important purchases. A shift that can be extremely valuable for cash conserving customers.  There is usually a huge timing hurdle to overcome when converting transactional purchases to subscriptions because large initial revenues must be given up by the supplier in favor of a revenue stream that is spread over months or years.  This period of economic pause may be an ideal time to move to subscription because demand is already depressed, interest rates are low, and investors may be willing to endorse any move that sustains revenue.  The long-term benefits will be substantial, and the normal short-term barriers may be easier to overcome.

Cost to Serve Reconfiguration is a topic, that although very sensitive, cannot be overlooked. In normal times it includes thinking through how automating processes or investing in new digital platforms can reduce labor costs and generate bottom-line savings.  However, this is not the time to install major new systems or make uncertain employees fear for their jobs even more than they already do.  It is the time to collect data, measure, and evaluate whether the new selling, marketing, technical support, online education and digital communication approaches can be optimized and scaled after the crisis has subsided to lower cost to serve, boost employee work-life balance and improve customer service.  Treating the crisis as a series of pilots and experiences requires collecting data and measuring impact. The benefits for ongoing operations can be as profound as the short-term gains these changes produce.

Agile Process Redesign is at the heart of going faster and incorporating customers into the design process for many organizations.  The importance of quickly bringing new solutions to market or rapidly adapting current solutions has been made abundantly clear in the past several weeks.   Most corporate leaders have dramatically stepped up their planning but are struggling to accelerate the pace of the work that actually gets done. This is an ideal time to introduce agile teaming methods to the workforce.  There is no shortage of projects that need rapid attention, the case for change is apparent to employees and these methods can be deployed quickly with fairly low investment.  Agile methods have numerous additional benefits in driving leadership accountability, clarifying project status and ensuring that projects remain customer-focused even when moving rapidly.  The payoff is immediate and the benefits for the organization when things improve are substantial.

By Fred Geyer (Prophet) and Joerg Niessing (INSEAD), authors of the forthcoming book The Definitive Guide to B2B Digital Transformation. 

Watch this video to learn more.

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FINAL THOUGHTS

The nine digital shifts described in this article are a starting point for thinking through moves to make to sustain B2B businesses in an unprecedented time while laying the groundwork for future success when this crisis recedes.  We have tried to be pragmatic by recommending moves that can be implemented in the short term and will be valuable to customers, employees and the business for the future. This is not the time to wait.  Leaders who act now can strengthen their options and improve their chances for success.

If you need help figuring out what path to take now, in the next 6-8 months, or beyond, please don’t hesitate to reach out. We’re happy to have a conversation. Also, if you have any questions you’d like answered by our experts, drop them into the comments below or reach out directly here.

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Webinar Replay: The 2021 State of Digital Transformation (Asia Edition)

Some firms just want to become more digital at what they do. Others want to transform their entire business.

57 min

Omar Akhtar, Senior Analyst and Research Director at Altimeter, Chan Suh, Chief Growth Officer at Prophet, and Jacqueline Alexis Thng, Partner and ASEAN Lead at Prophet, present key takeaways from Altimeter, a Prophet company’s flagship report, The State of Digital Transformation – which surveyed nearly 600 executives from the U.S., Europe and China.

Our expert speakers discuss key trends in transformation, as well as how companies in China approach digital transformation differently compared to other countries, providing important insights for businesses in Asia.

If you’d like to learn more about Prophet’s approach to digital transformation, get in touch today.

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The Healthcare Industry in 2022: What’s Ahead?

Labor shortages aren’t improving, virtual care becomes old news, and the behavioral health boom continues.

Will 2022 be the year when the new normal finally kicks in? Will digital transformation in healthcare pick up steam? Who will acquire whom? Will the pandemic finally be behind us or will new variants keep it front and center?

After several tumultuous years in a row, we expect 2022 will bring plenty more disruption, much of it driven by the usual suspects of rising consumer and patient expectations, ever-advancing technology and intensifying perennial pressure to reduce costs and increase access. Per tradition, here are our annual healthcare “hot takes” as we think about the year ahead.

We’ll Stop Talking About Virtual Care

Just as cable television and streaming became TV, mobile phones became phones, and  online retail and e-commerce reverted to being plain old retail, virtual care will become just “care.” Increasingly, patients don’t differentiate between telehealth from in-person visits – it’s all just one connected experience of care.

This is partially a semantic development but highlights a critical – and unstoppable – trend. Some residual discussion of omnichannel care will persist, as health systems and providers continue to adjust. But final pockets of resistance will fall; even specialties like dermatology and pediatrics will expand their use of virtual (whoops – you see how hard it will be to stop using that word, but we’re convinced it will happen!).

Labor Shortages Won’t Be Solved with More Healthcare Workers

The talent gap and worker shortages will be recognized as unsolvable – at least with current strategies. There are simply not enough doctors, nurses and paraprofessionals around to fill all the open slots. The same is true of data scientists, experience designers, financial analysts and all the other skill sets that are in huge demand within healthcare and just about every other sector.

Rising wages (especially for nurses) highlight how talent shortages can’t be addressed by simply throwing money at them. According to Mercer, 900,000 nurses are expected to permanently exit the healthcare workforce, causing 29 states to face a shortfall of registered nurses in the next five years.

Seeing that they can no longer simply try to win over more nursing students, healthcare orgs need to embrace new talent strategies. They must find new types of workers they can train to play specific roles. Think engineers-in-training to map out new care pathways or data scientists and AI experts designing diagnostic tools that replace nurses’ intake forms and handle initial reviews on medical images.

Kaiser’s foray into medical education suggests how different the thinking will have to become, though, of course, such capital-intensive approaches won’t be an option for every health system. Digital solutions and smarter workflows that replace steps in care delivery, rather than simply automating routine steps, are also key. It’s a matter of succeeding with fewer workers, an operating model, workforce and tech portfolio that has the flexibility and scalability to deal with future growth.

Home Care and Diagnostics Get More Active and Outcome-Based

Post-Theranos and uBiome, the diagnostics boom continues, but we get no bonus points for predicting that growth accelerates in 2022. After all, diagnostic startups had raised $5.4 billion in 2020 – up 19% from the year before, according to Pitchbook. The prevalence of at-home COVID testing will pave the way for many new classes of tests – from fertility and prenatal to cancer and heart conditions, to stress and hormonal issues.

More significantly, we’ll see an important shift from monitoring to active treatment. For chronic care conditions, patients will become equipped with tools they need to solve common issues on their own and at home. For instance, remote patient monitoring tools will provide automatic alerts to patients (e.g., to adjust medications) and providers (e.g., to trigger nurse visits) when patient conditions deteriorate.

“There’s a device for that” will become a strategic default, as treatments are embedded in – or at least accessible from – monitoring devices.

Behavioral Health Evolves to Be A Standard Workforce Benefit

Employee demand for mental health and wellness will inspire large employers to greatly expand access beyond EAPs and therapy. This evolved employee expectation also prompts HealthTech firms to innovate with a fresh wave of tools and solutions available for providers and patients that seek to identify and address behavioral health challenges before they’re exacerbated, including solutions like Sanvello, an app that uses clinical techniques to help dial down the symptoms of stress, anxiety, and depression.

This momentum is another example of the confluence of trends in the post-COVID landscape; everyone is more aware of the need for better behavioral health monitoring and treatments. And employers navigating the Great Resignation must do everything they can to keep employees.

Pharma Takes the Lead in the Drive to Data Unification

Data unification across healthcare has been an “imagine if” proposition – and a huge barrier to innovation. This year, pharma, with its substantial capital and ability to disrupt at scale, makes a major bet to break through the traditional data hoarding problem.

Pharmaceuticals are primarily motivated by the opportunity to use real-world data (RWD) to inform and streamline drug delivery and development. Specifically, they will find new ways to securely blend and anonymize data from EHRs, home care settings, mobile devices, social media and other sources.

Their success will prompt other players – providers, payers, tech platforms, consumer apps and devices – to establish new standards for sharing and using data. For example, Cerner launched Cerner Enviza to sell EMR data in a secure way while protecting patient identities. Ciox merged with Datavant to help accelerate token adoption and increase usage of RWD and real-world evidence.

Bonus prediction: we might see some regulation shifts to give consumers unprecedented degrees of data control, portability and security. Further good news: all the investments and work on the countless data monetization initiatives underway across the industry are not lost but provide a foundation for future success.

ESG Goes From Feel Good Topic to Uncomfortable Issue in Healthcare

In 2020, there were healthcare heroes everywhere and the industry’s pandemic-fighting efforts were rightly applauded. There was also much discussion about access to care and health equity. In 2022, the media, government and public will once again ask these challenging questions of healthcare organizations. Beyond the normal inquiries into the high cost of care, senior executives will be asked why equity and access have not improved more in the wake of the pandemic and how their organization’s purpose statements play out in day-to-day operations.

Increasing health equity is extremely difficult in a world of thin margins; start-ups will deliver some innovation in the public health space, but it’s clear that the largest incumbents will be challenged to “walk the walk” on health equity in ways that match the considerable amount of talk about it.

Similarly, healthcare’s climate impacts will be increasingly in the spotlight. The industry’s carbon emissions represent about 5% of worldwide totals, according to the New York Times. C-suites and boards will make stronger commitments and clearer plans. Public companies will face especially sharp pressure, as they face up to the reality of ESG ratings and the risk of stock price hits if they are excluded from rapidly expanding ESG index funds.

“2022 will bring plenty more disruption, much of it driven by the usual suspects of rising consumer and patient expectations, ever-advancing technology and intensifying perennial pressure to reduce costs and increase access.”

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FINAL THOUGHTS

As much change as healthcare has seen in the last few years, many organizations remain focused on the pre-pandemic goals of designing better patient experiences, streamlining care delivery and using data and tech more effectively. Those perennial issues are reflected in our 2022 predictions above and we’re willing to bet they’ll underpin our 2023 outlook as well.

Contact our healthcare team today. We’d love to talk about the transformation opportunities at your organization.

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Brand Migration in M&A: Seven Factors for Success

Amid record merger activity, companies continue to underestimate the complexity of integrating brands.

Global M&A activities have seen record levels this past year and are expected to grow even further in 2022. With this, Post Merger Integration (PMI) – the bringing together of two organizations, each with its own processes, structure, culture, and management – will be high on many organizations’ strategic agendas.

PMI is profoundly challenging and one of the most cited reasons for M&A failure is poor PMI. It demands massive executive attention and resources, both in terms of financial investments and people.

While most organizations have established robust processes for the integration of IT systems, HR policies, financial reporting and other vital business model elements, brand migration is a frequently underestimated factor in the PMI equation. And the results of this neglect could be devastating. Switching from a familiar brand to a new one is massively disrupting to customers, business partners, employees, and anyone else who has enjoyed positive experiences with a brand bound to be retired and replaced by a new one.

“PMI is profoundly challenging and one of the most cited reasons for M&A failure.”

Over the last three decades, Prophet has supported numerous organizations with post-merger brand integration. From this work, our teams have learned what works and what doesn’t. While every PMI scenario is unique and requires a bespoke approach, we’ve found that there are common ground rules regardless of industry, region, or market dynamics.

Before diving into the factors of successful brand migration, let’s start with a few of the most common mistakes made post-merger. They are:

  • Leaving brand migration to the marketing or comms teams
  • Positioning brand migration as a mere re-naming exercise
  • Waiting on brand migration planning until after deal closing
  • Developing the brand migration plan without detailed customer input
  • Defining a fixed end date for the brand migration without understanding the full range of implications

Make only one of the mistakes above, and brand migration will end in a disaster.

The Most Important Objectives and Key Success Factors

Successful brand migration starts with defining appropriate objectives. On top of company-specific objectives, these three generic brand migration objectives have proven to be very valuable for steering all related activities in the right direction.

Brand migration must:

  • Ensure the facilitation and enablement of the synergies expected from the merger
  • Unlock incremental growth
  • Happen in a way that avoids losing important customers, business partners or employees

After the appropriate objectives are established, it’s time to move forward with the seven key factors for successful brand migration. They are:

1. Prioritize the Brand Topic Early On

Make brand considerations a fixed topic from the beginning to the end of the M&A process, this includes:

  • Using brand fit already as a filter criterion during target screening
  • Understanding employee and customer concerns before moving on
  • Assessing brand equities and the ability to migrate during due diligence

2. Define Objectives and a Roadmap

Develop a brand migration plan early on, during or right after the due diligence. Define and agree on the target picture for the post-integration brand portfolio. Be sure to include that in the letter of intent as well as later in the contract.

3. Connect the PMI Workstreams of Brand Migration with HR and Culture

Marry the PMI’s brand migration project stream to the culture and people stream. Brand migration is nothing short of a business transformation for the acquired organization. Brand and culture are inseparable, and in terms of organizational migration need to be covered in conjunction.

4. Utilize Existing Values

Systematically transfer valuable equities of the brand that will be retired onto the surviving brand to enrich the customer experience. Make the final switch from the old to the new brand only after this has been accomplished.

5. Make the Necessary Investment

Before making the switch from the old to the new brand, invest sufficient time and resources to demonstrate the benefits of brand migration to all employees affected by it. Resolve any concerns they may have so they feel enabled and motivated to tell the migration story.

6. Define the KPIs

Define and track brand migration KPIs throughout the process. Make progression from one phase to the next dependent on hitting pre-defined KPI thresholds (e.g., the awareness level of the continued brand with customers of the to-be retired brand).

7. Go the Distance

Do not stop halfway. Dual branding can be a necessary interim step on the journey to full integration. It is tempting to get stuck with dual branding because it creates the least resistance internally and externally. But rarely is it the most effective long-term solution since it prevents the stronger of the two brands from unfolding its full potential.

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Successful brand migration in M&A can have a disproportionate bearing on protecting and creating value for the entire integration. Taking into consideration these seven factors will create a solid foundation for effecting that impact.

Does your M&A approach require a new playbook? Our M&A strategy consultants can help you to drive growth while minimizing risk, get in touch.

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How Open Innovation is Driving the Next Era of Growth for Singapore

How the government is fostering a deep tech ecosystem, designed to encourage open innovation.

Something surprising happened amidst the gloom and doom in the early months of the Covid-19 crisis — companies began to come together to collaborate on an unprecedented level, putting the ability to create value before profits.

To fully reap the rewards from innovation, companies need to prepare for the transformational challenge ahead. Successful innovation often requires operational and structural changes to how business is done. Such changes are difficult for any employee, team or even business unit to undertake. Smart companies, however, will seize this opportunity to rethink their innovation infrastructure.

To reinforce this effort, the Singapore government launched various initiatives to support technology-focused start-ups – one of these initiatives is SGInnovate, a private organization wholly owned by the Singapore government to develop a deep tech ecosystem in the country.

Recently, Jacqueline Alexis Thng, partner at Prophet, and Dr. Lim Jui, CEO of SGInnovate, held a webinar to discuss the importance of open innovation for businesses today and share their predictions on what the future holds. Here, we share some of those key insights:

How is SGInnovate working to create an ecosystem where innovation can thrive?

Dr. Lim Jui: SGInnovate is facilitating the building of a deep tech ecosystem in Singapore by adopting a triple-helix approach that consists of considerations of investment, community building and talent.

On the investment front, SGInnovate is currently Singapore’s only deep tech career and skills development platform and this platform allows us the opportunity to notice and invest in deep tech companies at their earliest formation. To date, we have about 80 portfolio companies and have catalyzed over $700 million of follow-on investments.

On the talent front, we support the development of entrepreneurial scientists by partnering with institutions to enhance beneficial collaboration at the earliest stage. We also hold regular events to help entrepreneurial scientists connect with companies to raise awareness of their new technologies and then take these ideas further.

We hope to build a community that connects every party, including not only deep tech scientists, inventors and entrepreneurs, but also regulators, investors, vendors and manufacturers, helping them to push their innovation agenda.

Why is adopting an open innovation approach important?

Jacqueline Alexis Thng: Open innovation is a business model that incorporates traditional corporate capabilities with external talents and innovations. This business model challenges the traditional silo mentality where companies have conventionally upheld secrecy around R&D as a means to protect their assets. It not only allows for businesses to find new ways to solve pressing problems but through unlocking new relationships with partners with complementary skills, it also offers the potential for future collaboration.

“To fully reap the rewards from innovation, companies need to prepare for the transformational challenge ahead.”

Siemens, for instance, opened up its Additive Manufacturing Network to anyone needing help in medical device design. Similarly, Ford worked with the United Auto Workers, GE Healthcare and 3M to build ventilators. This recent burst of collaboration reminds us of the massive potential that open innovation brings, whether you’re in a crisis or not.

Dr. Lim Jui: These initiatives are often the tip of the iceberg. When it comes to innovation, the challenge faced by many companies in recent years has been the lack of knowledge, skills and best practice. Organizations such as SGInnovate thus help to foster these networks of collaboration through open innovation, building a community that involves an active free flow of ideas and best practices.

We encourage established companies to do what we call ‘reverse pitching’. While normally it is entrepreneurs who pitch to investors and companies for funds, at SGInnovate, we also encourage companies to review innovations from a different perceptive by inviting them to pitch to entrepreneurs.

Where is the future of innovation headed?

 Jacqueline Alexis Thng: Accelerated by COVID-19, digitalization and connectivity has become more essential than ever. We’ve seen a shift in consumer behaviors towards more personalized, contactless and immersive experiences enabled by digital technologies, from healthcare, e-commerce to entertainment.

To respond to these future trends, the Singapore government is said to invest SG$24 billion ($18.1 billion) over the next three years to help local businesses build “deep, future-ready” capabilities for innovation and transformation. They will also enhance programs to support innovation efforts especially in areas such as MedTech and food manufacturing that has seen growing demand across Asean members.

What are SGInnovate’s top two priorities for 2022?  

Dr. Lim Jui: Since our founding in 2017, we have been very invested in digital deep tech, which enabled us to be an early investor in areas such as AI, cybersecurity, transportation tech and so on. However, starting from last year, we moved more to digital health, acting as an advocate for areas in drugs, diagnostics and agri-food that don’t necessarily receive the attention they deserve from private companies.

1. Medicare

Medicare has always been a key focus for SGInnovate because of our ability to work closely with researchers and institutions at an early stage of innovation. With Covid-19, many previously under-addressed needs have been unearthed.

Telemedicine solutions, for instance, are gaining traction in SEA, as consumers now wish to meet their medical needs remotely due to their fear of the virus. The pandemic also exposed the fragile public healthcare system and the lack of healthcare professionals. As a result, there has been an increasing demand for telemedicine to fill this gap in healthcare.

For example, WhiteCoat, Singapore’s leading telemedicine platform for on-demand remote healthcare services, has been backed by SGInnovate to launch a mobile application that connects consumers to an extensive and curated network of medical practitioners and allied healthcare professionals for a best-in-class telehealth experience.

We expect the growth of digital healthcare solutions to continue to catch steam as Covid-19 has made the subject matter a top priority for consumers and institutions alike.

2. Agri-food

Agri-food tech is our spearhead to the sustainability space. We look at innovation in food as a means to tackle climate change because the methane impact from eating meat is resulting in such sizable carbon emissions. In Singapore, where we don’t have farms or livestock, our focus could be on things that we already know, such as how to manipulate certain wavelengths of light to accelerate plant growth.

Covid-19 has also greatly accelerated the growth of this industry. A silver lining of the pandemic is that we have successfully unified all research power in the fight against a common enemy, which gave birth to solutions like the vaccine we have today. In the same way, global scientific intelligence has also come together in the fight against climate change. That is why at SGInnovate, the ability to look externally and collaborate with global research power is an important strength we harbor to help drive innovation within this space.

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Open innovation is a more profitable way to innovate because it can reduce costs, accelerate time to market, increase differentiation in the market and create new revenue streams for the company. With COVID-19, businesses experienced an opportunity to innovate through the crisis and now it’s about how they can continue to fully embrace open innovation beyond. Companies must consider how they can make these altered ways of approaching innovation truly stick in order to unlock speed, creativity and business growth.

Are you interested in increasing your innovation capacity? Prophet’s Experience & Innovation experts can help you to underpin a superior approach to innovation. Get in touch here.

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Webinar Replay: The 2021 State of Digital Transformation

Average companies start transformations to “catch up.” The most successful firms? They want innovation.

56 min

Omar Akhtar, Senior Analyst and Research Director at Altimeter, and Chan Suh, Chief Growth Officer at Prophet, present the biggest takeaways from Altimeter, a Prophet company’s flagship report, The State of Digital Transformation – which surveyed nearly 600 executives from the U.S., Europe and China. They discuss key trends in transformation, including where leading companies are expanding their digital capabilities, what investments they are making and common roadblocks they encounter along the way.

If you’d like to learn more about Prophet’s approach to digital transformation, get in touch today.

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Unlock Growth with Digital Convergence

Businesses that embrace convergence use digital to work differently, solve problems and find growth.

Digital transformation is nothing new. Companies we talk to every day have been trudging along on digital transformation journeys for close to 20 years. Despite spending trillions to add newer, more sophisticated digital initiatives to their agendas (with more projected over the next five years), few have been able to grow the way they hoped. A recent survey from the Harvard Business Review reports that only 20% of executives believe their transformation efforts have been effective in any way.

It’s not that all the steps they’ve taken have been misguided. Far from it. Many companies have made significant strides to optimize their existing businesses by using new digital tools and operations, cutting costs and launching new products along the way. But, as business environments change and customers along with them, what we’re finding is that simply adding new tech capabilities, data sets or rich omnichannel experiences without changing the way the business works will limit your company’s growth potential.

Moving Past the “Add-On” Digital Transformation Approach

The evidence we’ve collected by observing clients and conducting field research shows that growth must be an intentional goal of transformation, and achieving it requires businesses to move beyond the “add-on” approach of digital transformation. The add-on approach is a consequence of being overly preoccupied with a typical metric of many digital transformations – digital maturity. Digital maturity is measured by the number of tactics used to optimize the existing business and misses the point: long-term growth.  Digital maturity alone will not unlock what Prophet calls “uncommon growth”– the type of growth that is purposeful, transformational and sustainable over time.

“Digital maturity alone will not unlock what Prophet calls ‘uncommon growth’– the type of growth that is purposeful, transformational and sustainable over time.”

To unlock growth with digital transformation, firms must build on digital maturity to achieve convergence. Convergence is the approach of orchestrating digital transformation efforts around a singular purpose that has been reimagined for today’s customers and employees. Businesses that embrace convergence don’t just add new digital capabilities to solve existing problems, they use existing digital capabilities to work differently, solve new problems and deliver growth.

The progress of individual workstreams, specific digital projects and initiatives, and the building of shiny new capabilities is a known challenge. The more intractable part is getting people in your business to embrace a renewed purpose with digital tools, infuse new rituals into the DNA of the company –and then structure the workstreams that serve customers and unlock growth.  Successful transformations necessitate holistic, if more complicated point of view.

Without converging on a customer-and employee-led purpose, digital transformations are doomed. A business’ purpose must be central to this transformation because it defines the role the business plays in customers’ lives, the meaning of the work that its employees do and the impact that it has on society. As environments change, the purpose of the business needs to be continually re-examined to ensure its continued relevance. Global digital acceleration, sparked by mobile and boosted by the pandemic, is rapidly changing the expectations and behaviors of customers and employees – now the purpose needs to change along with it.

Convergent enterprises are the companies that understand the power of ongoing transformation. They have adopted a mindset that allows them to look beyond the add-on approach to digital maturity and pursue initiatives converged on a renewed purpose that incorporates customer and employee capabilities.

As a first step towards digital convergence, organizations must embrace the challenge of defining a renewed purpose. It doesn’t mean losing your authentic brand and value proposition. Rather it demands reimagining the business through a new lens, integrating digital capabilities throughout, and scaling the outcomes. And that must be done with creativity, empathy and action, not panic or cynicism.

How Best Buy is Rewiring Itself to Go Beyond Retail for Growth

Let’s take Best Buy, a Prophet client, as an example. Over 10 years ago, Best Buy and other big-box retailers began their digital transformation journeys with a determined focus on omnichannel retailing and effective e-commerce. As it moved toward streamlined online experiences, so did all its competitors. Instead of just pressing the “more digital commerce” button, Best Buy leadership realized that to find uncommon growth, they would need to start with a renewed purpose and converge digital capabilities around it. Reinvention had to be based not on how consumers wanted to shop at Best Buy but on why they were there in the first place.

That meant questioning everything from brand purpose to organizational structure to customer experience. By re-centering itself around helping customers make all of their technology work together – not just sell them more stuff – they located an addressable problem that was way bigger than the market they originally sought to capture. They extended their subscription services, installation packages and extended warrantee offerings to the consumer while reimagining their square footage as experiential media opportunities for their manufacturer partners.

By expanding the borders of its value proposition and building a moat around proprietary digital tools, Best Buy continues to build a convergent enterprise limited only by its imagination and poised for sustainable growth. The results so far are astonishing. In its latest quarterly results, revenues have steadily increased 24% over the last five years.

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Increasingly, leaders are thinking more like Best Buy, recognizing that convergence means committing to a purpose that serves the whole customer, even if that means challenging strategic direction and corporate priorities. They know success is as dependent on human-centered elements, such as organization design, culture, leadership, and operating models, as it is on technology initiatives. In fact, 90% say COVID-19 has forced them to re-evaluate the human component of digital. We think that’s just the beginning.

Ready to learn how to become a convergent enterprise? Read this blog post.  

Prophet is a convergence accelerator and purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments, and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.

Get in touch today if you’d like to learn how to bring digital convergence moves to grow your organization.

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Five Moves to Become a Convergent Enterprise

Make sure your business purpose is still relevant, and assess the change readiness of your organization.

Digital transformations that unlock uncommon growth are special. They require more than just adding on new digital capabilities or deploying new experiences, or even fielding new business models. Rather, organizations must work hard to converge these efforts around a singular purpose that is relevant to how customers live and work today – and find ways to satisfy their unmet needs.

1. Re-focus The Operating Model

Everything from talent, organization design, processes, interactions and tools should support the customer or employee experience that the company is trying to achieve. This means converging KPIs and measuring success in a way that ties the organization together in a shared commitment to customer outcomes.

2. Solve The Customer’s Actual Problem

Both internal and external-facing initiatives must embrace the evolved capabilities and new behaviors that customers and employees have today. The needs that your business was originally designed to address are likely being re-shaped by new capabilities that your customers are using. By pursuing new businesses at the intersection of what customers want and what they can already do with digital, firms will be able to address unmet needs in underexplored growth territories.

3. Reskill The Organization From the Top-Down

Investment in training for everyone from executive leadership to support staff will drive an enterprise-wide understanding of the software, tech and agile processes on which the business is built. Successful transformations are led by CEOs and executed teams who can connect strategy to implementation; orchestrate between new processes, new data and digital tools; and create impact.

4. Upgrade Your Go-to-Market Capabilities

Treat data as a renewable resource. Leverage marketing and sales functions to get closer to the customer and use always-on insights to enable a loyalty engine that not only drives preferences and new value props but also helps organizations anticipate shifts in demand.

5. Create Incentives for Innovation

Developing incentives for innovation throughout the company means rewarding test-and-learn, experimentation and calculated risk while tweaking funding models and time horizons to ensure that worthy investments are given a fair chance to succeed. No more short-termism or single-horizon thinking.

“Organizations must work hard to converge these efforts around a singular purpose that is relevant to how customers live and work today – and find ways to satisfy their needs.”

Getting Started:

Becoming a convergent enterprise is not quick or easy. We don’t expect every business will attempt it all at once. But, regardless of where you are in your transformation journey, we believe that every company has the ability to achieve convergence. The only requirement is a commitment to renewing purpose, shifting mindsets and aligning your priorities and pursuits. That starts with introspection.

Renewing your company’s purpose is not unique to digital transformation but because the digital environment has fundamentally transformed the way we live, it is a prerequisite for driving successful convergence.

Four Steps To Get Started

  1. Assess the relevance of the business purpose to today’s customers, employees and stakeholders. 
    Begin by asking how context, competition and new capabilities have impacted your purpose. Has any part of it become outdated?
  2. Map your existing digital transformation activities to convergent moves.
    Identify the gaps between the initiatives you’ve already invested in and those you should be investing in, to balance the portfolio of moves that are right for your organization.
  3. Measure the change readiness of your organization. 
    Understand how proposed shifts in priorities will impact decision-making and ways of working – establish a team to help lead the transition.
  4. Develop the convergence agenda to connect the convergent moves to an updated purpose.
    Use your renewed sense of purpose to prioritize the orchestration of effort.

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FINAL THOUGHTS

In the face of digital acceleration, customer and organizational needs keep changing. New technology regularly reconfigures both supply and demand – we know it as ‘disruption.’ Successful organizations, recognizing this need for constant reimagination and integration of new capabilities, engage in ongoing digital transformation. We call it convergence. And it’s the next phase of your transformation journey.

Prophet is a convergence accelerator and a purpose-led transformation consultancy that will help you reimagine your firm, integrate and scale digital investments, and drive real, defensible growth. We believe that to accelerate convergence we take your existing assets – such as data, brand, culture, business models – reimagine them for today’s customers and employees and look for new ways to integrate capabilities and talent with a reimagined sense of purpose. Then, we drive towards scale.

Get in touch today if you’d like to learn how to bring convergence moves to grow your organization.

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REPORT

The 2021 State of Digital Transformation

Companies with successful transformations prioritize data management, innovation and customer experience.

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In this year’s State of Digital Transformation report, our goal is to identify the key differences between the businesses who succeeded at digital transformation, and those who were still struggling. We surveyed 587 executives from the US, Europe and China, across a range of industries to highlight not only their current digital capabilities but the key investments and choices they made that got them to where they are. By separating the responses of high performers and average performers, we identified the key characteristics of companies that successfully met their transformation goals.

This report serves as a benchmark for what digital maturity looks like in 2021 and charts a path forward for businesses that are looking to thrive in the next wave of digital transformation initiatives.

Key findings include:

  • Growth and innovation were the top transformation goals for top performers, while average performers cited modernization and efficiency as their top goals.
  • The majority of companies used a holistic, or coordinated simultaneous transformation approach to transform the organization, rather than transforming departments in isolation, or sequentially.
  • COVID-19 reduced budgets and resources for transformation, but it did not slow transformation programs. In fact for high performers, it accelerated transformation efforts.
  • Companies with successful transformations were much more likely to prioritize data management, innovation, customer experience and employee experience initiatives, compared to average companies.
  • Transformations led by the CEO are more successful than those led by other positions
  • Digitally mature companies are looking to invest in leveraging data, optimizing customer and employee experiences, and building external partnerships and networks to prepare for the next phase of transformation.

Download the full report below to learn more.

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VIDEO

Fintech Frontier: Michael Dritsas on Meeting Customers Where They’re At

The CEO of Vlot, an insurtech company, talks about the need for seamless financial checkups.

15 min

Summary

Fintech Frontier: Prophet Talks Disruption is a series of interviews with leading fintech disruptors. In this episode, Prophet Partner Tosson El Noshokaty chats with Michael Dritsas, CEO of Vlot. Vlot is an insurtech company that partners with insurers, corporations and banks to deliver seamless financial checkups (white label risk analysis and coverage solutions) so customers and B2B organizations can become more financially responsible.

Michael discusses how Vlot is taking a fiercely customer-centric, bottom-up approach to insurance – providing data-rich insights to customers that fit into their lifestyles and goals. Watch the full interview to learn how Vlot is building enduring relationships with customers on their digital transformation journeys.

About Fintech Frontier: Prophet Talks Disruption

The Financial services industry is evolving rapidly with important shifts in market dynamics & customer expectations.  Prophet’s fintech interview series FinTech Frontier: Prophet Talks Disruption brings you one-on-one interviews with the thought leaders and innovators transforming financial services. Each episode showcases a FinTech leader story that is revolutionizing banking, payments, insurance, and all other areas disrupting our industry.

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Pinduoduo’s Purpose-Led Agri-Tech Innovation: A Conversation with Xin Yi Lim

This tech company focuses on farmer productivity while reducing the environmental footprint of farming.

E-commerce continues to surge globally, in part accelerated by the COVID-19 pandemic, and in many ways, China leads the charge. While some Chinese companies, such as Alibaba and Meituan, have focused on building ecosystems and “super apps,” Pinduoduo’s approach differs. With origins in agriculture and social commerce, Pinduoduo has risen to the top through an innovative business model that is set on creating value for both the merchant and the consumer. In 2020, Pinduoduo was ranked third by GMV of China’s e-commerce platforms, with a total GMV of $242 billion USD.

Prophet’s Tom Zhang, a senior engagement manager, had the chance to sit down with Xin Yi Lim, Pinduoduo’s executive director of sustainability and agricultural impact, to discuss Pinduoduo’s investment in agri-tech, its view on the consumer-to-manufacturer (C2M) model and the company’s ongoing purpose-led innovation initiatives.

Xin Yi Lim

Pinduoduo

Executive Director of Sustainability and Agricultural Impact

As Pinduoduo’s executive director of sustainability and agricultural impact, Xin Yi Lim is responsible for Pinduoduo’s international corporate strategy efforts and innovation in sustainability and agri-tech. Before joining Pinduoduo in late 2018, she worked for Singapore’s sovereign wealth fund, GIC, in both its Singapore and New York offices as a technology and media analyst in the Public Equities division. Xin Yi holds a bachelor’s degree from the University of Oxford and a master’s degree from Harvard University.

Can you tell us a bit more about your background? What brought you to Pinduoduo, and what is your current role there?

I’ve spent most of my working life in investment, covering technology, the internet and media. As a financial analyst and an outsider, I was familiar with Chinese e-commerce but very much interested in learning more.

I joined Pinduoduo in late 2018. I’m part of the broader strategy and investment team, but my title is quite unusual – executive director of sustainability and agricultural impact. It’s very hard to find anybody else who has those two things in one title, which speaks to how Pinduoduo sees agriculture. For us, it’s where we can have a huge impact in the social sphere, via poverty alleviation and job creation, and in the environmental sphere as well.

What is Pinduoduo’s ambition behind its continued focus on agriculture, even as the company has expanded into numerous other categories?

In the beginning, there was Pinduoduo and there was also Pinhaohuo (拼好货), which was focused solely on agricultural goods. We merged the two in 2016, and as a result, agriculture remained deeply rooted in our DNA. Even as we grew into selling other categories of goods, agriculture stayed at the forefront as a sector where we could have a large-scale impact and accelerate change.

As a technology company, we’re constantly thinking about how we can disseminate agricultural technologies to improve farmer productivity while reducing the environmental footprint of farming. By leveraging these technologies, customers can get the same product, or perhaps even one that is more nutritious, while reducing the environmental impact. Broadly, that’s how Pinduoduo thinks about agriculture, technology and sustainability.

As a platform, where can Pinduoduo have the biggest impact in the agricultural value chain?

The way agricultural products make their way to market – the distribution channel – has not yet been transformed as it has for other categories. We estimate only about 7% to 8% of the total dollar value of agricultural products transacted in a year is happening online.

That caught our attention because we know shifting online can unlock a lot of efficiencies in the supply chain. Through the Pinduoduo model, we are able to bring the produce directly from farmers to customers, cutting down on any unnecessary intermediaries in between. And by doing this, the farmer can earn more while the consumer can save more. It becomes a win-win for the producers and the consumers.

“As a technology company, we’re constantly thinking about how we can disseminate agricultural technologies to improve farmer productivity while reducing the environmental footprint of farming.”

The knock-on effect is also more prevalent now that the farmers are more plugged into the economy. This is because they have a direct sense of what their target consumers like. They can understand how consumers respond to certain pricing or packaging if there is stronger demand for large oranges versus small oranges or how demand changes throughout the year. We want to empower farmers so that they’re not just price-takers in the traditional distribution model, but instead, can be more actively involved in producing what consumers actually want. This is where we can add value and how we bring the C2M model to life.

Can you elaborate on how Pinduoduo incorporates the C2M model in its overall strategy?

In China, there is a very strong manufacturing base on the supply side. However, the Original Equipment Manufacturers (OEMs) often lack the expertise and insights to create distinctive brand identities and value propositions that connect with their consumers. Thus, we are coming up with new ways to enable domestic producers to leverage their own IP, understand consumer needs and create products and brands that resonate with the market.

Our New Brands Initiative, launched in late 2018, is one way we are bringing this to life. We have dedicated vertical specialists who work with manufacturers from each category, sharing emerging market and consumer trends with the goal of turning manufacturers from OEMs to Original Brand Manufacturers (OBMs). Based on these category trends as well as their own merchant data we provide via the platform, merchants are able to adjust their offerings accordingly and consider how to upgrade their marketing. That’s also where brand building begins. Brands can’t be everything to everyone, so by providing insights and narrowing the focus, C2M can help manufacturers develop their own value propositions and their own brands.

China has the benefit of having one of the highest levels of penetration of e-commerce. This speeds everything up, from product development to pricing to SKU assortment, by allowing manufacturers to get feedback in real-time.

Can you give a few examples of some of the initiatives Pinduoduo is undertaking in terms of innovation?

Pinduoduo is training a new generation of agri-entrepreneurs. In the past five years, we’ve trained one hundred thousand “new farmers,” a younger, more educated generation that is migrating back to their hometowns, and we’re committed to training one hundred thousand more. These are the ones who are managing the storefront, packaging, customer service and distribution and at the same time, they are also mobilizing the rest of their rural communities to join them in the digital economy. We bring business expertise via online and offline classes and then partner with institutions such as China Agricultural University to teach agricultural knowledge. Through these agri-entrepreneurs, we’re hoping to start improving the branding of agricultural goods in China, which is very undeveloped.

Our long-term goal is to bring in more upstream, purpose-led innovation. We’re in year two of hosting the Smart Agriculture Competition. We bring together global technology teams with backgrounds in AI, machine learning and plant science to compete against traditional, premium horticulture teams. We then put these teams in a smart greenhouse that they control remotely using IoT, monitoring the plants and making precise adjustments whenever needed. In last year’s competition, the AI teams produced three times as many strawberries and generated 76% higher ROI compared to the traditional teams. Not only was it very impressive to the farmers, but some of the technology experts also went on to work with the farmers after the competition. The Smart Agriculture Competition creates an opportunity to test the teams’ technologies on a bigger scale. At the same time, the farmers benefit from the efficiencies and see the real-world impact.

Pinduoduo has referred to itself as a “Costco+Disney” concept. Can you elaborate on what this means and how it guides Pinduoduo’s innovation and strategy?

The Costco+Disney concept ties in with Pinduoduo’s slogan: More Savings, More Fun (多实惠，多乐趣). The Costco part, “more savings,” comes from our early insight that we could get more value for money by aggregating demand. The Disney part, “more fun,” speaks to people’s desire for a social shopping experience.

We designed Pinduoduo to be very interactive. The app offers a social connection that helps users discover things more easily compared to the traditional e-commerce model, which is very individualistic. The “team purchase” model is a big part of the social element. Livestreaming serves as another interactive element, which helps build trust between consumers and merchants. It allows them to see how things are made, how it looks, which helps consumers feel closer to the producers, creating trust.

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We don’t want shopping to feel like a chore. We want it to be a fun part of your daily routine. Within the e-commerce industry, we’ve achieved one of the highest engagement rates in terms of monthly active users and daily active users. By emphasizing more savings and more fun, we’ve found a way for users to engage willingly and regularly.

Learn how your organization could drive innovation through a purpose-driven approach. Contact us today!

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The Four Digital and Innovation Trends Unlocking New Growth Opportunities in Southeast Asia

From digital healthcare to social commerce, new internet users are ready to embrace technology.

Over 40 million people in Southeast Asia (SEA) went online for the first time during the pandemic, bringing active Internet users in the region to 400 million [1], according to Google’s e-Conomy SEA 2020 report. This represents a 60% increase from 2015, and a 70% internet penetration rate of the region’s 580 million population, as well as a $100 billion worth of Internet economy.

In the past year, we have seen many new norms and many changed customer habits. To better understand the trends that have transformed the digital landscape in SEA and the implications for brands to maintain their relevance, we interviewed four key marketing and digital experts across the region.

Four Trends Shaping the Future of Digital and Innovation

1. Growth of Digital Healthcare

The pandemic exposed the fragile public healthcare system and scarcity of healthcare professionals for patients in underserved and rural areas. To fill this care gap, many are turning to telemedicine, increasing its demand. Two examples of the surge of telemedicine are Indonesian start-ups Alodokter and Halodoc, which link patients with physicians for online health consultations all from the comfort of their homes. These start-ups and many others have shown robust growth as citizens in remote, rural areas are becoming more aware of their need for quality healthcare and as governments begin to recognize telemedicine start-ups as an official care resource for citizens.

Looking more broadly, we expect the continued growth of digital healthcare solutions as health and wellness remains a top priority for customers, impacting their choices around self-care and their expectations towards their interactions with brands.

“The pandemic made us rethink the real part of our business – helping people get their health checked and making sure they were claiming right. And so, we realized that we need to enable all of our sellers to proactively reach out to people digitally.”  

– Ms. Jenn Villalobos

2. The Rise of Contactless and Digital Payments

Contactless became a new norm during the height of the pandemic. As a result, new, contactless services have seen substantial growth and adoption by major brands across SEA. For example, local food delivery companies such as GrabFood have evolved their services to better address customer needs, by giving customers the flexibility to schedule contactless delivery in advance.

Alongside contactless services, digital payments are expanding as customers increasingly forgo cash to avoid physical contact. This trend was accelerated when brands increased their implementation of cashless payments for their services. This led to non-cash transactions growing rapidly across the region. For example, GCash by Mynt and PayMaya by PLDT expanded to enable digital contactless payments in public taxis in the Philippines. In Vietnam, the number of mobile payment transactions grew by nearly 200% during their lock-down period. Additionally, e-wallets such as ZaloPay, Momo, and Grab-backed Moca also experienced high rates of adoption during this period.

“People were looking for an opportunity to do banking very easily but they wanted to avoid physical interaction as much as possible, so we launched a new digital, mobile banking offering with a much better user experience and faster transaction speed than before and compared to other banks.” 

– Mr. Pahala Mansury

3. Shift Towards Social Commerce

As COVID-19 disrupts most supply chains and traditional retail channels, many SEA customers have experienced or adopted new retail channels to a varying degree. An area that largely benefited from this opportunity is social commerce. Social media has become a one-stop platform where customers can be influenced by a variety of content and subsequently shop directly or through chat rooms on Facebook, WhatsApp or Line. In fact, social commerce accounted for about 44% of SEA’s $100 billion Internet economy in 2020[2].

To serve this growing demand and overcome challenges from the pandemic, we are not only seeing major brands but also micro-businesses adopt and integrate social commerce into their business models. One example is Singapore’s Infocomm Media Development Authority. They’re helping stalls in wet markets that are traditionally cash-only and have zero online presence online. This initiative has enabled customers to order their groceries from mom-and-pop shops remotely via Facebook and enjoy same-day delivery to their homes. We expect to see social commerce become an increasingly common practice among brands to grow their relevance and strengthen trust among customers.

“I would say social commerce is what makes a brand more relevant because it’s all about building community and trust. This is even more so in Southeast Asia.”

– Ms. Pinky Yee

4. Emergence of the New Experiential Customer

The pandemic has led to stay-at-home restrictions that forced customers to live their lives, including working, shopping, exercising and entertaining, all from home. Personalized digital experiences that seamlessly fit into the customer’s individual home routines have become increasingly important as they have fewer opportunities to interact with products and services physically. Even as stores re-open, we are seeing brands adjusting to the new normal at home by complementing their services.

For example, Indonesian ride-hailing brand GoJek accelerated the launch of GoPlay, a streaming entertainment service that offers locally personalized content such as Gossip Girl Indonesia. The growing pool of customers demanding personalized experiences at home has pushed brands to reinvent their offerings. Luxury, healthcare, food and beverage and educational experiences, for instance, are increasingly integrated into the stay-at-home lifestyle.

“As the outdoors are declining in terms of relevance, brands need to continuously think about how they can generate content that is relevant and entertaining to that family, to that side of the home lifestyle as they spend more hours at home.”

– Mr. Pahala Mansury

How to Unlock New Value to Win in SEA

The above trends create a wealth of opportunities for brands to innovate and unlock value. During times of disruption, brands need to adopt a digital transformation and innovation agenda that is both human-centric and digitally powered to align employees, customers and communities around a shared purpose and vision. While most companies turn to technology-driven optimization, technology alone does not drive the wheel of transformation, but rather, we must use technology to enable changes across all areas of the business from customer experience to marketing and sales to organizational culture in order to unlock uncommon growth.

“Instilling innovation from inside out allows companies to adapt quickly to evolving customer needs and get ahead of other competitors.”

– Mr. Alvin Neo

  • Customer experience transformation must begin from a human perspective, focusing not just on users but also business operators responsible for maintaining and improving the experience. Singapore Airlines leveraged artificial intelligence (AI), customer data and blockchain technology to deliver more personalized end-to-end experiences across its channels. As a result, Singapore Airlines was able to consistently outperform key competitor, Emirates, with the highest customer satisfaction (87%) [3]
  • Businesses need to reinvent marketing and sales by embracing customer-data strategies and omnichannel approaches to grow market share and increase loyalty and customer value. In Thailand, the iconic tricycle-riding ice cream vendor, Wall’s Man, was elevated into a new-world phenomenon by creating a new, mobile-activated service and interactive messaging with GPS tracking. Customers order ice cream by simply sending a sticker to Wall’s Man’s chatbot online. The customer data collected through its services allows Wall’s Man to manage his inventory better while providing insights through customer profiling. Despite the economic turmoil and entrance of new players, sales increased by 4% within the first two months of activation. Currently, one of three Thai Line users has joined Wall’s Man Line account, allowing a whole new generation to experience the joy of delivered ice cream [4].
  • It is also crucial for companies to approach the transformational agenda from the inside out by advancing cultures that excite top talent and continuously fuel innovation. The culture of innovation is instilled within Tokopedia, an Indonesian technology company specializing in e-commerce. Tokopedia has built a winning learning and development (L&D) ecosystem that is digital, accessible and gamified. Tokopedia’s effort in L&D was recognized by winning the “Best Companies to Work for in Asia” Award in 2020 [5]. Success in L&D has also been translated into business, with Tokopedia sustaining its position as a trailblazer in Indonesia and its CEO, William Tanuwijaya, won the Innovation Leadership Achievement Award in Indonesia from The Asian Banker in 2021.

References:

[1] According to the e-Conomy SEA 2020 research done by Google Inc., Temasek Holdings Pre. and Bain & Co., 2020 https://storage.googleapis.com/gweb-economy-sea.appspot.com/assets/pdf/e-Conomy_SEA_2020_Report.pdf

[2] The e-Conomy SEA 2020, https://storage.googleapis.com/gweb-economy-sea.appspot.com/assets/pdf/e-Conomy_SEA_2020_Report.pdf

[3] According to Roy Morgan, Jan 2020, https://www.roymorgan.com/findings/8253-csa-results-november-2019-international-airline-satisfaction-202001192349

[4] According to The State of Digital Transformation in SEA

[5] According to Nanang Chalid Blog Post, Dec 2020, https://www.nanangchalid.com/post/start-with-why-a-winning-l-d-story

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The COVID-19 pandemic has accelerated and transformed the digital landscape in SEA, presenting opportunities for uncommon growth in this diverse, fast-growing and digitally developed region. The key to unlocking more value is approaching innovation not just by applying new digital technologies, but more importantly, innovating from the inside out across all dimensions of the organization.

To learn more about how to unlock uncommon growth in your organization, contact us today.

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