What is Digital Transformation?
There has been a lot of dialogue in 2016 about digital transformation. Everyone is talking about it, but the term often means different things. It’s impossible to think of an industry that has not been profoundly impacted by this fundamental shift. Many of the definitions I have seen are too narrow – focusing on things like the customer experience, product development or marketing.
Digital transformation involves the fundamental re-architecting of tools, processes, and people’s roles and activities across a business. But as Brian Solis of Altimeter Group describes in his blog, the term “digital” can often be misleading. He describes digital transformation as being “about how people and their behaviors, expectations, and preferences are changing.” Any type of transformation is primarily about people.
For me, it can now be more accurately described as “the transformation of business,” as the underlying infrastructure is already there – it is no longer a “technology” issue. For the transformation to occur, it has to be driven by leaders across the organization, and we have seen the pace of this change begin to accelerate in every function. 2017 will be an exciting year in digital transformation across the enterprise, and I want to take some time here to discuss a few trends that I see impacting the marketing function specifically in the coming year.
Marketing Driving Digital Transformation Across Organizations
A study commissioned by Marketing Week last year found that 62% of staff feel the biggest barrier to digital transformation is not having a leadership mandate. Marketing is at the forefront of digital transformation, as marketing technology leveraging digital channels has been in place for 20 years now, so marketers have a clear leadership role to play. Also, marketing is taking increased ownership over the customer and employee experience where digital approaches are already ingrained in the fabric of the relationship. As a result of the ongoing influence on the customer experience (CX), the marketing function is also having a stronger voice in product development given their closeness with customers. 2017 will be the year that marketing takes the lead in driving digital transformation across the enterprise in close partnership with I.T.
Increased Focus On Employee Advocacy Programs
A key benefit of digital transformation is the ability to leverage employees as brand advocates and extend the brand into their social networks. In a 2016 report by JEM Consulting & Advisory Services titled Employee as Brand: The 2016 State of Employee Advocacy found that while employee advocacy programs were not ubiquitous, they are gaining traction. 50% of companies surveyed reported having an employee advocacy program, while an additional 22% planned to roll a program out in 2016. These are big numbers, and this is further evidenced by venture capital flowing into the space. In 2016, PostBeyond (my company), Dynamic Signal, SocialChorus and several others obtained financing to service this growing market. In 2017, I expect to see a continued extension of employee advocacy use cases outside of marketing into sales enablement, social selling, recruiting, employee onboarding, executive thought leadership and employee branding. For more information on employee advocacy use cases, please see our eBook.
Marketing Technology Hits Hypergrowth…and So Does Complexity
In 2014, the Harvard Business Review published an article titled “The Rise of the Chief Marketing Technologist.” In the article, the authors described the emergence of a hybrid marketing and technology role, given the increasing importance of technology to modern marketing. The convergence of business and technical acumen gave rise to this role. In 2016, Gartner reported that 80% of companies with over $500M in annual revenues had a Chief Marketing Technologist and that 33% of marketing budgets were spent on technology. In 2017, the number and types of technologies available to marketers will hit hypergrowth.
But with this incredible array of technology comes complexity. Which tools to use at each point in the marketing lifecycle, how to integrate disparate technologies, and how to build an effective end-to-end marketing stack are difficult questions that are becoming more challenging with more choices. Last year, DataXu, in collaboration with market research firm MORAR and Withpr, produced a quantitative research study on the current state of marketing technology management: Modernizing the Mix: Transforming Marketing Through Technology and Analytics. It is a great report and kudos to Scott Brinker for highlighting it in his blog last year. In the report, they surveyed 532 marketers, in both the US (174) and Europe (358), across a wide range of organizational sizes and marketing budgets, and found that 70% of marketing teams have a role that is mainly responsible for technology usage.
I believe that on modern marketing teams, technology plays a pivotal role in everyone’s jobs, and this stat speaks to the need for someone to “stitch it all together.”
Although technology is becoming more prevalent in every role, it’s marketers who have the necessary background knowledge and skill-set to lead digital transformation. Market insight, technical acumen, and proximity to customers give marketers a unique vantage point, and I think as organizations evolve, marketers will play an increasingly important role in leading enterprise-wide change.
What do you think are the key drivers of digital transformation? How has your organization approached this change? Share your thoughts in the comments.