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Consumer product companies must digitally transform themselves NOW.

Amazon’s impact on how people buy is in turn having a dramatic impact on how consumers discover, evaluate and purchase products. Amazon leverages their intimate knowledge of the customer to make the experience personal and maximize wallet share. They are the new intermediary between you and your customers as traditional resellers get squeezed out of the market.

The end result for your company is shrinking margins and market share. It is no longer acceptable to rely upon anonymized customer data provided by resellers: you must establish direct and intimate relationships with your customers. Businesses that are not actively reinventing themselves to capitalize on digital will, in all likelihood, not be in existence in five years.

 

 

TYPICAL RESPONSE

Executives are not blind to the new market reality. However, their typical response to the situation applies old methodologies to new realities. These methodologies include fine-tuning supply chains, tweaking marketing messages, and haphazardly releasing gimmicky digital widgets in a disconnected fashion. Referring to the Wayne Gretzky quote: they are skating where the puck has been.

Further, employees wholly unqualified are often assigned to manage and oversee digital initiatives. There are very definite, diverse elements that comprise a successful digital transformation team. By the time you mature your own teams, you will have already lost the game.

During every fundamental change in technology (mainframe to mini, mini to PC, local area networking, wide area networking, internet working, the web, ERP, CRM, etc.) there has always been more demand for talent than the talent that exists to fulfill that demand. For the next few years you simply cannot transform your business to digital by doing it on your own. You do not have the time. You do not have the money. You cannot accept the risk.

 

WHAT TALENT IS NEEDED, AND WHEN

In order to digitally transform your business, you need both engineers and designers. If you rely solely upon engineers you’ll end up with a technically elegant, yet unusable solution that nobody wants and doesn’t satisfy any genuine business requirements. If you rely solely upon designers, you’ll end up with a visually appealing solution that has no basis in technical reality, is impractical and way out of reach of anyone’s budget.

You need to keep designers and engineers working together throughout the life of the effort. Keeping core elements of the team intact throughout the life of the project will help to ensure that what is delivered is relevant, compelling, cost-effective and adaptable.

 

 

WHAT IS DIFFERENT NOW

Traditionally, computer technology was all about automating repeatable business processes. Processes were very narrowly defined, and then software engineers would convert these narratives into computer programs. Employees were trained on how to use the programs and that was their job: “take it or leave it.” Do you remember character-based monitors? This was a technical, or engineering-led approach.

Apple Computer was a forerunner in changing how products are designed, be they hardware, software or consumables. Apple took a “design-led” approach whereby the effort begins with a user(s) perspective, and then moves in the direction of what technologies are required to satisfy the user’s needs. This approach requires an entirely new set of skills and an entirely new way of thinking and executing.

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As consumer product companies have had little direct relationships with their customers, this was not an issue. But to establish direct relationships with customers, rather than rely upon anonymized data from resellers, it is imperative that customer perspectives must come first, and all solutions created have them at the center of the universe.

Going back to the Wayne Gretzky analogy, yes, you must focus on your current business. However, in tandem, you must quickly move to where the puck is going, you must capitalize on digital to be where your customers are moving. If you do not do both simultaneously you will be an industry laggard, rather than leader.

 

BUT THERE ARE SOME ‘GOTCHAS’ – CAVEAT EMPTOR

The path to digital transformation and creating an omnichannel digital service for your customers is an ever-evolving, continuous and complex process. To successfully execute a digital transformation initiative, design and engineering must co-exist throughout the entire effort.

If you buy the argument that you cannot do it yourself, beware of the options. On one side of the coin are traditional IT outsourcing companies that are desperately reinventing themselves to prevent revenue and margin loss. They are learning digital on their clients’ dollars. Their track record of success is awful.

On the other side of the coin are marketing agencies. They are very adept at creativity and [visual] design. But their designs are often not based upon technical or fiscal feasibility. They are partnering with technical companies; this does not work. Often when design is separated from engineering, what was originally envisioned isn’t built, and there is a lot of finger-pointing between the two disciplines.

To successfully execute a digital transformation initiative, design and engineering must co-exist throughout the entire effort.

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