The COVID-19 pandemic has hastened digital transformation in enterprises. But the pandemic has also pushed most parts of the world into recession. Businesses not yet digitally focused will sink. But even businesses embracing digital need recession-proof digital transformation strategies and initiatives. This tech blog lists the major factors that enable recession-proof digital transformation.
1. Unify the Data
Most enterprises have data scattered over several places and much of it in inaccessible silos. The backbone of a robust digital system is bringing all data on one page. Data silos result in faulty analytics and decisions based on incomplete information. For instance, the sales executive may miss an up-selling or cross-selling opportunity, or even fail to follow up for renewal of a subscription.
- Use integrated solutions to reconcile data across CRM, financials, and other systems. Cloud platforms such as Salesforce offer connectors to integrate data from various sources.
- Aggregate different sources of data into a single dashboard, for fast and informed decision making. For instance, pull in opportunity and forecast data with revenue and cost data from the finance system into a single dashboard.
Seamless interoperability of the data ensures human agents do not have to worry about data integrity. They may focus on more important tasks such as advancing opportunities and serving customers.
2. Understand Customers Better
The customer is always the king. In recessionary times, pampering customers becomes more important than before. A 5% increase in customer retention correlates to increased profitability by a whopping 95%.
- Deploy digital systems that enable executives to understand the customer and remain on top of the relationship.
- Identify the best customers and put in double the effort to pamper them. The cost to gain a new customer is five times the cost to keep an existing customer.
- Identify low yielding customers. Take action to convert them into high yielding customers. Some options include changing the price structure, adjusting the delivery model, or targeting a different market.
- Harness opportunity data from touchpoints. Offer the right level of support, at different stages of the customer lifecycle. Get a holistic view from these touchpoints, and make proactive decisions.
Have clarity on how to identify the best customer. The finance team may prefer customers who provide maximum revenue. The sales team may prefer customers who make big-ticket purchases, even if one-off. The support team may prefer customers who do not make too many demands. Get everyone on the same page, and develop baseline metrics to identify the best customers. Go beyond obvious metrics such as revenue per customer, to identify the total lifecycle value of the customer. Also, track leading indicators that signal risk of attrition, and make timely interventions.
3. Turn Operational Data into Business Intelligence
Successful businesses deploy analytical tools to make sense of Big Data. They go beyond troubleshooting and problem-solving. They use analytics to understand how the business functions, and glean insights on how to make it better.
Accumulating data is meaningless without clarity on how to use the data. Use data to get answers to pressing questions, such as
- Is the business stable?
- Are we doing the right things?
- Are utilisation levels right?
Focus on the microelements to get a tighter grip on operations. During a recession, new opportunities dry up. Profits come through strict controls, and getting the house in efficient order.
Identify key metrics that make a difference to business operations and profitability. Track such metrics constantly. Some key metrics include sales forecasts, average input costs, average rate, revenue forecasting, profitability, average salary per employee, year-on-year expenses, and average utilisation of assets. Make proactive interventions to improve these figures.
Put more time and energy into making systems smarter. Use data insights to optimise processes. Making systems and processes simpler, and automating make the enterprise leaner.
Monitor the network. AIOps based platforms enable monitoring of complex multi-cloud environments. Improved insights enable proactive actions. Businesses become able to seize opportunities they would otherwise have missed. Compressive network monitoring also secures the network against advanced persistent threats.
4. Invest in Automation
Most enterprises shudder at the thought of investments in new technologies during the time of recession. But automation pays back for itself in a short while and delivers huge efficiency and cost advantages.
- Automate routine and regular processes. For instance, AI and automation create surveys, generate notifications, update survey results. The system auto-generates thank you mails.
- Apply human intelligence to understand the decision-making process. Take the help of technology to codify the decision making patterns. This enables running business functions on autopilot.
- Build up reports by co-opting micro-elements. Tweak it through trial-and-error. Configure to auto-populate fields and calculate figures, to the extent possible. After the upfront hard work, powerful insights deliver automatically, at a single click. Business managers, analysts and executives get access to live data and may track operations and functions in real-time. The productivity gains are huge.
Automation allows enterprises to save big on human resources cost. The salary bill makes up a significant chunk of costs for most enterprises. A skilled workforce is a source of competitive advantage in today’s knowledge economy. But during recessionary times, when opportunities and revenue dry up, the survival of the enterprise may rest on letting some staff go.
5. Partner with AI Service Providers
Artificial Intelligence and Machine Learning are in-vogue technologies today. AI makes explicit distinct patterns and behaviours that impact performance. It also exposes uncomfortable truths that force businesses out of their cosy but inefficient status-quos.
But the practical application of AI is difficult. Skilled data scientists cost an arm and a leg, are unaffordable and often unavailable to most businesses even during the best of times.
The best approach is to partner with vendors who offer Artificial Intelligence capabilities. Seek out cloud-based Artificial Intelligence resources, with easy scalability and elasticity.
6. Ensure Transparency
Transparency at the enterprise level eradicates silos. Silos restrict decision-makers from acting based on complete insight. Transparency also improves accountability, as people make informed decisions. They cannot feign ignorance, or complain of not being in the loop.
The three-step journey towards transparency involves:
- Simplifying the data, or making data user-friendly
- Aggregating the data on a single platform
- Applying analytics to glean insights from data
Transparency depends not just on technology, but also culture. Silos mean people do not know what they are doing.
Develop a trust model that ensures the sharing of data across the enterprise. Offer integrated dashboards and handy apps to pull in the required information from various sources. Configure the apps to deliver actionable insights to executives. For instance, pull in data from sales and opportunities and overlay it with product information. This enables accurate revenue forecasts.
7. Develop Flexible Systems
Many businesses diversify revenue streams to weather the recessionary storm. This could mean launching new product lines, expanding to new geographies, or increasing the customer base. Over-reliance on a single customer or a single product is a disaster waiting to happen, even during boom times.
Businesses seeking to diversify revenue streams deploy:
- Systems to bolster marketing activities. This includes social listening, content management systems, and email marketing tools.
- Flexible systems that support innovation
Success during times of recession depends on seizing any opportunities that come by. The best business systems allow a certain level of ad-hocism and improvisation. Rigid processes and validations strangle line managers and executives.
Regardless of whether a recession is around the corner, it does not harm businesses to prepare for bouts of economic uncertainty.
