Digital transformation : Thinking big to overcome challenges in a changing world

Ekarat Sathutham

Disruption is sweeping through almost every sector of life around the world, requiring humans to adjust their mindsets, lifestyles, and also the way they do business. Scenes of pandemic, economic turmoil and smart technologies that were once confined to science fiction movies have now become the reality. In such a situation, only strong and fast-adapting businesses can survive.

Pochara Arayakarnkul, chief executive officer of Bluebik Plc, a consulting firm specialising in innovation/tech-driven strategy and management, says business paradigms are being revolutionised by the ongoing global virus crisis.

Adaptability now holds the key to overcoming obstacles and minimising adverse impacts. But with every crisis comes opportunities: businesses must explore new S-Curve industries in building their future.

Bluebik has developed the ‘4A’s model as a map to guide enterprises through the landscape of disruption. The first A is Assess. Assessments must be made in three parts, covering Capital, Technology and People.

Capital-related assessments identify Cash Runway and Burn Rate in both the best-case scenario and worst-case scenario, with a goal of determining liquidity, cut-off point, downsizing needs, etc.

Technology assessments determine current tech capabilities and the need to embrace new tech solutions. The right choices, possibly in the forms of cloud computing and software-as-a-service, after all promise to help reduce cost and increase agility.

People assessments, meanwhile, will pave the way for reskilling/upskilling. Personnel need to be equipped with skills that will be useful in the post-crisis period. Personnel development also increases employee engagement and loyalty.

Cost reduction and maintaining cash flow

The second A is Alleviate. It refers to efforts to curb cost, maintain cash flow, and use available capital for the minimisation of adverse impacts on one’s business. Managing cash flow should be done at the same time as seeking new sources of funds, just in case any emergency arises.

Enterprises should urgently pursue cost resilience. For example, fixed costs should be turned into pay-per-use costs by outsourcing and finding business partners.

Cloud computing and software-as-a-service (SaaS) can be solutions here, too, because they reduce technology costs.

Adjustments through digital help

The third A is Adjust. Undeniably, Covid-19 has radically changed consumer behaviours. Consumers have generally become more cautious about spending.

Businesses therefore should adjust to ensure their products/services remain the choice of consumers.

For effective adjustment, data analytics must leverage big data for efficient formulation of strategies, budgeting, and identification of target groups with purchasing power.

Supply-demand alignment is also necessary, to set the right prices for immediate decision-making.

The fourth A is Augment. When the crisis eases, enterprises should invest rapidly in technologies, infrastructure and talent to get ahead of competitors.

The focus should be on extending market reach by attracting consumers who have never used the services or who were previously customers of competitors.

Customised marketing, for example, can help boost market share.

Think big for business boost

Reinvestment should also be a focus at this time since the opportunity cost rate is relatively low. Enterprises with limited resources may invest first in areas that can instantly increase performance.

“Restructuring and workforce planning are also recommended for maximum agility and efficiency,” advises Pochara.

Saroj Laohasiri, head of Marketing Transformation and Marketing Strategy at Bluebik, meanwhile points out that marketing & advertising should retain their budget even in this time of crisis.

Their budgets just need to be well-managed, he says, as this helps promote brand recognition and retain competitiveness.

Three practical marketing guidelines

Saroy says the efficiency of marketing strategies can be boosted in three ways:

1. Enterprises should conduct product/service assessments to identify what can drive their short-term sales. There are generally three types of products/services: those fulfilling physical needs, those fulfilling emotional needs, and luxury that can wait.

Enterprises dealing in the first two types should spend money on marketing because the right promotions and marketing communication will lead to more purchases.

Those dealing in luxury are advised to focus on target groups that have high purchasing power. Data collection and online-platform analyses can enhance access to these targets.

CRM activities should be held to treat them like VIPs. Giving them special deals will also promote brand loyalty.

Digitally-enabled analytics

Various digital tools are now available for efficient analytics.

They can “read” customers’ emotions to find out what customers are looking for. Fast identification means faster response to the new demands and selling opportunities.

Able to analyse customers’ decision-making process thoroughly, users of such tools can identify the best time to present their products/services. For example, popping up at the final stage of the funnel when customers are comparing prices prior to placing an order will help close a deal.

2. Enterprises should consider the marketing budget as an investment, not an expense, because marketing spending contributes to their profitability.

While a decision to “completely cut advertising spending’ may be good for financial statements in the short run, it may entail bigger spending in the medium and long term to restore brand recognition and market share.

Marketing spending efficiency should be maximised through efficient analyses of media/platforms involved as well as competitors.

3. Management of marketing resources should take into account the fact that the ongoing crisis is changing consumer behaviours.

Assessments must be done to ensure brand value and selling points remain relevant. New positioning may be introduced to deliver better functionality and emotional fulfilment. Enterprises must ensure their brand image resonates with the identity of their target groups. CSR activities, it should be noted, mean a lot to branding.

Know yourself and fight on!

Saroj says enterprises should know both their circumstance and potential. In reviewing their portfolio, they should cancel or curb unprofitable production lines and develop new products in response to customers’ current needs.

Enterprises with a short cash runway should prioritise cash flow and conduct marketing activities for their best-sellers.

Enterprises with ample financial resources, on the other hand, should conduct PR/marketing activities both in the online and offline world to establish themselves as “top-of-mind” brands.