Yangon: Digital Transformation 2.0
Good evening ladies and gentlemen. Thank you. It is an honour to be invited here to Yangon for the inaugural LinkedIn Local Yangon event, to share my ideas and experiences on Digital Transformation 2.0. First, let me introduce myself: I have a background of more than 30 years of Infocomm and technology. In my last 7 years, I have moved to the Dark Side. I have been Principal Solutions Consultant with a social community company, Lithium Technologies, and then a Business Consultant with Huawei International.
During this time, I have helped customers like telcos, e-retailers and banks use social media, designed their customers’ omnichannel journeys and developed their go-to-market plans. Companies I have helped launch their online communities and social media support in Asia include Indosat, XL Axiata, both in Indonesia, Globe Telecom Philippines, dtac Thailand, StarHub Singapore, DiGi and AmBank (Malaysia), Flipkart (e-retailer in India), Hong Kong Broadband and Hong Kong Telecom, and Safaricom Kenya.
I have also helped these businesses and some high-tech manufacturers set up crowdsourced innovation.
Now, why am I starting with Digital Transformation 2.0? What about 1.0? What is DX 1.0?
DX 1.0 is about adding digital to some existing core processes, channels and systems. It can be digitizing the billing system, enabling all payments to be online, automating supply chain with partners. Nowadays, most discussions on DX 1.0 have focussed on digital marketing but that is only part of DX. Most discussions and projects are about systems and how processes and people may need to change when these systems are added.
DX 2.0 is described by Accenture as end-to-end, culture-driven, and from inside out. IDC calls DX 2.0 as having Digital Leadership. It’s about a company having a Digital DNA. What is Digital DNA?
First, let me start with a story:
When my previous company Lithium Technologies helped Globe Telecom Philippines launch their online community, we recommended that they should hold a big party when the community was 3 months old. It was to be a time to celebrate success and to thank their fans who have been helping each other and other Globe customers. Among the invitees was their most helpful broadband fan. He had answered most of the questions with 85% accuracy. So, an invitation was sent to his email address. In reply, he said he needed to get his parents’ permission. “How old are you?”, the moderators asked. “Twelve,” he replied. 12 years old answering highly technical questions accurately! On an open digital platform.
The kid was born digital. What about companies? Are there any that are “born digital”?
Interaction: Are any of you been to the UK in the last 8 years? Have you heard of GiffGaff mobile? Fidor Bank? Can I have a show of hands, please?
For those who have not heard of these 2 companies:
Founded in 2009, GiffGaff is an MVNO (basically, a mobile operator without a network license but could retail their own branded SIM cards). It had no call centre for more than 5 years. It used online community for support, sales by members, very light Cloud IT systems. For every SIM that was sold by a member, he/she £5 credit. The new member gets £5 credit too. For every question answered in the online community, member gets £0.01. GiffGaff was huge with community innovation and co-creation. Fans suggested, and then voted for new plans. GiffGaff also used a lot of crowdsourced marketing. Community fans participated in crazy costume sets to promote the brand. Most of these savings were passed back to customers via lower prices and rewards. Their tagline was “The Network Run by You”. Communities are very important because there exists a high level of trust already.
Are your companies growing but struggling with high cost of IT systems, shortage of trained call centre agents and expensive distribution channels? In US and EU, trust of big institutions is at an all-time low.
Founded 2003, Fidor Bank is another all-online enterprise, with no bank branch office. It uses crowdsourced innovation for new products. Savings are passed back to customers via cheaper services.
In 2016, KPMG states: “These challengers are distinguishing themselves through transparency, superior data analytics, cheaper banking services and simpler business models that provide them a cost advantage.”
Closer to home, we have Circles.Life Singapore. They are another MVNO, offers SIM card-only, plans are data heavy (which is what Millenials want); they have no physical shop. Sales are online and via word-of-mouth. Subscribers are members. My son is a member. Recommending another member increases your monthly data bundle by 200MB. Sell to 10, you get 2GB additional! Support is online: via webchat, no call centre. Open, easy to understand, transparent, collaborative (because members sell and innovate), lower operating costs. When Indosat did a survey of their customers on what they would most value, it was simple, transparent offers and rewards.
Interaction: Have any of you heard of Omnichannel/multichannel? What does omnichannel mean? Any volunteers?
Multi-channel has been associated with digital transformation. Multi-channel, as the name implies, means you have both traditional and digital channels. Once you open multi-channel, you cannot control the customer moving between channels. They may hear a radio ad, they search online to find out more, they ask questions on Facebook, and finally buying in a store. Then they complain via webchat when something is not working, and send it to a store for repair. This journey is omnichannel. You need a single system to track this single customer throughout his/her journey. Now that so much information about this customer is captured, you can perform big data analytics. Omnichannel forces a more integrated transformation. It can be implemented using DX 1.0. But to be sustainable, the company must quickly transform to 2.0.
Remember what Accenture and IDC said: Digital Transformation 2.0 is about being end-to-end digital, and from within.
Going back to our friend, Globe Telecom. Their CEO, Ernest Cu, started the transformation strategy. His vision was to transform the company from a telecom provider to a digital lifestyle provider. From a few traditional products to a large range of media services that needed partners and customers to participate. He wanted the company to be totally customer-centric. The customer must participate in all aspects of the company. He needed to open the company to social. You see, Philippines has a very young population. The median age is: 23.5 years. The population is growing rapidly. Social media is wildly popular, replacing SMS. Is this similar to Myanmar? (28.2 years) I think so.
So, Ernest embarked on a digital and social strategy to change the DNA of Globe Telecom. He wanted crowd-sourced innovation to happen. Subscribers could design their own mobile plans. They set their budget and could change the number of SMS, minutes of talk and data Gigabytes via sliders. When they are happy with their creation, they can share this personalised plan with their friends and family on social media. This was revolutionary in SE Asia at that time. It was part of co-creation, creating new products with your customers. Why? Because customers are more likely to buy products that they or their friends have participated in the creation process.
To enable this co-creation, Ernest replaced the old, rigid billing system.
Ernest also appointed a Head of Customer Experience. Her team integrated the support staff with the sales staff to create a new total customer experience team. They redesigned many of the internal processes to be end-to-end journeys, not segments. They broke down barriers between different product groups, front-end/back-end silos so customers can buy across product lines. When customers called in, agents could upsell and cross-sell it to them, eg between mobile and fixed products. It wasn’t easy to redesign processes and change minds, but after 3 years, in 2015, they accomplished their major milestones and the employees celebrated! The job never ends though. Today, the team continues to incorporate new processes and technologies. But they had the right DNA to start.
Lessons from the above example:
Digital transformation can only succeed when led by example and from inside-out. After that has started, we can then talk about the outside-in e2e customer decision journey. (Design thinking)
Digital transformation is a cultural transformation, it is not led by technology or processes. Those will come later, once the culture evolution has started.
When McKinsey interviewed Piyush Gupta, CEO of DBS Bank Singapore and asked him what were his lessons from the born-digital fintechs in his DX journey, he said it was not a case of “putting on digital lipstick”; it had to be deep. His biggest challenge was culture.
I have worked on digital transformation projects that failed because the culture was wrong.
So, it is Vision -> culture -> processes -> technology. In that order. You do not have to finish one to start the next.
Without a major cultural transformation, strategies are nice Powerpoint decks, processes stay in manuals and technology become white elephants.
So, what is the corporate culture, the digital DNA, that is required for Digital Transformation 2.0 to happen?
- Collaborate, not just cooperate: There is a difference. Cooperation is like a policeman asking a witness. One question, one answer. Collaboration is like an informant. The questions may be vague, but information is forthcoming and volunteered. To collaborate, there must be TRUST.
- Build Trust: Parties need to trust each other. Between peers, boss-employee, between business partners, between company and customer. Without trust, all exchanges will be guarded, if they happen at all.
In my previous job, when I walk towards a potential partner at an exhibition, the booth person will typically approach me and be friendly. Till they see my company badge or when I announce I was from a Chinese company. Mouth shut. Right or wrong assumptions. Perception of Trust, or lack of Trust, is important when it comes to sharing.
One must trust the customer too. When I was with Lithium, the CEO of a large Taiwan manufacturer told us he wanted his company to have crowdsourced innovation, where customers directly suggesting new product features. Because he knew no team in his company can create all the products that the market wants. Collective wisdom beats a single genius anytime. But his R&D team was so used to working without direct customer inputs that they think they know better than the customer.
- Give equal value in exchange: All parties must have mutual values in the exchange and must be perceived to gain in equal amounts in return. Yes, the overused phrase “win-win”.
- Establish peer-to-peer relationships: Collaboration can only work where it is a relationship of peers. Whether it is between teams, between business partners or with customers. No master-slave, no main contractor/subcontractor, no boss-employee. Trust and Value exchange.
- Allow for failures: You may know the end goal of Digital Transformation 2.0, but there are many paths to get there. So, there has to be room for experimentation and failures.
If you are an established brand with decades-old history, should the transformation happen within the main brand? Should it be a spinoff, should it be a sub-brand?
Circles.Life is totally new in Singapore. GiffGaff was a subsidiary of Telefonica Digital which was spun off Telefonica. Globe Telecom did an internal transformation. So, all are possible. It depends on your brand equity and if there are is legacy baggage.
Because Myanmar is so new into automated processes and technology, you have this once-in-a-lifetime chance to leapfrog your neighbours, including Singapore, because little is embedded/ingrained. Unlike other ASEAN countries, you didn’t rollout 2G, then 3G, then 4G. You jumped straight to 4G.
If you are a startup, don’t just copy old processes, add digital and then transform later. There will be too much to unlearn. Skip the pain. Jump straight to 2.0.
“Every mile you go in the wrong direction is really a two-mile error. Unlearning is twice as hard as learning.” – Anonymous
We can help you with the visioning. Once that is done, we can plan a roadmap that can rollout a few programs in parallel.
Ernest Cu had his vision of transforming Globe to the Digital Lifestyle company. Globe started with the billing system as the key pilot project because a) It took the longest and b) had the largest, most visible impact. Then they launched social media and online community. At almost the same time, the customer experience team was launched. Now Globe is sharing experience with Philippines enterprises on how to do digital transformation. That’s why I call it Digital DNA. Because it can be passed on.
For Myanmar, with mobile connection to the rural areas, many digital opportunities are opening up. Mobile payments will enable new business models. There are many uncharted paths. We can learn from other countries, but the ideas must be adapted to local conditions. With some crowdsourced creativity, many technical limitations can be overcome. You will need to collaborate with your partners and your customers. I have examples from India, Thailand and Kenya but we’re short of time.
To summarize, for Digital Transformation to be successful, your company needs to have a Digital DNA with 5 elements of collaboration, trust, mutual values, peer-to-peer relations, and allow for failure.
This starts with the right vision, a collaborative culture, a flattened hierarchy, to be open to innovative ideas from all sources. Technology is an enabler, not the goal. This change needs to happen from the top, where the management leads by example.
You do not need one stage to complete before embarking on the next, but you need a blueprint of milestones and endpoints in your digital journey.
We end with the story that we started: The 12-year old boy went to the Globe Telecom community celebration with parents and siblings. And they were all warmly welcomed by the Globe Telecom CEO, Ernest Cu, and presented with a certificate. Globe recognised that knowledge and sharing is not limited by age or hierarchy. Globe needed innovative ideas and trust from the Philippines community. Now, that’s one CEO who showed the way to Digital Transformation 2.0.