Digital transformation: what it is and why it was the unofficial theme at MWC

The main takeaway theme from last week’s Mobile World Congress in Barcelona, wasn’t tech, virtual reality (VR) or internet of things:  it was people trying to work out what mobile or digital means for their business.

Richard D. Fain, chairman & CEO, Royal Caribbean Cruises:

Digital has transformed our business. We are still a very personal business, but the technology has freed our crew and our guests from many of the mundane tasks that keep us from human interactions.

It doesn’t matter if your business is advertising, manufacturing, retail, leisure, multinational or start-up, you need to figure out what opportunities and threats this array of technologies presents and what on earth you are going to do about it.

The answer for most companies, if they know it or not, is digital transformation. Despite being oft uttered on stage, on stands and in interviews at MWC, quizzing people it soon becomes clear there is no accepted industry definition for this term.

So let’s suggest a definition: the conversion or enablement of analogue business processes, products and communication to digital. Or as DMI’s Allen Wayne Smith puts it: atoms to bits.

In future, technology companies and conferences like Mobile World Congress need to do a lot more to help companies understand what digital transformation means and can deliver for businesses. Screaming “Mobile is everything” from every MWC billboard, doesn’t help anyone.

Evidence of digital transformation

The evidence of and motivation for digital transformation is all over MWC.

The physical manifestation is smart, connected and sensor-enabled products and machines – connected/autonomous cars, health-monitoring devices, wearables,  connected toothbrush and smart home appliances.

Where these smart/connected products are made by established brands, this is evidence of digital transformation, where these products are from start-up companies, this should be a call to action to the establish brands with which they will compete.

The vocal evidence of digital transformation came on stage from a number of brands (though the vast majority of speakers at MWC are vendors and telcos), notably the car manufacturers.

On the MWC stage, Ford CEO Mark Field proclaimed his intention to change his real-world company into “a leader in connectivity, mobility, autonomous vehicles, customer experience, and data and analytics”.

While on the IAB stage, Steven Althaus, director brand management and marketing services BMW Group wants to make BMW the “cockpit” from which drivers control their digital and physical life, including the smart-home appliances.

Talking to car manufacturers, such as Ford and BMW, there’s a shared vision that the company must own the digital relationship with drivers – not just owners of their vehicles – via the connected car and via their phone.

They want to aggregate digital services – starting with car-sharing and parking assistance – via their mobile phone apps; while in-car, the mapping and navigational services will help people find hotels, restaurants and so on.

here_maps_cz11

The in-car relationship looks far stronger, if you actually own the mapping service, hence BMW, Audi and Daimler’s $3.1 billion acquisition of Nokia Here in August 2015 looks a very shrewd move.

In retail, digital transformation has been underway for decades. Those retailers that have not embraced the change have lost business to the ecommerce giants, typified by Amazon, plenty have shut up shop for good.

great example of atoms to bits is UK’s Shop Direct

Jonathan Wall, group ecommerce director spoke at the Mobile Media Summit – which has transitioned from being a 100% catalogue retailer (it abandoned the high street in 2005) to 72% catalogue four years ago to 100% digital retailer (59% of sales are mobile) today.

After 80 years, the last catalogue was produced in April 2015.

 Littlewoods catalogue

Jonathan Wall comments:

We believe that being a 100% digital retailer, undistracted by having stores, gives us a real edge. It enables us to focus our business; obsessing and investing every day in how we can use big data to make the online shopping experience easier and ever more personalised.

Best vision for digital transformation

The best vision of what digital transformation really means for business, came from the most unexpected of places: Royal Caribbean Cruises (RCCL).

In an on-stage MWC interview between Naomi Climer, president of Institution of Engineering & Technology (IET) and RCCL’s charismatic CEO Richard Fain, there was spontaneous applause when he explained that digital/mobile helps companies remove the “crap” out of customer experience.

Royal Caribbean has reduced the on-boarding process from 1.5 hours to 10 minutes on its newest ships.

Getting on a boat is a mess of governmental, security, customs and immigration procedures, which used to mean lots of standing in-line and filling out forms.

RCCL has streamlined this process with a Smart Checkin app, which enables guests to complete forms at home, so only a quayside scan of a barcode and passport are required.

smart check in

Once on-board, guests can use their devices to plan and book activities on-board or excursions on-shore, or contact other guests and use the internet, social media, send emails or make video calls as they would at home.

They use a WOW band to access their cabin or make purchases on board.

Richard D. Fain, chairman & CEO, RCCL, told ClickZ:

Digital has transformed our business. We are still a very personal business, but the technology has freed our crew and our guests from many of the mundane tasks that keep us from human interactions.

This isn’t just about building useful apps, or even about seamless integration with RCCL’s (and its partners’) backend systems, it’s about how you build cruise ships.

Digital technologies have transformed the way Royal Caribbean Cruises designs, builds and operates cruise ships.

Richard Fain:

Technology gives us design tools far beyond anything seen before. This includes tools to visualize choices (VR, renderings, models etc.) as well as tools to calculate stresses and loads that allow different structures.

Then the infrastructure needs to be totally different. Obviously, the wiring needs have to accommodate the wireless environment. When Quantum of the Seas was launched in November 2014 she featured more than 700 Mbps and with a latency of less than 120 milliseconds which was more than the entire cruise industry combined.

Today, all of our [Oasis Class and Quantum Class] ships that feature VOOM offer this type of bandwidth.

quantum_of_the_seas_sm_cz11

But it is not just guests who benefit. RCCL has provided all employees on these ships with a tablet, so they can be more productive, communicate with their families and further their skills with e-learning.

Fain:

Operating a modern, sophisticated cruise ships requires a high level of knowledge and training that makes the tablets eminently more practical. The bandwidth gives crew the ability to stay more connected than ever before with their friends and family back home. It also allows them to advance their knowledge of this vessel as well as their general education.

When this columnist was a croupier on cruise ships 20 years ago, communicating with friends and family meant standing in a queue when you reached homeport to use an overpriced telephone and picking up mail a week or two after it was sent.

At sea, you were totally cut off from the outside world.

The motivation for digital transformation

There is a big distinction between a company that makes digital-enabled products and services – which are increasingly common at MWC – and digitally-enabled/digital company – which requires a difficult and costly transformation. It is clear that RCCL is embarking on the latter course.

tablet

Digital transformation is – or should be – a companywide initiative. It includes how companies design, develop, manufacture, market, sell and deliver products and services, workforce mobilization, as well as the ‘smart’ enablement of assets and products and the technology that makes it all work together seamlessly.

BMW’s Steven Althaus tells ClickZ:

Digitization and digital transformation needs to be understood by each and everyone in the company… Everyone is effected by digital transformation, it is not something that can be delegated to one area of the company. It effects the whole business model.”

The motivations for digital transformation are multiple:

  • The expectation from consumers, clients, employees and business partners that all tasks should be easily achievable from a mobile device;
  • Build a closer “lifetime” relationship with customers.
  • The desire to automate business processes that previously needed a person to perform them;
  • Collection of a wealth of data from and about everything internal and external and interpreting that data to make the business run more efficiently and improve customer service;
  • Develop new revenue streams;
  • Fear of disintermediation.

Much can be learned about digital transformation by studying the born-digital companies that are (or should be) keeping the established players in their industries awake at night.

Among those present at MWC were Airbnb and Just Eat.

Airbnb helped to accommodate 30,000 of the 101,000 attendees at the conference this year, according to Mike Curtis, VP of engineering, Airbnb.

Five years ago, the idea that a start-up would arrange accommodation for almost one third of visitors to MWC would have been incomprehensible – especially to the hotel companies who have been charging premium rates for years.

Just Eat is a London-based company that allows 12.5 million users in 15 countries order a meal via mobile or online from 60,000 local takeaway restaurants to be delivered to your home.

That is a lot more outlets than McDonald’s which has 36,000 worldwide, very few of which offer home delivery. Just Eat also maintains the largest global database of online restaurant reviews – with 9 million.

just eat

But the most interesting figure is the size of the company’s business intelligence team. It has more than 40 data scientists worldwide crunching stats and planning where it should be recruiting restaurants.

How many data scientists do you think mainstream players such as McDonald’s or Subway has?

Adrian Blair, COO, Just Eat tells ClickZ:

We are the agents of digital transformation. We are driving the move from analogue to digital communication.”

For insights from successful C-suite warriors on how to adapt and thrive in the digital economy, see the Digital Transformation stream at our Shift London event in May

This is the eleventh part of the ClickZ ‘DNA of mobile-friendly web’ series.

Here are the others:

  1. Six mobile strategy questions
  2. How to identify your mobile audience 
  3. Why prioritize mobile-friendly web? 
  4. Web apps: advantages of native apps in a web browser
  5. How to test the viability of your mobile project 
  6. Assessing the technical and operational feasibility of your mobile project 
  7. Show me the money: proving your mobile site or app will deliver ROI
  8. Formulating the go-to market strategy for your mobile project
  9. How to market your mobile site or app without spending a fortune on ads
  10. The pros, cons and politics of hybrid mobile apps.

Andy Favell is ClickZ columnist on mobile. He is a London-based freelance mobile/digital consultant, journalist and web editor.

Contact him via LinkedIn or Twitter at Andy_Favell.

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