By Ricardo Rocha, Associate Marketing Director at Noesis
Much has been heard that the COVID-19 pandemic brought in just a few months the equivalent of years of technological evolution. But will the results of this forced digital transformation be maintained? Or do some businesses view this “new normal” as something temporary and are ready to return to the old systems and media as soon as there is a chance?
Ricardo Rocha, Marketing & Communication associate director at Noesis, believes that the changes resulting from the new paradigm in terms of consumption habits are here to stay. "Digital transformation is a high-speed train that can no longer be stopped," he says in an interview with Marketeer.
Probably, he adds, we will evolve towards a hybrid model that will combine the digital with the physical, but with the “digital first” approach increasingly rooted. According to Ricardo Rocha, electronic commerce will continue to grow and there are those who talk about the concept of digital service cooperatives (as with agricultural cooperatives).
The official also stresses that technology is not the only driver of digital transformation. A cultural change is needed in the business model and paradigm, with the Marketing department playing a fundamental role.
Digital transformation has been an expression repeated until exhaustion, especially in recent years. In general, what state are Portuguese companies in this field?
It is difficult to generalize, especially in a business fabric that is not homogeneous and in a “discipline”, Digital Transformation, which is quite comprehensive. The digital transformation is a buzzword and is, in fact, something that has been talked about for some years. Nowadays, it is an unstoppable movement, something that is already unavoidable, but that assumes different forms and angles of intervention in companies, and is also a continuous process.
In this sense, it is difficult to ascertain the point at which Portuguese companies are at present, but I would say that there are sectors in which digital transformation is quite advanced, especially in large companies. In SMEs, digital maturity is less, although this segment is positively impacted by the entrepreneurial movement and the emergence of natively digital startups.
Also in the public sector, the so-called eGov, we have seen very interesting movements for digital transformation, in terms of services provided to citizens through digital channels, with some interesting innovations around the Citizen Card, such as the Digital Mobile Key, for example.
Did the pandemic act as an accelerator of this phenomenon? To what extent?
Clearly. The pandemic was an accelerator of digital transformation, since it accelerated the change in some consumption habits, the result of the confinement that we were forced from one day to the next. E-Commerce, for example, suffered a brutal acceleration, consumers sought even more alternative channels to interact with brands and this forced organization to look at Customer Experience and their digital channels with different eyes.
On the other hand, companies have had to change their processes and the way they organize themselves. We can think of topics such as teleworking, which has also undergone a very sharp increase, which has forced organizations to adapt to this new reality; but also the themes of automation and artificial intelligence, to which organizations began to pay greater attention. Likewise, the whole theme of data, analytics and the need to incorporate this intelligence in decision making (Data Driven Business) became the order of the day.
Is the innovation forced by the pandemic temporary or will it stay?
The transformation process was already underway and was accelerated by the context, so I would say it clearly came to stay. Digital transformation is a high-speed train that can no longer be stopped. We do not know what the post-pandemic world will be like, but it is almost certain that it will not be the same as the pre-pandemic period. Consumers are increasingly digital, so are organizations.
We will probably evolve towards a hybrid model that will combine the digital with the physical, but with the digital first approach increasingly rooted in society and business.
Which sectors have the most difficulties in making the digital leap?
I would say that the primary sectors and the basic industry are the ones that have the most difficulties in adopting digital. Above all, in the ability to leverage its offer and positioning in the search for new channels to sell its product to the final consumer, outside the usual distribution channels.
E-commerce in the coming years may be a trend and there are those who talk about the concept of digital service cooperatives, which is nothing more than re-editing the philosophy of agricultural cooperatives, for example, and adapting them to digital. Even so, even in the primary sector, despite this lag, there are countless digital transformation processes underway, namely with the use of technology, sensors, IoTs, essentially in the production process, with the theme of analytics and big data bringing a lot of innovation to this sector.
Similarly, in Industry, concepts such as Connected Field Service, or predictive analysis, using artificial intelligence, are themes that the sector increasingly looks at and are processes of digital transformation of the production model that will mean gains in efficiency and remarkable competitiveness.
And, on the other hand, which sectors are more comfortable to carry out this evolution?
In recent times, there has been a strong acceleration in the financial, banking and insurance sector, driven by the emergence of FinTech that came to revolutionize the sector. The pandemic context, in particular the period of confinement, has also led banks and insurers to look even more into digital and to seek to develop their digital channels for interaction with their customers.
Tourism, for example, which is suffering a huge shock from this crisis, could be one of the sectors to make a significant leap in the post-pandemic, in the next 2/3 years, as well as the automobile sector, which is gradually going reinventing your business model.
And how can more traditional businesses compete with others that were born digital? Is it a fair rivalry?
I would say that it is the market at work and also that it is this competition that promotes innovation and improves the quality of the service provided to customers. The emergence of new companies and new natively digital businesses, which operate or compete with pre-existing businesses, precisely forces innovation.
If we look, once again, at the financial sextor, as an example, we find that the emergence of FinTech that came to offer the same “traditional” service, reinventing and digitizing it, promoted a huge acceleration in this sedtor. Fintech came to prove that many traditional banking processes were truly obsolete and were not adjusted to market and consumer requirements.
Just look at the process of opening an account, for example. Continuing to “force” a consumer to have to go to a bank branch to open an account, because he has to “sign some papers” or to prove his identity, is a flagrant example of a misalignment between the service provided and the consumer expectation.
And, as in most cases of digital transformation, the “problem” was not technological. Digital signature technologies, alternative accreditation systems, technology for reading or scanning documents, etc. have been around for many years. Technology is not the only driver of digital transformation, as we have seen in this case. The digital transformation occurs through a cultural change, in the business model, in a paradigm and, in this case, leveraged by the fintech that created this disruption in the market and accelerated the digital transformation in the sector.
Is this a change that must come from within? Or is specialized external assistance essential?
There is no "right" answer to the question, it depends on the context, the type of transformation, the state of maturity of the organization itself. Once again, reinforcement, Digital Transformation is not limited to a technological process or the adoption of a certain technology. Technology is undoubtedly the “facilitator” of the process and must respond to the needs identified in the organization.
For this reason, I tend to be an apologist that change comes from within, with or without the external participation of a consultant, for example. It leaves and must start from the business, from the stakeholders, from Marketing to, and not from the IT department. The digital transformation is a change in paradigm, culture, processes, business model, which culminates in a technological adoption to achieve this objective.
What role does the Marketing department have in all this?
Marketing assumes, more than ever, a special relevance. It is necessary to look at Marketing as something more than the moment of communication, but as an effective accelerator of the business, generator of leads and commercial opportunities.
Nowadays, it is necessary to find new ways to sell in the digital world and new forms of relationship with the customer. It is necessary to find new points of contact with customers, promote new forms of proximity and find the right formula to position our brand, our services or products.
Getting to know customers better, the difficulties they face, their interests, what they are looking for, and also to closely monitor market developments. Being able to adapt to new realities, every day, is the mission of Marketing, where disciplines such as Marketing Intelligence gain even greater preponderance. It is up to Marketing to be the engine of organizations, to promote the necessary changes in the business, to trigger innovation, to be a promoter of Digital Transformation and to be an integral part in the strategic decisions to be taken.
What should be the first steps towards a digital transformation?
It depends a lot, the sector of activity, the market, the business itself. However, one of the most common “mistakes” is to think that digital transformation is reduced to having a digital presence, a website or being on social networks. I would say that we have passed that stage. The stage when the simple digital presence was sufficient.
The digital presence, today, is a condition inherent in any business. The challenge of digital transformation is much more related to business transformation, with a reinvention of the model than with the adoption of a specific technology or digital channel. Digital transformation is an ongoing process that presupposes the capacity for constant reinvention and innovation.
Even so, if it were possible to identify a first step to take on this journey, I would say that this first step involves identifying internal processes, organizations or business models that can be “digitized”. Deep down, understanding where technology can help make a difference.
This intervention can take place in numerous areas within a company. We can think about interaction with customers, a purchase or ordering process, the implementation of a customer service or customer care, but also an internal process, its automation, eliminating paper and implementing 100% digital flows, for example.
The examples are innumerable, in the most varied sectors. If we think about the most successful innovations that have revolutionized the market in recent years - in the area of urban mobility (such as an Uber, electric scooters, etc.), in the means of payment (with MBWay, for example), in financial services (Revolut , among many others) - we are mostly talking about traditional business models, with “analog” processes, which have been reinvented and digitized. These were nothing less than digital transformation processes, which were based on the reinvention of a business model, and on the adoption of new forms of interaction with customers.