We’ve learned that in order to achieve digital transformation (DT) success, manufacturing companies need to ensure their strategies are customer-centric. But why are so many firms finding this difficult, and where are they falling short?
In a report by Forrester, author Ashutosh Sharma found that manufacturing companies are simply focusing on the wrong things during their DT journeys. Let’s take a look at where they’re getting stuck.
Focusing on the Wrong Objectives
Digital transformation is no longer optional for manufacturers. In order to create new sources of value and compete with diruptive competitors, firms must develop DT strategies. And most manufacturing companies know this.
In another Forrester survey, 19% of global decision makers at manufacturing firms claimed to have already completed digital transformation, whereas 58% said that they were currently undergoing DT.
However, when Forrester had 18,277 global business and technology decision makers and influencers rank their DT priorities one through five, they found out that manufacturers ranked improving customer experience (CX)—arguably the most important component of DT—fourth, while growing revenue came in at number one.
And while growing revenue is usually the main motivator behind any business decision, improving CX and growing revenue aren’t mutually exclusive—they actually go hand-in-hand. By focusing on the customer, you’re investing money and resources into something that will help you make more money. And if you don’t? Customers have options, and won’t hesitate to go to a competitor.
When it came to actions taken to improve products and/or services, the majority of manufacturers responded that they were:
- Restructuring their organization to become more agile (33%)
- Moving from a product-based to a service-based relationship with customers (33%)
- Developing smartphone and/or tablet apps to extend the value of products and/or services (30%)
- Developing products and/or services for greater emotional engagement with customers (29%)
This focus on developing smarter, more accessible, and customer-focused products is a step in the right direction, however, many manufacturers are going about it the wrong way. As Sharma explains:
Their approach to building smarter products is still inside-out and engineering-led: Few involve customers in [the] process of (co-)creating smart products. Most manufacturers are stuck in a traditional engineering mindset of ‘ship and forget,’ where engineers obsess over product-centric quality frameworks and never want to hear about customers again once they’ve delivered a product.
Looking in the Wrong Direction
Furthermore, when manufacturing companies were asked what they were doing to improve the experience of their customers, they overwhelming responded that they were improving online customer experiences:
But as you can see from these survey results, the actions taken to improve customer experience don’t actually involve any customers. Sharma notes that a design thinking mindset could help manufacturers achieve many of these objectives, including improved websites and cross-channel experiences, while keeping customers top of mind.
Getting Back on Track
So what can manufacturers do to get back on track? Start by putting the customer at the heart of your DT strategy. As we discussed in a previous post, doing this means being more connected when it comes to customer data, aligning KPIs and technology with customer outcomes, and becoming an overall customer-obsessed organization.
By so doing, you’ll help improve product design, reduce the risk of failure, and build a better service-based model.
Want to learn more about digital transformation in the manufacturing industry? Stay tuned for our next post on the three phases manufacturers go through during their DT journey.