NUS-ISS practice chiefs in a panel discussion with our guest speakers at the NUS-ISS Learning Festival 2022 Accelerating Digital Excellence Keynote : Digital Transformation Past x Present x Future Forum.
We live in uncertain times, but one thing is for sure – more tech disruption is coming.
In Southeast Asia alone, there were 70 million new online consumers added between 2020 and 2021 – equivalent to the entire population of the United Kingdom. Organisations are transiting into the hybrid work model, with employees demanding the freedom to work from anywhere they want. The arrival of the next generation of the Internet – the Metaverse – is expected to fundamentally change the way we experience our world.
“If one were to look at the top ten trends in the digital age right now, what’s clear is that we are all increasingly moving more parts of our lives online,” says Damien Cummings, Chief of Digital Strategy & Leadership Practice, at the Institute of Systems Science at National University of Singapore (NUS-ISS). “This means that at some point in time, everyone is expected to be an expert in a digital field – be it data, or e-commerce, or artificial intelligence (AI).”
Damien was sharing at the Digital Transformation Past x Present x Future Forum at NUS-ISS Learning Festival 2022, alongside speakers including Magdalene Loh, Head of Innovation, Prudential Assurance Company Singapore; Mario Van der Meulen, Director for Customer Strategy & Design, Deloitte Digital; and Amy Huang, Chief, Digital Products & Platforms Practice, NUS-ISS.
Given the urgency of the need to be digital-ready, it is worrying that statistics show that 70 percent of digital transformation initiatives fail.
“Most companies mistake digital transformation with digitisation or digitalisation, some even use these terms interchangeably,” Damien notes. He explains that digitisation refers to the process of turning manual processes into an electronic one, “such as turning paperwork into an Excel spreadsheet, which is really just dipping the toe into the water”. Meanwhile, digitalisation involves adapting processes to a digital world, such as adopting applications or solutions to streamline or simplify certain processes, bringing about incremental improvements such as 30 percent more revenue or a certain amount of cost savings.
However, digital transformation is something of an entirely different scale. “It involves the creation of new business models, doing something unique that no competitor has ever done, and offering your customers something that your competitors will not be able to.”
Innovation is not a superpower
Speaking on Prudential's experience in digital transformation and innovation, Magdalene says her biggest takeaway in the journey is that innovation is not something that’s elusive. “It doesn’t take a superhero to innovate; sometimes, you don’t even need fancy technology. It’s really about designing processes and systems, getting everyone onboard, and managing the changes,” she explains.
One example Magdalene shared was about how Prudential came to implement claims-based pricing for its Integrated Shield Plans, which is part of the national health protection scheme. For years, all the six insurers in Singapore were in the red when it came to these insurance plans. “Prudential decided that this cannot go on. This product has to make economic sense – it cannot be just a national service that we do,” she says.
The company took inspiration from an adjacent field, motor insurance, which offers no-claims discounts for riders. “The customers pay more in premiums next year if they make a claim this year, and they get a discount on premiums next year if they don't make a claim this year,” Magdalene explains. This successfully addressed the problem of indiscriminate claims for Integrated Shield Plans, and Prudential became the first insurer to become profitable in this space.
Innovation cannot be for the sake of technology – it has to be business-driven, Magdalene believes.
An important mindset shift that Prudential's digital transformation brought about was that they cannot continue to be just an insurance company. “What the company has really worked on helping all employees to understand, is that we cannot just focus on selling insurance plans. We need to be working on how to help people get the most out of life, particularly in areas of health and wealth.”
They do this by going beyond the digital. “The cool thing about Singapore is that, despite how connected and digitally mature we are, not everything is online,” Magdalene says. “The government actually displays large dengue alert banners in the physical neighbourhoods, and if you notice, their colours change from time to time depending on whether your area is a danger zone or not.”
For customers living in “red zones”, Prudential allows them to purchase its dengue micro-insurance plan conveniently on its mobile app in just a few clicks. “It costs just $5, and that's the price of one cup of coffee to be covered for three months against dengue, including severe dengue infections. With this, we are putting convenience at the fingertips of customers.”
Making the customers feel good
Concurring with Magdalene, Mario emphasises that crafting a digital transformation plan is not a tech architecture, but an experience architecture. “The truth is that you can bring in lots of advanced technologies, but if it doesn’t put you ahead of your competitors in terms of customer experience, you will not get anywhere.”
According to a research by PwC, 86% of customers are willing to pay more for products and services that give them a good customer experience, and that brings them joy in that transaction. Meanwhile, 92% say they will give a brand just two opportunities to give them a good experience – or they're gone. “This means that the experiences you give as a brand can make or break your business, and therein lies the importance of understanding your customers, and knowing what they want,” Mario says.
Digital transformation as a collective endeavor
However, it may not be as straightforward as it sounds.
Amy explains that the challenge with digital transformation is that changes are accelerating. “Around the world, we're now more connected than we had ever been – be in terms of communications and social media, or logistics and supply chains. This adds multiple layers of complexity to everything.”
At the same time, every digital transformation journey is unique. There is no one-size-fits-all solution, and each organisation has to chart its own path. “But that being said, this is not a lonely hike into the unknown – digital transformation is a collective journey,” Amy says.
She adds, “This journey will involve not just your employees and your customers. There are also the stakeholders – from your suppliers, vendors, and partners, to regulators and whoever else in the ecosystem. These changes are going to impact the way that you do business with them.”
Amid the many moving blocks that organisations have to navigate, Amy stresses that communication is critical. At the end of the day, it’s about teamwork.
“Digital transformation is going to be a long and iterative journey. For it to be successful, you always need to work towards more and better communication to ensure everyone is aligned and working together,” she advises.
Watch the full playlist on the NUS-ISS Learning Festival 2022 : Digital Transformation Past x Present x Future Forum here.
For more information on NUS-ISS' Executive Education Programmes in Digital Strategy and Leadership, visit here.