Elie Haibi
Co-Founder and CEO
Hermes Systems
View from the Top

Engaging Companies in the Digital Revolution

Wed, 02/21/2018 - 11:47

Q: What is the extent of Hermes Systems’ offering to its clients?

A: Our main objective is to help our clients thrive in the fourth industrial revolution. Unlike our competitors, we are involved in both the design and implementation of transformation programs. To design the digital strategy, we start from the client’s vision – where they want to be, in what way they want to be special – which becomes their value proposition. We then design a new operating model to support the value proposition. This design considers the execution challenges and ensures that we plan for a viable transformation. 

We also help our clients implement or govern the implementation and make sure the project portfolio takes them where they want to be. It is an ongoing journey with a dynamic model that responds to changing market conditions and the constant evolution of technologies and emerging disruptions. What we add is an innovation process at the core of the design phase, involving a mixed team of business consultants and IT specialists resulting in a truly disruptive transformation plan. Some call this design thinking.

To increase the speed of execution we have built technological capabilities that solve typical problems that occur in many industries. Moreover, the solutions we build reuse industry specific frameworks developed over the years in banking, insurance, retail, distribution, telecoms and healthcare. In retail and e-commerce, we are working with customers to achieve next-day delivery or same-day delivery of goods to the consumer through the digitalization of their distribution force. In telecoms and utilities, our solutions help speed up the execution of work orders with increased quality of service. In distribution, we help make sure the delivery of goods is carried out in a timely and cost-effective manner. In pharma, we help automate the salesforce’s sales schedule while controlling each representative’s inventory of drug samples considering their expiration dates. In banking, we help accelerate and reduce the cost of credit origination. 

These are ready-to-implement solutions that can be executed as a first step but are hardly disruptive. Now, if we consider a specific company, examine its processes, its value proposition and its current capabilities, we can try to turn around its operating model and provide it with advanced capabilities that may make its value proposition unique and disruptive within the context of its industry.

Q: What challenges do most companies face when trying to implement a digital strategy?

A: A key success factor of any digital strategy is having clearly defined where the company is, where it is going and what kind of leadership the company wants to have in its market. It is important to note that leadership can be attained by following two different strategies: leadership through product and its digital value proposition and leadership through customer engagement.

For example, when it comes to digitalizing the engagement strategy, the banking and retail sectors have been fairly active, while the insurance and healthcare industries have fallen behind due to the inherent challenges in those sectors. For any company that wishes to implement a digital strategy, it is important to consider a few pre-requisites. One basic element is to achieve operational excellence; this requires having standardized, automated and optimized processes. It also encompasses optimizing the organization, which means having the necessary staff with the right skillsets assigned to every activity and using the right tools and with access to the right information at the right moment. Another important element is building a solid digital backbone that is robust and at the same time flexible enough to allow for change. That is integrating the information flow across processes, departments and services. Companies must have the ability to respond automatically to complex events through the smart planning of automation, which means dedicating human workers only to important and complicated decisions while letting a computer program solve the rest.

Q: How do you reconcile the Mexican conservative mindset with the disruptive transformation digital strategies entail?

A: We have found companies reluctant to embrace digital change without them being aware of it. This reticence manifests often in not taking the necessary time to analyze what this change actually means. There are good initiatives in Mexico but we lack speed and awareness when designing and executing digital projects. Awareness means understanding why the company is carrying out this change and how much this change will impact its mission.

We witness significant investments in technological areas but sometimes these investments do not match the business strategy. The problem with misguided investments is that they rarely offer competitive advantages. It is necessary to consider at every moment how to be unique and what is the company’s differentiator and the company’s unique value proposition and how to uphold it, using internal processes, operational excellence and additional business, organizational and technological capabilities. 

When it comes to digital initiatives, innovation and creativity are decisive. Organizations are configured to avoid risks and directors and managers are risk administrators. Naturally, if they see an initiative that entails a certain degree of risk their job is to deactivate it. With every disruptive digital strategy there is certainly inherent risk, which must always be properly managed; however, a serious willingness to innovate must be accompanied by fearlessness of failure and the acceptance to try things over and over again. However successful, big and mature the organization is, it must be prepared to act like a startup when it comes to innovation. 

Q: In an era of digitalization and ephemeral information, what strategies can companies implement to adequately engage with consumers?

A: Successful customer engagement requires knowing your customers beyond their names, emails and addresses. You have to know and understand their needs, expectations and motivations. It also requires being able to act accordingly. 
For this to happen, companies need to build what usually is called the single-customer view or 360º view of the customer, which contains everything the organization knows about the customer, transactions, products, surveys, complaints and also some customer analytics, such as satisfaction score, churn, next-likely purchase and ideally, next-best action in terms of engagement. That is, the engagement action that will have the best impact on the customer. Then you have to make this 360º view available to every representative at each customer touchpoint. With proper training and relevant knowledge about the customer, the representative can fully deliver on the brand promise. You also need the processes to support the representative’s work and make the experience consistently good. Then again, culture is very important. It is what makes the representative empowered and compelled to really get out of its way to create an outstanding experience for the customer. 

This is the keystone capability you need to properly engage with customers, otherwise any customer-related strategy would be executed without tactical visibility and would be doomed to fail.