Real Estate

What does it mean to digitalize your business? – Daniel Kim – Medium

Great things are done by a series of small things brought together.” — Vincent Van Gough

Digital Transformation is a big topic in Germany (and really the rest of the world). Most of the examples online refer to global digital powerhouses such as Amazon and Google. What does it mean for smaller businesses, especially businesses with deep rooted history in “under digitalized” industries such as real estate?

The first thing to get out of the way is digitalization is not about the tools, it’s about the mindset. Of course tools and technology help, but they are only enablers to implement a different mindset when it comes to operating your business.

At the end of your (first iteration of) digitalization process, you should be able to know your customer, respond instantly when you can, and when you can’t, know where to spend your time and resources. That’s easier said than done. As I said before, technology helps get you there, but putting disparate pieces of tech into a coherent and holistic stack requires time and investment. A mindset shift is important as technology through this process.

What sort of mind shift needs to happen?

  1. Clarity on how value is created — Businesses do many many things. It should be clear how everyday tasks roll up into value creation for the customer. Many times, this requires taking a critical eye to the many things we do on a day to day basis.
  2. An iterative approach — “Digitalization” is never done. A philosophy of slow but steady improvements to the customer experience should be regularly applied. This involves a huge shift away from the way we normally think about things (as projects) into incorporating the transformation process into your every BAU (business as usual) daily work. Minimize the risk by scaling into improvements.
  3. You don’t know the answers, only the customers do — the notion of improvement can be subjective. At the end of the day, there is only one judge (your customers!). This highlights the importance incorporating customer response measurements to drive decisions. In other words, data driven decision making.
  4. Concentrate on the primary bottleneck — Any improvements made to your value creation pipeline, make sure it’s the main point of friction. What is the primary bottleneck?

For some, this mindset shift should look familiar to either the lean production system and agile development. Some related research topics: Kaizen, Customer First, and Theory of Constraints. In some ways, digitalization and digital transformation is misnamed; it should be called “realigning your value creation process into a platform that enables the customer centric flywheel”… but that’s wordy.

Now pretend for a second, you’ve waved your magic wand and the organization goes through a dramatic cultural mindset shift instantly (ha!). What type of tools would help grease the wheels? Your transformation tool chest should provide for you 5 things:

  1. Making transparent and explicit what your customer journey is. In a multisided business, you of course have multiple journeys that intersect at some point.
  2. Map customer interaction points and allow you to measure their effect on the customers.
  3. Map how the data the flows throughout the journey to be able to reconstruct the customer experience.
  4. Provide reporting at key strategic points in the journey to offer realtime feedback if and when things go wrong.
  5. Provide a platform to continue your transformation.

That again is easier said than done. There are many tools out on the market with slightly different philosophies. Getting them to talk to each other and work with each other is no easy task.

Here are your takeaways:

  1. A lean mindset is more important than technology
  2. Once you have the mindset, map your customer journey
  3. Don’t try to get it detailed at first, start small and iterate

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