The pandemic has hurt them, but with six years of digitalization holding steady, this hydraulics supplier is alive and kicking, thanks.
Will the current COVID-19 saga spell the end of ‘old-school’ businesses? Much has been said about urgent digitalization to brace for the new business landscape, but this is often easier said than done.
Some established businesses think that moving a business online is just creating and maintaining a website. That is all they can accept anyway, because they have gotten used to traditional work processes, their loyal clientele and the ‘if it still works why fix it’ mentality.
In search of an ‘above-average’ established company to profile about digitalization, the DigiconAsia team came across Chuan Kok, a hydraulics supplies provider of almost 40 years of heritage in the digitally-thriving nation of Singapore.
The firm was picked because it had the foresight to begin its digitalization journey way back in 2014, but it has stood steady in the intense economic storm. While their business has undoubtedly been hit by the combined impact of COVID-19 and fluctuations in the Oil & Gas industry, the company estimates performance would have been roughly 20% worse had they not already transformed the business.
Better still, with the right experience and digital know-how under their belt now, they are also able to use this time to prepare for the uncertain future, building digital resources and customer engagement initiatives that can help put them in better stead once business picks back up. Let us find out more from Chuan Kok’s CEO, Ivan Cai and his Product Head, Eric Low.
DigiconAsia: What inspired you to start on your digitalization journey in 2014, and what was the strategy? What parts of the business did you concentrate on and how did you transform each of these functions?
Ivan Cai: In 2015, oil prices had dropped dramatically. Even as one of the leading suppliers of hydraulic components in the oil and gas industry, Chuan Kok did not escape from the fall. In our Situation Room, we came up with our company’s new purpose: To deliver to customers, quality products they can depend on; to provide expert advice they can trust, and to offer unparalleled after-sales service.
Making clientele relationships our top priority, we narrowed down the three factors that we wanted to improve on, knowing that they would impact our business significantly in the future:
Our clients: We wanted to see how to add more value to our customers. What were the risks, fears and difficulties they were encountering? To reinvent their customer journey, we put ourselves in their shoes. We then realized that the ease of their experience and other improvements required technological tools. That was really when the journey of our digitalization began.
Removal of friction: We identified all the points of friction in our communication system and sales flows. It became evident that our mission could not just be about easing things for our clients, but also about improving our internal workflow. We reviewed each contact point that our customer would have to go through, and learned the need for better data collection which would eventually provide strategic customer insights for our own analysis and refinement.
Always prepared for the future: The next-most innovative move or product in our industry can come out anytime. We have to always be ready adapt and see how we can be ‘on par or better’. Let us be honest—Chuan Kok was a 38-year-old business (pretty much seen as an “old uncle’s business”). We have to advance and be up-to-date. We had to form a digital, lean business model with the implementation of technology such as software integration, cloud computing and more.
The thrusts of these three crucial factors then formed the nexus of our digitalization strategy.
DigiconAsia: What are some key initiatives of your digital transformation strategy that you have launched, or are planning to launch?
Ivan Cai: Overall, we hoped to digitalize processes that would allow us to achieve greater speed in our operations, and attain the agility to adapt and make changes swiftly. If we can shorten the work timeframe (i.e., administrative tasks), we can then spend the time engaging with our clients and learning insightful details as to how we can help them better with our services.
Sales and marketing have been one area where we have been able to shorten the cycle effectively, by using tools from HubSpot to automate routine tasks, and create greater alignment and synergy across all our customer outreach activities.
Eric Low: With the combination of our digital transformation (DX) and long-standing expertise in the industry, we know that we can use our knowledge to provide upfront value to our client where we give academy-style education initiatives to them. With our current CRM platform, we deliver a weekly newsletter, taking an educational approach to teach our audience about the best hydraulics solutions. This is where we compete differently among other suppliers.
DigiconAsia: Please share some challenges you faced in your digitalization journey. How did you overcome (or how are you overcoming) them?
Ivan Cai: To us, the toughest part is simply the implementation from front end to back end given the amount of paperwork and habits built over three decades. To ensure that our team members were assimilated into the process smoothly, we were clear in our vision of the future, and shared with them that they were a part of our future and that meant everyone was moving forward together—no one must be left behind. It was definitely uncomfortable for some, but having each other’s backs made the change a little easier.
The team had to understand why the change had to be made—we were only doing so to improve. There is an idiom: “People don’t buy WHAT you do; they buy WHY you do it”. Since we chose to be better, clients were, and still are, more inclined to trust us and our mission to help them.
On that note, the management team is the catalyst of change (and change for the better). With them helming the digitalization and working with the new tools first, it helped pave the way for the other team members as standard procedures; guides were then put together with the help of the HubSpot team.