The psychometric industry is a vital part of the human resources and education sectors, providing tools and insights for assessing personality, aptitude, skills, and knowledge. However, the industry is also facing significant challenges and opportunities in the context of digital business transformation. In this blog post, I will discuss the current state of the psychometric industry, the three phases of digital business transformation, and why psychometric product and service providers need to embrace digitalization as a strategic step toward digital business transformation as a strategic imperative.
The psychometric industry is highly fragmented, with over 2500 companies offering different products and services, ranging from standardized tests to customized assessments. This fragmentation makes it difficult for customers to compare and choose the best solutions for their needs, and for providers to scale and innovate. Moreover, the industry is still largely in the digitization phase, where the products are sold and delivered in the digital channel, primarily on content delivery or general survey systems. Digitization is the process of converting analog information into digital formats, such as moving from paper-based tests to online assessments. Digitization can improve efficiency, accessibility, and security, but it does not fundamentally change the nature or value of the products.
Digitization is only the first of three phases of digital business transformation, which is the process of using digital technologies to create new or modify existing business processes, products, and customer experiences. The second phase is digitalization, which is the process of using digital technologies to enhance or transform the products and services themselves, such as adding pulsing, monitoring, cross correlation with other data sets, filtering, dynamic analysis, or artificial intelligence features. Digitalization can increase effectiveness, engagement, and personalization, but it also requires significant investment and innovation. The third phase is digital business transformation, which is the process of creating new business models and value propositions based on digital technologies, such as offering subscription-based or outcome-based services. Digital business transformation can generate new revenue streams, customer segments, and competitive advantages, but it also requires more vision and leadership.
Psychometric product and service companies cannot afford to stay in the digitization phase while others are moving toward digitalization and digital business transformation. The customers’ expectations and needs are changing rapidly, and the competition from other sectors is increasing. The psychometric industry needs to leverage its expertise and data to create more value-added and differentiated products and services that can meet the current and future challenges of human resources and education. The psychometric industry needs to think beyond digitization and embrace digitalization as a next step toward digital business transformation.
Jeff Campbell is CEO of CykoMetrix, a digitalization platform that enables psychometric product and service companies to leapfrog into digital business transformations. CykoMetrix will handle the digitalization while you focus on leading the business transformation. www.cykometrix.com