Customers demand better. Not a day goes by without a news headline which suggests consumers are getting a very bad deal from service providers. Poor servicing is compounded by the growth of false data appearing online, some human generated, some machine generated which have consumers question if they are really getting the best deal.Consumers today have their expectations in the ‘real’ world distorted by the omnipresent services provided by Google, Uber and Netflix. The solution to this customer experience conundrum, some organisations believe is to smartly infuse technological advancement into their infrastructure and processes to become truly digital.
Digital is not a mere buzzword today. “Are we digitally equipped?” How can we serve customers better?” is the question every organisation is looking to answer whether they sell carrots, clicks or carats of gold. Most are embarking on the process or already well on their way to overhauling their entire operations in order to satisfy their increasingly digitally savvy customers. So where is the best place to start if you are looking to digitisedeliver extreme customer centricity?
Steps in digitalization
Consumers today have their expectations in the ‘real’ world distorted by the omnipresent services provided by Google, Uber and Netflix.When it comes to digitalising an entire organisation, the whole workforce has to buy in to change. This means modifying the current working culture and behaviour to one which can facilitate digitalisation. Before assessing strengths, weaknesses, opportunities and threats, the change management team needs to represent different functions within the organisation and at different levels. Digitalisation is not without risk and poor decision making will literally cost an organisation millions.
In banking, some view the upgrade of core banking systems is as complex as replacing one engine on a Boeing 747 airplane. It pays for plan ahead and plan well.
An Econsultancy Magazine survey on Digital Transformation found nearly two thirds of organisations saying transformations should be a top-down mandate. Although it could be argued the executives should lead the digital charge, it is not a good use of talent and resources if they are the sole taskmaster of change, neither will it be a smart idea if one business unit took charge because they could take advantage to pursue their own agenda.
The age of an organisation is another important factor in becoming digital. In banking for instance, the young Challenger Banks making their marks in Asia, Europe and North America have a relatively easy process to digitise. Most Challengers invest heavily into digitalisation because their resources are not held up by maintaining legacy technology and physical bank branches. There is also an opportunity for developing economies in East Asia and Europe to be the benchmark of customer experience delivery as they have skipped a generation of legacy computing which currently slows down organisations operating in developed economies.
The infrastructure of older banks, many of which make up our high street today, is the result of mergers and acquisitions of various smaller banks. To digitalise heritage banks, it would require a lot of work on the patchwork systems and processes already in place. Whether you are a 150-year-old organisation or a young, disruptive, brand based in a tech hub, Digital Transformation should be referenced against a framework which is Smart, Digital, and Programmable.
How to be Smart, Digital and Programmable
Smart is about understanding what an organisation wants to enable and accurately appropriate the right resource to solve the right issue. Smart is also about allowing humans and machines do what they are good at. Analytics and artificial intelligence is driving the Fourth Industrial Revolution, they are very good at absorbing large amounts of unstructured and structured data providing predictive and prescriptive advice to organisations about trends, productivity and the economy. Humans should be left to do the value-add work which is bringing context and explanation to patterns gathered by the machines.
Digital is deciding which channels will be used to deliver a product or service and also be a medium where customers voice their feedback. Customers are more cautious than ever, they’ll turn away from an organisation who don’t align with their values and needs. Digital is the channel where organisations can gather deeper customer insights if they ingest and analyse semi-structured and unstructured data often found on social networks. Unstructured data is likely to give a bank, retailer or utilities provider real time context and better insight into the risk an organisation holds against each customer. However, the veracity of data found on social media is a topic passionately debated at the moment with the growth of Fake News. For businesses it is a challenge to be anywhere and everywhere for your customers so prioritising digital channels would be a prudent start.
Organisations need to work smarter with data. With an estimated 50 billion Internet of Things Sensors by 2020 and more than 200 billion “Things” on the Internet by 2030, it is no question that IoT will be not only be transformative, but disruptive to business models and should be factored into transformation projects.
Programmable relies on organisations to look outwards and find an ecosystem which gives them the opportunity to partner on a value-exchange basis. This creates a win-win for the customer and the service provider. Instead of being forced to migrate to a new platform, API technology will open doors for multiple platforms to tie together in an ecosystem that is fast and flexible. There is progressive banking regulation, in the UK for example, where heritage banks are being nudged to work with young Challengers. Indeed, certain software and technology companies may resist this change as it means sharing the pie, but for companies looking to deploy the technology that creates the best user experience and furthering customer stickiness, it is often required to source from multiple vendors.
Getting the best for your customer
Influenced by the Open Web, consumers prefer to trial and test a range of options before a purchase and are more likely to select best-of-breed services because they are easily accessible.
In markets where competition is rife, participating organisations can only succeed if they work in partnerships with rivals. The determination of value today is directly linked to the network which an organisation has. Take the automotive industry for example, it has been reported that BMW and Audi have formed a network with technology firms such as Huawei, Ericsson and Intel to standardise and test connected vehicles. Organisations who offer value to their ecosystem are also making their brand more indispensable to their customers. Businesses need to set realistic transformation goals and should clarify system or process changes and identify weaknesses even before looking outwards at possible partners who can add to the value chainhips.
OrganisationsHitting Ground Zero by ripping the whole system apart is not advisable for businesses due to the large investment of money and time required. They need to leverage their existing system, packed full of rich data and update their processes with smart investments to deliver optimal digital solutions. Once the company buys into the transformation, data analytics will advise stakeholders which areas to tackle first.
Customers demand tailored products at first but they also want their service providers to act as an advisor throughout the whole customer experience, and having a 360-degree view of a customer helps to predict the best offers and select the ideal channel to deliver the service. Using house buying as an example, the potential buyer wants options and advice on historic house sales data, local crime rates, broadband coverage,healthcare facilities and school rankings even to the extent of who is the best removal company in the area. Neither a bank, telecoms, retailer nor logistics company can supply all the data required alone. This is why organisations ‘buddying’ up works for customers today.
Organisations cannot go it alone anymore, from automotive to manufacturing, businesses are looking for partnerships which will provide their customers a best-of-breed selection. Partnerships also reduce the high cost of internal research and development and will get the service into the market faster than if an organisation develops an app or service from scratch. Some are already on their way to becoming digital, if you are about to start the process, we hope this checklist will guide you to a painless transformation.
The Five-Step Digital Transformation Checklist
1. Identify key stakeholders from all levels of the organisation who have the influence over their peers and get their buy-in
2. Adopt a customer-focused mindset and move away from a product-focused mentality, sSource all relevant unstructured and structured data which highlights the painpoints which could stop the organisation from transforming to a customer-focused business
3. Discover and apply the quick wins which can prove the goal of Digital Transformation based on data analysis
4. Deploy the Smart, Digital and Programmable methodology to the transformation process
5. Research and source partners to create the best-of-breed ecosystem for your customers