How to achieve customer-centricity in your digital transformation (Part 1)
Customer success is the best outcome for any digital transformation, but how to approach it from a customer-focused lens?
March 2022
This article discusses how to approach a customer-centric digital transformation, and the pivotal role that customer experience journeys and business metrics play in transforming how we function in the digital age.
What is digital transformation?
For the last two decades, most organizations were embarking on some level of digital transformation. Recently, Covid-19 has enforced a much more compelling business case to expedite that journey. Digital channels have resulted in an explosion of new digital products and services, and it has opened new markets as well as new competitions. The new digital business models drive complex new technologies, a new way of delivering products, new ways of developing business application software, and a very competitive market where customers are much more empowered, connected and informed.
First, let us level set with terms digital and digital transformation. Businesses are in digital space ever since the internet became commercial. Even before that telephony allowed IVR-type digital interactions. For most organizations, the term “digital” meant extending its existing business processes to the customers so they can self-service themselves, self-fill out an online order, or self-fill out an online complaint. These digital enhancements were mainly driven out of cost-saving drivers to avoid calls into the back office or call center. Once submitted, often these requests were then manually handled by the back office. During this period, rarely an enterprise was able to deliver a digitally connected experience to customers.
Ecommerce was a digital evolution that avoided brick-and-mortar, and complex chain of distribution centers, rather they fulfilled the orders directly from the warehouse to offer competitive pricing to customers. Though they provided basic shipment tracking this significantly improved the shopping experience for customers with busy lifestyles. However, at the same time, it created poor customer experiences on shipments and reverse logistics. For instance, late shipments, wrong product deliveries, dead on arrival, fraud, and complex refund processing resulted in customers lacking trust in eCommerce sellers.
Amazon simplified fulfillment provided shipment traceability and same-day delivery. Amazon prime removed shipment costs for the customer and it’s no-hassle return and refund. This renewed customer confidence in online shopping. Other enterprises followed suit and a variety of new products started to become available online. Remarkably this included groceries and virtual doctors.
Recently, Covid-19 endorsed the ever-expanding digital transactions and interactions with customers. Many organizations were able to conduct their business operations virtually leveraging digital technologies. It’s now a tested strategy to deal with crises situations, pandemics, and other larger emergencies. What has transpired from that experience is the confidence and trust in working digitally. It has now the potential to save millions of dollars for organizations by reducing physical infrastructure footprint. It can also provide flexible working styles and work-life balance for employees.
Social media and tech giants also played a key role not only in expanding digital interactions but also in developing a core set of technologies that have enabled new patterns for software engineering. This includes microservice patterns, DevOps, cloud-based solutions, open-source software, artificial intelligence (AI) assisted processing, and a lot more automation. Tech-giants donated their software to the open-source community to spark innovations. The big three cloud service providers Amazon, Google, and Microsoft all opened their cloud-based platforms with significant global deployment options, both for infrastructure as service (IaaS) and platform as a service (PaaS). Business application vendors enabled their suites in the cloud enabling accelerated implementation for large enterprises. This has provided a much more adaptable approach for open-source and cloud-based solutions in large enterprises, where it is now commercially supported. These tech giants also provided impetus on how product-based (or platform-based) organizations may function in the age of digital disruption (i.e., lean, agile, fail fast and customer value-focused), as their organizational models were much more suitable for the digital age.
Slowly but surely, business and technology innovations have evolved “together” enough to give rise to this new ideology of digital transformation. I want to emphasize “together” because that’s what digital transformation is, i.e., business and technology coming together as one. In my opinion, the crux of digital transformation revolves around two big things:
- A digitally active and informed customer sometimes includes do-it-yourself (DIY) personas, who are intelligent, knowledgeable, and know the competition to understand who can provide them with the best value. Winning them through customer experience delights means they can be an advocate of the brand, provided the brand can deliver a customer value, or — — they can be “digital” adversaries if the brand delivers a poor experience. For instance, A broken digital experience can result in poor reviews on a brand’s social media, and it can be incredibly damaging. Pricing that lacks transparency with hidden charges or poor fulfillment trackability may easily direct them to a competitor’s site.
- New digital product models are the result of technological advancements that have created persistent demands to interact, socialize, learn, explore, educate, trade, buy or sell, service, consult, diagnose, monitor in digital channels. It is providing new markets for innovative digital products or reinventing existing products both in the business and technology space. Companies like Kindle books or Netflix reinvented existing products into digital. In technology, cloud and cloud-based business application platforms are driving exponential growth, as brands no longer need to hire on-prem staff to manage complex technology platforms. Social media is an example of technology-driven innovation. Internet, web, mobile, and now a spectrum of Internet of Things (IoT) and smart gadgetry has opened door to a new set of digital product demands. Smart cars, smartwatches, smart travel, and an endless list of new digital choices.
An effective digital transformation requires a comprehensive and integrated change
This deeply impacted how the brand operates today with traditional products. Hence, an effective digital transformation requires a comprehensive and integrated change across most (if not all) aspects of an organization. This includes strategy, leadership, vision, customer experience and engagement, product or service developments, operations, fulfillment process, funding models for developing digital capabilities, modern architecture, technology, organizational culture, talent, skillset, etc. The digital transformation is often an accelerated form of business transformation that enables organizational agility to react, respond and adapt to changes in a digitally disruptive era. A true digital transformation is an ongoing process where an organization continuously and rapidly adapts to changing customer expectations and digital innovations in the market. This ability to rapidly adapt (to changing circumstances) marks the first and most critical outcome of a digitally transformed organization. Digital enterprises must become very resilient to change. Another key milestone and hallmark of a digital enterprise are to become an innovation hub that can develop new ideas to capture new market opportunities swiftly
The digital transformation is often an accelerated form of business transformation that enables organizational agility to react, respond and adapt to changes in a digitally disruptive era. A true digital transformation is an ongoing process where an organization continuously and rapidly adapts to changing customer expectations and digital innovations in the market. This ability to rapidly adapt (to changing circumstances) marks the first and most critical outcome of a digitally transformed organization.
Organizations may be in different stages of maturity of their digital transformation journey, and not all will see this broad vision of digital enterprise initially. A change is often complex and difficult, and skepticism is the norm in the initial phases. It creates anxiety amongst employees and leadership alike. From strategy to execution, often the most difficult task is to get over the initial hump. The biggest challenge is to fund a program of that size, culture change, talent hunt, technology modernization, and ability to deliver on its promise, are all large risks and potential of failure that no shareholder is willing to take on. Most organization opts for a smaller and contained accelerator to try and test its value, and to showcase a business model to executive leadership to develop a consensus with shareholders.
At the heart of the digital transformation is leadership’s vision and organizational culture, and their willingness to adapt
Each organization will grapple with defining the clear purpose and objectives for their transformation — Is it improving customer experience? or innovating new digital products? or increased profitability? It could mean many things to different people. However, at the heart of the digital transformation is leadership’s vision and organizational culture, and their willingness to adapt. A great vision and culture can bring many benefits together, like customer centricity, best customer experience, product innovation, automation, and modern technology. But without that vision and culture, it may quickly become a failed attempt.
The views expressed are my own and do not represent any organization. I aim to have respectful discussions that further positive change as we navigate unprecedented technological transformation. Change is constant, so my perspective may evolve over time through learning, testing, and adapting to new information.
