Feb 9, 2016

How to Bring About a Customer-Experience-Focused Digital Transformation, by Sameer Dhanrajani

Gone are the days when implementing a digital business meant centralizing information and automating tasks to achieve optimization. “Digital” now refers to a new way of looking at business, a completely transformative approach of the enterprise business model, promising far-reaching effects and readying the business for a new age of tech-savvy customers and their digital-centric lifestyles.

There are any number of factors which could lead to digital business implementation. It could start from the drive to optimize or completely redesign the supply chain or from the objective to better manage the finances of the business. It could be triggered using the latest acquisitions of technically enabled startups or using alliances with a partnering tech firm for a joint venture. We can be sure that digital transformation is going to continue being adopted en masse, and none would be a bigger catalyst to call for digital transformation than the rising need to provide better customer experiences.

The evolution toward a complete digital transformation is witnessing a step-by-step moving trend, where the transforming businesses showcase the following traits:

Instead of the older trend of implementing back-office automation, marketing initiatives are now applying technology first at the front end to influence the customer experience. This usually involves carrying out vanilla implementation of tech upgrades which can be executed and updated quickly.
The second step toward digital transformation is to decrease the reliance on off-the-shelf technology-integration packages and move to more customized, emerging tools and techniques. This is the point where businesses can create their own unique digital value proposition.
The final phase of digital transformation involves completely rethinking products, features, and services per the expectations of the ever-evolving digital customers and consequently discovering new growth opportunities.

Executing the digital transformation initiatives

Not only is the digital business completely different from the legacy enterprise model, but even implementation measures of the digital transformation are different from those of the older perspective of digital business. Previously, businesses used to focus on tasks, which meant digital implementation involved optimizing the task. For example, previously, calling for increased customer engagement meant automating marketing tasks to cater to bulk customers. This might optimize the marketing task itself, but it does not improve on the conversion numbers. The new digital philosophy focuses on customers instead of the marketing task, which means selling to them as individuals instead of looking at them as mass-market segments.

When customers become the focus, it also involves changing the life cycle of customer relationships. Now the relationship doesn’t end with a conversion or the purchase of a product. It continues as extended support and further analysis of the customer buying-and-usage metric. Therefore, companies need to transition from a product to a service company. It is more economical and easier to convert existing customers for another sale than it is to gain new customers. This is evident with top companies moving to subscription models and away from regular product-purchasing model.

The organization structure has also undergone major changes. Apart from the traditional approach of recruiting IT project managers and marketing managers, businesses are bringing in cognitive scientists, anthropologists, and even psychologists for deep insights on customer expectations, in addition to hiring cross-industry experts and transformation managers to quickly implement the new digital perspective.

The traditional implementation approach of project management involving project definition, creation of the finalized design document, development, and end-user deployment would not work in the current scenario. The project management itself has to undergo a change from defined-objective oriented to discovery oriented, where direction and approach are decided by building hypotheses, developing theories, and cycling through multiple iterations of launch-test-modify operations. This means the budgets are flexible and decided late into the implementation.

Finally, a discovery-based project-management approach means taking more risks, which can be backed only by a flexible budget. This means there needs to be wiggle room in the budget with the focus on finding new and valuable implementation methodologies which lead to breakthroughs in performance metrics instead of marginal incremental improvements. At a later stage, these will more than compensate for the extra budget.

Successful approach to a customer-experience-focused digital business transformation

Build smaller core teams: One of the reasons that startups are able to evolve quickly to disrupt their markets is because of smaller teams working in an agile manner. This needs to be applied during a digital transformation. Large teams move slowly and lead to a lot of time spent in achieving unidirectional inclination.

Engage cognitive scientists and behavioral experts: Traditional methods of just collecting profiles and personal traits of customers are not going to bring about breakthroughs. Breakthroughs require deep insights into how customers use the products and services in their day-to-day lives. This means recruiting cognitive and behavioral scientists. The richer the information on customer experience, the better the competitive advantage a business can have.

Implement agile marketing principles: Product releases should be incremental and evolutionary, leveraging launch-and-learn methodology, instead of using big-bang plans. Keeping the iterative steps smaller helps lower risks.

Growing richer insights drives differentiation

It would be wrong to view the digital transformation as a one-time effort. It is rather a series of implementation measures committed in a perennial manner. Transformation is not a process which takes the business from one model to another but an adoption of a new ideology of functioning. Since transformative measures will keep coming around in the future, it becomes imperative for companies to build digital transformation as a core competency. In the future, the competitive advantage will have evolved into the ability to quickly and constantly build digital transformation with the onset of better and richer insights into customer experiences.

Opinions expressed in this blog are of the author and may not represent Cognizant’s point of view.

Sameer Dhanrajani

Sameer Dhanrajani is Business Leader at Cognizant Technology Solutions. In his capacity, Sameer is responsible for leading end to end business spheres…