Sandeep Kumar, Sr.VP & Head Global Consulting, ITC Infotech.
getty
A popular movement that has captured today's world is the aggressive digitization of companies to spur fast-paced growth and maximize productivity. Yet the north star remains universal—to outperform competition and win customers by putting modern digital technologies to work. What appears to be lost on many companies, however, is the logical framework and the use of specific apparatuses critical to driving digital transformation. In this pursuit of digital advancement, many instances of companies going astray have been observed.
A McKinsey study highlights that companies usually have tall benchmarks for their digital initiative effectiveness. Companies that actively indulged in transformational efforts expected annual growth and cost efficiencies of 5% to 10% in the succeeding three to five years. The glaring flaw in this outlook is that creating sustainable value from digital investments is acutely complex due to multiple touchpoints in an enterprise that stands directly in the face of digital transformation.
Most companies approach digital transformation as a piecemeal exercise without seeing the big picture. A commonly spotted pattern is the application of tools and technologies to serve an enterprise's present needs and not necessarily the future. But as challenges become more apparent, the use case of those technologies can become obscure. For this reason, companies need a framework that illustrates the specific pathways to driving a truly digital enterprise while optimizing product, consumer, partner or employee strategies.
The 4-D Pathways To Forming A Digital Enterprise
What’s good about the ongoing digitization boom is that any company with the resources to benefit from the "plug-and-play" model is free to kickstart digital initiatives. However, larger legacy organizations require an intricate strategic orientation to ensure transformations don't result in failures. According to a BCG study, 70% of digital transformations go off track, with grave consequences. Effective change management indubitably plays a part in aligning the stakeholders to a large-scale transition from outdated technologies. Yet preceding change management is four interconnected pathways that determine the successful rollout of transformation initiatives.
1. Constructing The Digital Core
The monolithic and bulky infrastructure of legacy systems is a kryptonite that often holds them back from fast-paced progress. A transition is imperative to stay ahead of the curve. Legacy enterprises could explore ways to move platforms to the cloud or a full transfer of on-prem infrastructure to a Cloud-based one. Built above the infrastructure are platforms made with technologies like automation, IoT, AI and ML—and more recent inventions like the metaverse—that increase the speed to market and provide an armory of advanced capabilities.
2. Build In Digital Intelligence And Analytics
A Gartner study of 2022 finds that only 14% of organizations have a 360-degree view of their customer. Companies falling back in this area might fail to optimize business decisions that hold the customer's best interest. Contextual and timely intelligence not only helps analysts understand the background of behaviors and influences of target groups but also helps elevate experiences with hyper-personalization. Moreover, an intelligence and analytics model separates you from the traditional mass marketing approach. Instead, it treats every audience as a "market of one" and customizes experiences
3. Design Digital Value-Led Experiences
With in-depth analytics arises a profound awareness of customer pain points that can be addressed with intelligent experience design. When harmonized, digital technologies and platforms can drive a differentiated and immersive experience for customers. Digitization helps companies give a new avatar to processes. For instance, automated self-service experiences like chat-bots, conversational AI or a 360-degree customer servicing platform can deliver the same impact as a support executive. As a result, a faster feedback loop is created that resolves issues at speed and scale.
4. Unlock Value Through Digital Solutions and Transformations
The perception of business problems and their resolution methods have transformed multi-fold, thanks to modern technologies. These technologies provide a medium to redefine services, products, channels and processes. Challenges that only humans could resolve earlier are today being resolved by digital solutions designed to address specific use cases. The insurance industry has mightily benefitted from digitizing operations. The bulk of their work is done through self-service engines. This way, digital solutions help unlock value by remodeling the way companies engage with customers.
Case Example: Digital CX Transformation In Retail
Customers that interact with businesses only look for two things: to be understood and delighted. Specifically, in the retail industry, the scope to optimize customer experiences is high due to the sheer volume of interactions that are generated daily. Using the digital pathways framework, here is an example of bringing out different layers of capabilities needed to shape the customer experience.
• A Single View Of The Customer
Business objective: To create a holistic customer information record that provides advanced analytics for optimized business decisions.
Tools: CRM, customer data hub, customer knowledge and insights.
Infrastructure: Cloud-hosted data, analytics and customer data applications.
• 360-Servicing
Business objective: To realign value chains to be customer-driven and accelerate the resolution of issues.
Tools: 24/7 support, product feedback loop, social media listening.
Infrastructure: Cloud-hosted data, analytics and customer service applications.
• Loyalty Creation
Business objective: To reward customers at all touchpoints and maximize loyalty through targeted campaigns.
Tools: Vouchers, integrated loyalty and personalized campaigns.
Infrastructure: New-age cloud/SaaS loyalty applications.
• Integrated Customer Experience
Objective: To provide a seamless omnichannel experience by digitally enabling staff, stores and POS services.
Tools: Digital content hub, proximity marketing in-store, AR/VR, chatbots.
Infrastructure: Cloud-led marketing, user interaction and content management tools.
• Unified Commerce
Objective: To enable inventory, order visibility, online buying and in-store pickup abilities.
Tools: E-commerce tools, API integration platform, mobile enablement.
Infrastructure: SaaS-led commerce applications.
The digital revolution has presented businesses with a novel way of operating and optimizing experiences. The digitized world is full of connected pathways that help magnify varying actions and extract valuable nuggets to nurture positive experiences. As a chief digital officer or digital architect, it would be helpful to use this framework and assess whether your capabilities are truly built to last while establishing digital competencies that help you stay unique and compete better.
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