Stripping it of all technical jargon and definitions and bringing it down to simple words, Digital Transformation is the use of technology to radically improve performance or reach of enterprises. This can be done by using digital technologies such as cloud, analytics, mobility, social media and Internet of Things (smart embedded devices). This needs to be done so that you can change and improve customer relationships, internal processes, and value propositions. To achieve this, customer experience, operational processes and business models are the three key areas that should be the focus of any digital transformation initiative.
Reimagining the way these three key areas are going to play out in your organisation is not something that can happen bottom up. It must be driven from the top. The focus should be more on the 'how' than the 'what'. Which brings us to the point that developing leadership capabilities in an organisation is as important, if not more, than developing and implementing digital capabilities in the same organisation. Leadership is essential and the key to digital transformation in reimagining, re-envisioning and driving change in how the company operates. And that is something which is a management and people challenge and not a technology one. The most important thing that leaders in an organisation should remember is that the focus should be on reinventing the business through technology, and not on the technologies themselves.
Coming back to developing the digital capabilities in the organisation, we need to look at some key areas in greater depth. These three key areas are:
1. Customer Experience
2. Operational processes
3. New business models
Here I will examine in some detail the components that are required for building up the customer experience capabilities in the organisation.
A compelling customer experience
It’s all about creating compelling customer experiences. This is the age of contextual mobility. Your customers want to experience your brand whenever, wherever and however they want it. And as the marketing folks like to say, your customer decides your brand, not you. You need to design the customer experience from the outside in. Your customer experience needs to be designed around the customer. This is best addressed by creating customer journeys, engaging in design thinking workshops and arriving at the optimum digital experience for your customers that will provide the most engaging experience. This is a very important part of creating the entire customer experience and you will be deciding on how best to create reach and customer engagement through various digital channels during this phase.
Know your customer
You have to put customer data at the heart of the experience you are creating. Quoting Sun Tzu, from The Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”
From the first line in the quote we can see that it is vitally important to know your customer in addition to knowing yourself. Most people are like the middle part of the quote, they know themselves very well, but not so much their customers. They need to work to get to the first part of the quote. And needless to say, if you are like the third part of the quote, then you would be better off not being in business!
The path to getting to know your customer is the one that is built using data. You have to develop the capability to collect data about your customers from every possible available source, at every possible customer touchpoint. You can collect data on their likes, dislikes, preferences, purchasing behaviour, browsing patterns, opinions, thought processes etc. This can be done using the tools and platforms available today, under the applicable privacy policies and permissions as may be relevant in each context.
Data and Analytics
You have to make data and analytics the lifeblood of your customer experience. Digital Analytics tools can deliver optimized and relevant actions at the point of impact to enhance your customer experiences. Your objective should be to be able to create a personalized experience for your customers. You will be able to create these personalized interactions if you have the capability to have a comprehensive view of your customer and have the capability of carrying out near-realtime analytics to anticipate customer behaviour and respond with precision across delivery channels to address your customer’s needs.
To develop a comprehensive view of your customers, you have to develop the capability to effectively analyse the large volume and variety of customer data that you collect. The sources of this data are point-of-sale (POS) systems, online transactions, social media, loyalty programs, call-center records, weather data and more. This analysis should be able to provide you with insights that will enable you to gain a deeper, more complete understanding of each customer and create a smarter experience. You will be able to increase the precision of customer segmentation by analyzing customer transactions and shopping behavior patterns across all channels. Using advanced analytics and scoring you will be able to make automated, optimized real-time action decisions and by knowing where a customer is you will be able to deliver relevant real-time offers based on that location. This ability to predict and influence consumer behavior by offering relevant products to your customers will enhance your customer experiences.
The diagram below shows a high level overview of the data flows and the components involved in creating a realtime, personalized, contextual mobile experience for the customer.
The focus in the above diagram is the customer, represented by the desktop, laptop and mobile devices.
- The digital experience is provided by your company website, portal or an ecommerce site. Your customers could be engaging with your website or ecommerce portal from any device, at any time and from any location.
- The customer master data will contain all the profile data of all your registered users.
- The customer’s transactional data will be available in the transactional data stores.
- The data on your customers browsing and engagement with your site would be available in the customer behaviour data stores.
- Your customers will also be engaging with other social media channels.
- Their behaviour and conversations on social media can be captured using the right tools and customer profiles and these will be available in the social media data stores.
- Your analytics engine will be able to provide customer analytics, predictive customer intelligence, a 360 degree view of your customers and various other insights based on all the data that you have collected. The data to this engine will be the inputs from steps 2, 3, 4, and 6 as described above.
- The input to the campaign management and digital marketing module will be the actionable insights and next best action provided by the analytics engine. The relevant campaign/offer/action can then be created in realtime by the digital marketing engine.
- This campaign/offer/action is then made available to the customer on the relevant device, at the time and the location, and in the relevant context, in realtime.
This is a very high level view of the components that go into providing your customers with that compelling, personalized, contextual experience. You can innovate no end with the visual design, the information architecture and the engagement experience that you provide your customers. But just remember, it is the data and the analytics that holds everything together and drives the entire experience.
Your customer is going to keep coming at you with the ‘Whenever, Wherever, However’ demand and you will need to keep responding. This is an exercise that can never get over.
Keep on innovating. It ain't over - even when the fat lady sings!