12 critical components of digital transformation
At the PegaWorld event in Las Vegas, customer experience expert and author Blake Morgan shared the 12 elements necessary for any business looking to undertake a digital transformation. Paul Snell reports
Customer experience (CX) is intrinsically linked with the concept of digital transformation. As organisations attempt to meet shifting customer expectations and demands, they need to evolve and adapt internally.
According to Blake Morgan, author and CX leader, there are three main trends forcing organisations into transformation programmes.
The first is the growth of the experience economy. Customers are investing more in experiences rather than things, in part because they want to broadcast the experiences digitally.
Secondly, power is shifting from companies to customers. Bad experiences are exposed more quickly (and more brutally) in public, and companies are on the back foot.
Finally, there is an expectation the connection between the customer and technology should be seamless.
Those companies that have been able to adapt to these changing expectations have seen huge benefits. According to a study by MIT, businesses that embrace digital transformation are 26% more profitable than their peers.
“We have to evolve to what is going on today, because the alternative is not good,” says Blake. “We have to be the company willing to run toward change, and willing to do things we didn’t think we’d have to.”
As part of the research process for her upcoming book, The Customer of the Future, Blake has identified the 12 necessary components of any digital transformation programme, and shared them with the audience at PegaWorld 2019.
12 crucial elements every digital transformation programme needs to focus on
1. Customer focus
“It’s not the companies with the best technology that win, it’s the companies with the best customer experience mindset,” says Blake. Amazon was repeatedly identified as a model of great CX, and when Blake visited the company for her research she was hoping to uncover the secret sauce behind it. She didn’t find any. What she did find was humble, hard-working staff that were committed to the customer, with a clear view that their role was to cater to them – no matter if they were an executive or worked in the shipping department.
2. Organisational structure
Many companies are not built to facilitate sharing data or information. These siloes are the biggest hindrance to digital transformation because it’s tough to get going when the structure is not optimal.
3. Change management
Blake says the biggest stumbling block she hears repeated is that people dislike change, and that culture is one of the most ignored factors in any digital transformation. She warns: “You can have the best technology and all the money, but if you don’t have employees bought in and willing to be uncomfortable, you don’t have what you need to go through a digital transformation.”
4. Transformational leadership
Digital transformation demands transformational leadership – leadership that inspires and makes people want to change. Blake identified five chracteristics of the transformational leader.
- Energy for influencing change: Positive, caring, motivational, and superior communicators.
- Neighbourly: Good listeners, approachable, flexible, humble, and empathetic.
- Demonstrate good judgement: Agile thinkers, decisive, and forward thinking.
- Problem solvers: Creative and innovative.
- A consistent say:do ratio: Transparent, trustworthy, and honest.
5. Technology decisions involve the whole c-suite
The new landscape means technology leaders have to listen to, understand and empathise with all aspects of the business, as well as be able to have an open dialogue around decision-making.
6. Integration of data
Most companies are not maximising their use of data because it isn’t built around the customer. “Companies don’t build to make customers lives easier and better, they build to make their own lives easier and better. These companies will simply not exist in the next few years,” Blake says.
7. Internal customer experience
Blake says the best companies for customer experience are the same as those that appear on the best or top companies rankings. Those that are good to their employees are good to their customers. Employee experience expert (and Blake’s husband), Jacob Morgan, came up with three foundations of an employee-centric company.
- Culture: How do they make people feel?
- Technology: Employees want the same level of technology they experience in their personal lives.
- Physical space: When you feel good at work, you produce good work.
8. Logistics and supply chain
Any digital transformation project will have to involve logistics, and examine the speed at which you get products to your customers.
9. Data, security and privacy
This has to be taken seriously. As technology such as AI becomes more commonplace, companies will need to supplement it with a code of ethics.
10. Evolution of products, sales and process around delivery
The growth of the internet of things and its potential to revolutionise factories and reduce waste, will have a knock-on impact on how our products and services evolve and are delivered.
Blake rejects the multiple online definitions of digitisation. For her, it simply means becoming a technology-based company, rather than using paper-based systems.
It feels so good when an experience is personal because most experiences aren't. Companies often have no idea who we are, what we want, or what we’ve bought from them in the past. “If we can be the company that recognises them better, we’ll win,” Blake says.
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