While cloud is no doubt important for scaling efficiently and improving time to market with new features or capabilities, cloud only addresses the IT infrastructure of a business, not the actual core business processes or operations. In essence, even if you turbocharge and upgrade your IT engine, you must also transform and upgrade the brakes, the steering, and body of the rest of the corporation to fully compete in the digital age.
First and foremost, you have to drive to a frictionless customer experience. In the past few years, many organizations have invested in improving the customer experience throughout the service lifecycle. This intense focus is properly placed. Often, a "customer journey" approach is utilized where the steps and activities (and customer emotions) are mapped out for the entire service process. This analysis leads to far greater understanding of where the pain points are for the customer and where there are inefficiencies in the business.
Even minor tweaks and improvements in user interface design coupled with simpler and more intuitive process steps can significantly reduce customer dropout rates and increase sales. Further, the focus on the true customer needs versus additional (and not particularly relevant) product features usually results in better investment decisions by the corporation. Over time, product offerings and service processes tuned to the customer invariably lead to better business results. While many organizations are having solid success with such customer journeys, these efforts do not necessarily lead to strong competitive positions.
In the digital age, you must not only have a streamlined, easy to use customer interface, but your underlying business processes must be well performing. If your legacy systems require long batch cycles or it is difficult to for staff to navigate multiple legacy interfaces to seek out or input customer information then this inefficiency will hinder your competitiveness. To match your frictionless customer interface, your core business processes should be analyzed end-to-end with the customer service goals in mind. Often, just by documenting and mapping out your business process, it becomes evident where non-value-added steps or unnecessary complexity exists.
This critical process engineering should be done with several principals in mind. First, the process and interface should be designed for outstanding customer experience, but this also has to be done with the productivity of associate and operations staff in mind. These can be separate interfaces of course, to support the different roles and data needs, but they should be designed not just for customer ease of use, but for quality and efficiency of your staff as well.
Often, surprisingly, the net impact of improving associate experience can have greater value than improvement of the customer UX. Organizations must equip their frontline workers with the technology and skills to operate the corporate processes at scale and to operate in a digitally native world. Only then will the digital value of the business flow reach desired goals. The more an organization can transfer back-of-house efforts to front-of-house or customer-facing, the better the yield will be for the organization through increased customer loyalty and sales opportunities. This improved yield should flow directly to financial results in the form of revenue and improved net operating costs.
The intangible bonus is created through implementing modern tools and innovations that drive a better relationship between your customer and your associates. The improvement in customer-associate relationships will increase goodwill with the brand and will drive reoccurring revenue opportunities.
Second, today’s robotic and business process management (RPA and BPM) toolsets enable rapid improvements or re-implementations compared with traditional software development and thus should be leveraged to speed up your process redesign. If you can establish key interactions with your core systems (which are often legacy) through APIs, then you often can replace or augment the legacy interfaces with redesigned capabilities relatively quickly. Since these efforts typically yield substantial productivity and quality gains, you can often achieve ROIs that are superb for IT investments.
The final principle to keep in mind is to simplify the product or feature portfolio wherever possible while doing the process redesign. Many organizations have built up heavily augmented product portfolios with variations and features over time. Often this complexity manifests in organizations responding to bespoke client needs versus common client needs. Development of bespoke solutions creates operational complexity, and it can hinder an organization’s ability to scale solutions and maximize profit. By simplifying while transforming digitally, an organization can greatly reduce the overall transformation effort. Combining simplicity with modern toolsets will enable your transformation to achieve greater efficiency and scalability. It is critical that the organization mine its core processes and understand the proportion of humans in the loop to machine process automation. Organizations that understand their core processes well can then engineer automations that greatly reduce the need for manual work (and resulting errors and defects) and drive greater operating leverage. A key outcome of any digital transformation is the ability to scale much more effectively (at lower costs while maintaining high quality), which then provides competitive leverage in the market.
Applying these principles to your process transformation will give your organization the digital dexterity that is critical for competitiveness in the digital age. By ensuring a more complete digital transformation, where the customer interface is properly backed by a well-designed set of processes that front line associates and operations staff can operate productively, you can achieve the digital dexterity needed to succeed in the digital age.
Jim Ditmore recently completed 5+ years in Europe as COO, leading IT and Operations for Danske Banke. He has worked in IT for more than 30 years and enabled technology to become a competitive advantage at both large and medium shops. You can read more of Ditmore's views on IT at Recipes for IT.
John Rosato has a diverse background that includes experience in finance and technology. Rosato is the CEO of CS Technology and after stepping in last year, has revitalized its brand and modernized its service offering to drive maximum value for clients seeking digital transformation expertise.