A recent global study suggested that those reporting particularly good returns from their digital investments had a number of things in common. One quite obvious differentiator was an acute appreciation of the role of digital channels in customer engagement.
Another important trait of high performers in the study was a big emphasis on digital techniques to optimise business operations. The idea here is to strengthen and streamline the way the organisation operates internally, and the logic relates to a lesson learned in the dot-com era. This says that you should never let the front end of the business make promises that the back end can't keep, because that's a sure fire way of destroying customer confidence.
The principle highlights the dangers of considering 'digital business' and 'omni-channel engagement' as synonymous, when the latter is really just a subset of the former. Implementing a coherent customer experience across the web, mobile, social, etc is of course important, but it's not enough.
If you think emphasising the importance of operations is too 'old school', then it's worth taking time out to consider your own experiences as a customer. The chances are that some of the most frustrating or even infuriating encounters you have had with suppliers stem from a lack of functional and process integration in the core of the organisation's business.
If customer service teams and various back office departments involved in fulfilment and support don't work together well, that great initial digital experience is soon forgotten. All you can think of, and will probably ultimately remember and tell other people about, is the hassle and disappointment you have had inflicted on you.
Telcos arguably provide some of the best (or worst?) examples of broken and disjointed processes that lead to us pulling our hair out. But they certainly don't have a monopoly when it comes to what sometimes amounts to customer abuse - long waits, continual hand-offs, conflicting information and a general failure to respond in a timely, efficient and effective manner.
With this in mind, what are the key requirements when it comes to implementing digital transformation in the back-end of your own business?
Automation within silos is something we commonly see, and that can be useful for freeing up resources and improving response times in particular areas. The abovementioned omni-channel approach can also obviously help. But building on that last point, the main imperative is to broaden your thinking when it comes to the kinds of integration that matter.
The first step here is to make sure your omni-channel strategy doesn't just cover digital engagement. Coordinating customer interaction across digital and non-digital channels is also critical. In an ideal world, the customer should perceive a joined-up experience whatever mix of channels they connect through. This includes any combination of your website, mobile apps, social media groups, call centre agents, high street retail outlets, field representatives and, not least, your partners and agents.
If you have been in the industry for a while, you will remember we were talking about all this back in the dot-com era. An old conversation, maybe, but equally important, if not more so today, with many organisations still falling short. The recent tendency for IT vendors to define omni-channel as primarily about technical integration doesn't help. Let's be absolutely clear that it's about business integration - clever software is simply one of a number of enablers.
Moving on from this, there is then a second dimension of integration to consider that's orthogonal to the channel discussion. Things like those frustrating hand-offs and a lack of 'institution memory' (i.e. customers having to explain their situation or repeat the same requests over and over) are the symptoms of things not working well across internal teams or departments. Disjoints between sales, fulfilment, customer services and billing are troublesome enough, but when you have multiple sales teams, e.g. retail vs call centre vs online vs partner, and similar fragmentation in other areas, the customer suffers even more.
If any of this sounds familiar in relation to your own organisation, then perhaps all that fancy digital capability on the front end of your business effectively amounts to little more than a smokescreen, hiding those inefficient and ineffective silos of operation that exist behind it. The question is then what happens when the smoke clears, and the customer realises that they aren't dealing with a modern digital business after all, just one that's apparently thrown up a few fancy digital features to draw them in. That may not have been the conscious intention, but it certainly can be the impression often created.
Pulling all this together, the overriding lesson is to make sure you take a balanced approach to digital investments. It's all too easy to allow more glamourous front end projects to suck in all of the available funding for your digital transformation programme. Of course you can't tackle all of the organisational and cultural challenges that have their roots in 90s style mind-sets, operational processes, business structures and lines of demarcation, so you need to prioritise. The trick is to think in terms of the customer lifecycle or 'journey', and identify the back-end capability that's particularly important to meet promises made by the front-end along the way.
Here's one last question to focus your mind: Would your customers prefer reliability delivered via a finite set of channels, or the pain of battling with broken processes and being constantly let down through the digital medium of their choice?
By Dale Vile, Freeform Dynamics Research Director