Have you ever spoken to a “digital transformation” enthusiast? The first thing you will notice is the person cannot exactly define digital in any meaningful way. The second thing is that the discussion will invariably include citation of popular consumer mobile apps, portals, and other things such as Facebook, Google Glass, the Internet of Things, PayPal, Pinterest, TripAdvisor, and Uber.
The third, and perhaps the most intriguing, is their obsession with customer engagement. The focus is so extreme that it pretty much excludes anything that is perceived not to be glaringly customer-related. This fixation, which means a sole focus on the front-end sales and marketing engine, fails to take into account that a digital strategy must pervade the entire value chain – customer engagement, business processes, technology operations, and organizational policies – and that a success requisite is transformation of the less attractive, unseen back-end.
Unfortunately, buyers have limited spending appetite and budget, and CIOs coming under intense pressure to add business value are vigorously channelizing these budgets into development of front-end-centric digital initiatives. I believe this myopic strategy is flawed, and will show its glaring weakness in the coming years.
Consider the impact of a sole focus on front-end digital initiatives without augmenting business process or technology operations. For example, a bank’s mobile sales force can open a customer account in 10 minutes or sell financial products using a banking mobile app, However, as the back-end operations and other business processes needed to make the account functional are still the same, the customer does not get the true benefits of this banking mobility. Or, when an online retailer develops a mobile app where customers can place orders, but the back-end processes and technology operations are same as customers placing an order through the online portal, the availability of one more access point for customers does not fundamentally impact the business.
Enterprises need to go full hog to leverage the disruptive power of digital services. A piecemeal approach will eventually hit a wall, and business leaders’ frustration will grow. To ease this, business leaders must understand and collaborate with the operations department, and push the operations manager to introduce digital transformation within the core technology operations and business processes.
Customers have always been at the center of the universe for successful companies, and digital transformation will not change that. However, extreme customer-centricity without suitable investment in back-end operations or business processes that drive customer delight will result in a grand failure. Enterprise buyers need to judiciously invest in technology solutions across their business and internal processes to create a vibrant “digitally aware” organization that understands the impact of this transformation. The impact should be pervasive and touch upon each aspect of the business.
Digitization of business processes across an organization presents a tremendous opportunity to leap ahead of the competition. But make no mistake…it’s a high investment, high risk, and high return game. Organizations that have the required mettle to make technology pervasive in their front-, middle-, and back-end operations will not only survive, but thrive.
