Digital transformation investments are ultimately about business survival through disruption. Such investments have a direct impact on customer expectations and go beyond the traditional ROI. The business case for such disruptive investments is the focus of my upcoming report, Build Your Digital Transformation Business Case Around The Customer And Revenue Growth. The scope for disruption spans the entire customer life cycle, affecting everything form the supply chain to after-sales support. The key takeaways from this report:
Disruptive transformation must be viewed as a strategic investment. The real value of digital transformation investments relates to long-term revenue growth, not short-term technology ROI. Bolt-on digital projects do not change the fundamental value relationship that you have with your customer. To maximize the impact of digital investments, business and technology leaders must learn to value such investments through the eyes of the company’s customers.
A classic ROI calculation is neither always feasible nor desirable for digital investments. Digital transformation changes business processes and models. ROI works for single digital initiatives, but not for shifts in business models. Digital investments aimed at disruptive change across the enterprise challenge traditional ROI calculations. Attributing benefits like customer satisfaction, group productivity, and group revenues — let alone business survival — to a single digital investment is impossible because so much of the impact of digital transformation is cumulative.
Rule #1. Don't just jump into creating a hefty enterprise wide Business Intelligence (BI)
Business intelligence and its next iteration, systems of insight (SOI), have moved to the top of BI pros' agendas for enterprise software adoption. Investment in BI tools and applications can have a number of drivers, both external (such as regulatory requirements or technology obsolescence) and internal (such as the desire to improve processes or speed up decision-making). However, putting together a BI business case is not always a straightforward process. Before embarking on a BI business case endeavor, consider that:
You may not actually need a business case. Determining whether a BI business case is necessary includes three main considerations. Is it an investment that the organization must make to stay in business, should consider because other investments are changing the organization's IT landscape, or wants to make because of expected business benefits?
A business sponsor does not obviate the need for a business case. It may be tempting to conclude that you can skip making a business case for BI whenever there is a strong push for investment from the business side, in particular when budget holders are prepared to commit money. Resist this impulse whenever possible: The resulting project will likely suffer from a lack of focus, and recriminations are likely to follow sooner or later.
Are you working as a CX pro in a B2B company? And do you find it challenging to make the case for your CX program? You are not alone.
In fact, many CX pros in B2B companies we spoke with struggled to get funding for their efforts --because they can't isolate the role of CX in driving financial success, they lack insight into how different clients’ experiences affect purchasing decisions, or they don't gather sufficient data about these experiences.
CX professionals managed to overcome these challenges by creating the preconditions for success. Following their lead, you should:
Rethink metrics and analytics to link CX to financials. CX pros need to look beyond the usual metrics like revenue or NPS to find the metrics that help link CX to business success.. For example food packaging company Tetra Pak found that a custom partnership index was a better predictor of sales and volume growth than other metrics they tested.
Deanna Laufer and I are collaborating on a new report on how to make the case for customer experience in B2B. And we'd love your inputs.
How will clients benefit from this report?
With longer sales cycles, fewer customer accounts, and an abundance of client roles and influencers, B2B companies are challenged in making the link between improving customer experience (CX) and financial results. But without this link, B2B companies will struggle to get adequate funding to sustain their CX programs over the long term. To help CX professionals at B2B companies overcome challenges to justifying their CX programs, this report will explore:
What do customer and business data CX pros need to collect to support their business cases?
Which are the right metrics for modeling the relationship between customer experience quality and business success?
How can CX pros apply their models to proactively improve business outcomes?
With the holidays—and a whole lot of 2015 strategic planning activities—behind us, you’re probably have a few gifts you’d like to return and hopefully, a few gift cards you’d like to make use of. If you were really good last year,Santa left you the budget needed to develop or enhance that mobile insurance app or site you’ve wanted.
But how do you spend that budget so that the app or site that results doesn’t disappoint like those sea monkeys or x-ray glasses that you also once wanted?
It’s not hard to uncover this kind of disappointment in the mobile insurance marketplace: Mobile services that are little more than insurer bill boards, require too much data entry from users, and lack features that users have come to expect from banks, retailers, and airlines. To play catch- up with competitors and quell internal political concerns, many insurance eBusiness and technology management teams were put on the spot, rolling out mobile functionality without considering if it solved a problem for customers. While this approach addressed the business urgency, these hastily -built mobile insurance apps often fell short.
When it comes to data investment, data management is still asking the wrong questions and positioning the wrong value. The mantra of - It's About the Business - is still a hard lesson to learn. It translates into what I see as the 7 Deadly Sins of Data Management. Here are the are - not in any particular order - and an example:
Hubris: "Business value? Yeah, I know. Tell me something I don't know."
Blindness: "We do align to business needs. See, we are building a customer master for a 360 degree view of the customer."
Vanity: "How can I optimize cost and efficiency to manage and develop data solutions?"
Gluttony: "If I build this cool solutions the business is gonna love it!"
Alien: "We need to develop an in-memory system to virtualize data and insight that materializes through business services with our application systems...[blah, blah, blah]"
Begger: "If only we were able to implement a business glossary, all our consistency issues are solved!"
Educator: "If only the business understood! I need to better educate them!."
I recently took some holiday leave and saw two small, but clear examples of where mobility changes the economics of IT. The first was in a restaurant where the wait staff used their own smartphones and a simple order taking app. There was no expensive mobile platform for the restaurant to purchase in order to use this system. There was no expensive training program in place to teach the employees how to use the software. They simply bring along their own phone, download a free app to their device and start working.
The software is intuitive enough that any training required is done by their fellow staff members during shifts. What’s interesting about this example is that using mobile devices for taking restaurant orders isn’t new – but using employees own devices is. Previously, the expense incurred by restaurants having to purchase proprietary devices meant that only high margin operations could afford to use mobile order taking systems. And loss, theft or damage of the devices was not only expensive but also proved to be a sticking point for employer/employee relations.
The second example provides a sharp contrast. It involved a trip to a museum and the use of the audio commentary service. Though almost every visitor to the museum now has a smart phone device, an old proprietary hand held device was still in use there. This is an expensive option to operate for a low-margin business like a museum. There are now museums that have recognised this and offer apps on smart phones with capabilities well beyond what the previous dedicated hardware could provide. One such museum is the American Museum of Natural History. It not only uses the rich visual interface of the smart phone, along with the required basic audio commentary services, but it also reportedly helps the user navigate the complex campus using sophisticated wi-fi triangulation.