In “Unleash Your Digital Business”, I highlight the need for all companies to embrace digital business as a new business model – one in which the nature of the value exchange with customers is fundamentally changed. Since then, CIOs frequently asked me what they should be doing to help their firms become a digital business.
The answers lies in the difference between Business Technology (BT) and Information Technology (IT). BT focuses on the systems, technologies, and processes to win, serve, and retain customers. Whereas IT focuses on the systems, technologies, and processes to support and transform an organization’s internal operations. To become a digital business CIOs must adopt the BT agenda.
Our research on digital business highlights the need for the organization to focus on six core digital strategies that drive digital customer experience and digital operational excellencein support of customers. Each of these strategies is an integral component of the CIOs BT agenda:
Digitize the end-to-end customer experience
Digitize products and services inside the customer’s value ecosystem
Create trusted machines
Digitize for agility over efficiency
Drive rapid customer centric innovation
Source enhanced operational capabilities within a dynamic ecosystem
Our report lays out many commonly-encountered obstacles to mobile banking execution success and how digital teams can overcome these obstacles. Here are a few of the areas the report looks at:
Overly ambiguous — or nonexistent — business goals. Clearly articulated business goals should be part of a bank's mobile strategy. But a successful road map also lays out the business objectives and records specific goals for each initiative. As one eBusiness executive at a bank told us, "We literally have a section we call 'What's in it for us?' and we use sticky notes to write out what we think we can gain from each action."
Legacy systems and back-end integration. Technology may well be the largest obstacle to executing a mobile banking strategy — especially for larger, traditional banks. As such, successful mobile road maps need to outline how initiatives will plug into existing or soon-to-come platforms and systems.
It's been clear for years now that small business startups don't build massive IT departments and big operations teams. Instead they focus on the capabilities which truly differentiate them in the marketplace - their strategic capabilities. They hire experts in these capabilities as employees and continue to improve their differentiation. At the same time, they look to source their more generic business capabilities from business partners and technology service providers.
We are going to see a seismic shift in big business in the coming years: there will be an increasing appetite to source generic capabilities from vendors and business partners; at the same time CEOs will focus increasingly scarce human capital resources on improving their strategic capabilities - the capabilities which give them a competitive edge.
While digital technology will remain at the heart of these strategic capabilities - leveraging cloud, big data analytics, mobile and social - the majority of technology services will be sourced from partners and vendors. The company's own technology resources will become more and more intensely focused on developing unique systems of engagement around strategic capabilities.
While Social Business continued to evolve in 2012, 2013 will see the emergence of digital business as a new strategic theme for many firms. What's driving this shift and what does it mean for CIOs, CEOs, and chief digital officers?
The Communications Evolution
Communications continue to evolve. Consider how humans have transformed communications over the centuries: signal fires; semaphore; Morse code; the telegraph; the telephone; telex; fax; email; SMS; Facebook; and Twitter. I have no doubt that this evolution will continue in 2013 and beyond. Perhaps beyond 2013 we will eventually achieve the ability to communicate our thoughts directly — whether we’ll want to is a different question. As people the world over learn to use new social networking tools, they drop older tools that are no longer useful to them. Regardless of where you are in your personal communications evolution, the undeniable truth is that over the past decade we have significantly changed how people communicate; we are no longer dependent upon email. But social tools and 24/7 mobile access have not removed the complexity or decreased the volume of information we must process. Time remains our most precious resource and we’ll always seek ways to use it more effectively — but social tools are not necessarily the silver bullet we might think. In 2013 we need to rethink business processes to take this new communications paradigm into account.
Whether you’ve been naughty or nice this year, you probably have a wishlist for your business. We thought it would be fun and interesting to find out what some of your wishes are, so the Digital Banking Strategy team at Forrester reached out to some of our eBusiness clients at banks and asked them “What one ‘wish’ do you have for your team’s digital banking efforts or strategy in 2013?”
Here are some of the answers we got back:
“We wish we could transform every branch and call center employee into an advocate for marketing and educating customers on our digital capabilities.”
“I wish that our execs would understand how understaffed we are.”
“I wish we had better live help for our digital banking customers.”
“I wish I knew which area of mobile payments to focus on and what is going to ‘shake out’ and actually ‘stick,’ so to speak.”
“We wish for a digitalized branch pilot that focuses on advice and guidance.”
“We wish all of our customers – including the most skittish and skeptical – would try out our digital banking capabilities (online, mobile, and tablet)… and those who already use them would do so even more regularly.”
“I wish I could spend 3 hours with our CMO – and have his full attention – to show him how much impact our online and mobile banking efforts have.”
“I wish we could sort through the clutter of mobile wallet vendors and offerings to know which will actually pan out.”
“I wish I could snap my fingers and have great secure site search and intelligent cross-selling on our secure site.”
Royal Bank of Canada (RBC) leads all of North America.RBC again took the top spot in the 2012 Canadian Bank Digital Sales Rankings, scoring 77 out of a possible 100. It continues to tweak and improve an already good design; the bank started a major redesign in 2009. RBC continues to excel in areas big and small: For example, the firm presents fulfillment options in an easy-to-read format (see screenshot below). In 2012, Royal Bank of Canada improved its navigation, content, and online application functionality, and its score for 2012 reflects that improvement.
Citi and Wells Fargo top the US banks.Citi and Wells Fargo topped Forrester’s 2012 US Bank Digital Sales Rankings by delivering on multiple levels. Both banks combine good usability with exceptional account-opening processes. For example, Wells Fargo uses presentation best practices to make its checking account fees clear to customers and prospects (see screenshot below).
Last year Netflix attempted to shift its business strategy to focus mainly on streaming video. Although I wasn’t present in the boardroom discussions, it’s a reasonable bet that Reed Hastings and his team had decided the future was online streaming and that physical discs were a dinosaur. Since the war for content would be fought over streaming, Netflix would focus on adding value to its streaming customers and spin off the disc customers. On the surface this seemed to many a reasonable strategy, especially since Netflix reported that its digital streaming customers and the disc-in-the-mail customers were mostly not one and the same. So Netflix execs crunched the numbers and decided this was the right move for them. Perhaps they had hoped to spin off the disc side of the business to raise some capital. Whatever their thinking, their strategy choices left some gaping unanswered questions for observers like me: