The race to digital is heating up in financial services (FS) organizations; increasingly, the engine making this happen is Agile. Why? Quite simply, it is software that makes any financial business truly digital. Organizations are therefore in a rush to become great at rapidly innovating, developing, and delivering new software products to win new clients and retain and serve existing ones.
Oliwia Berdak and I have just published twin reports — one for eBusiness and channel strategy professionals, and one for AD&D leaders — that share our findings on how FS organizations are trying to ramp up their digital innovation capabilities rapidly by leveraging Agile and other innovative models.
Our key finding comes in response to a question: Are you building a digital lab that contains great developers but is isolated from key business leaders and other technology management teams? If the answer is yes, don’t! If separate digital units pursue disruptive opportunities, they will often end up with just front-end apps or proofs of concept that are impossible to integrate and scale with same speed they were developed.
If you're one of my regular readers, you may remember a post from August 2015 – "The Future Of Retail Is Digital" – in which I highlight key findings from a report on the future of retail experience. One recommendation was that retailers should begin to experiment with augmented and virtual reality technology early, so that potential use cases can be piloted in-store. Well this week, Microsoft announced a partnership with Lowe's to demonstrate the viability of Microsoft's Hololens to help Lowe's customers visualize custom kitchens.
While VR/AR is a long way from widespread market adoption (see this March 16 post by J.P. Gownder), the time needed to pilot and experiment with this technology means tech and CX teams in retailers need to be piloting use cases now in order to figure out what, if any, business impact the technology will have. (See also my comments from CES 2016).
As all organizations operating in Australia understand, the line between brand, marketing, and customer experience (CX) disciplines has blurred as people gain access to companies, services and products on their own terms. How can you thrive in this dynamic environment? Start by effectively coordinating between brand, CX, and marketing teams.
We’ve filled our agenda with senior CX and Marketing professionals from leading organizations across Australia, and beyond. Key topics they’ll cover include:
Driving business results, competitive advantage, and growth by delivering the right customer experience.
Identifying the key practices and behaviours that fuel CX innovation.
Building and maintaining a brand in a digital world.
Instilling an understanding of customer emotions into design experiences and branding strategy.
Systematically improving CX through effective measurement.
What’s the difference between a digital bolt-on and transformative digital disruption?
In the two years I’ve been on the road talking with executives around the world about digital business and delivering keynotes on digital transformation, I’ve been most frequently asked about bolt-on vs. transformation; what’s the difference?
A digital bolt-on is a digital project that is added to the existing business model that might improve the customer experience in a small way, but doesn’t fundamentally change how value is created for, and/or delivered to, the customer. For example, when a company updates a website and provides customers an electronic ordering platform, they are not changing the existing business model; they are simply providing an alternative channel through which the customer can buy products. The value proposition remains the same: buy and experience our product and you’ll gain value from the experience. Digital (in this case an online sales channel) has been bolted to the existing business model in much the same way a teenager bolts a spoiler onto an old car to make it "go faster".
Retaining and delighting empowered customers requires continuous, technology-enabled innovation and improved customer insight (CI). The logic is simple in theory, but that doesn’t make it any easier to implement in practice.
In my recent report, entitled “Applying Customer Insight To Your Digital Strategy”, I highlight the top lessons learned from organizations in Asia Pacific (AP) that are successfully leveraging CI to fuel digital initiatives. It all starts by ensuring that data-driven decision-making is central to the digital strategy. With that in mind, I want to use this blog post to focus on two key lessons from the report:
Lesson One: Establish A Clear Mandate To Invest In Customer Analytics
Successful companies serve empowered customers in the way they want to be served, not the way the company wants to serve them. When building a mandate you should:
■ Expect natural tensions between various business stakeholders to arise. To secure buy-in from senior business decision-makers, start by illustrating the clear link between digital capabilities and data as a source of improved customer understanding. Identify measurable objectives and then link them to three to four scenarios that highlight where the biggest opportunities and risks exist. Continue to justify data-related investments by restating these scenarios at regular intervals.
In a previous blog entry, I argued that everyone needs to digitize their business, but not every business knows what to do. Transforming into a digital businesses, especially if you’re a traditional enterprise, is hard work. However, we believe that Asia Pacific is already primed for digital disruption.
In my report, The State Of Digital Business In Asia Pacific In 2014, we found that, while the highest-profile digital business pioneers are headquartered in North America, market demand in Asia Pacific is more conducive to long-term digital disruption. Asia Pacific has five times as many Internet users and smartphone subscribers as the US and almost as much online retail spending as the US and Europe combined. You just need to look at regional powerhouses like Alibaba.com and Commonwealth Bank of Australia and their multibillion-dollar businesses to grasp the rewards of digital business success in Asia Pacific.
However, knowing what these firms have accomplished is insufficient; knowing how to get there is more critical. You should:
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
Over the past two decades, the Internet has triggered a tectonic shift in the concept of networking — one that has redefined how companies market and sell products. More recently, social media, mobile, and cloud have fundamentally changed the concept of collaboration, enabling businesses, employees, customers, and partners to continuously interact with each other to create innovative new products and services and enhance existing ones. Rising customer expectations and faster product life cycles are forcing companies to adapt to a new style of business: “the collaborative economy.” My new report outlines the core dynamics of the collaborative economy and the implications for CIOs and their business partners:
Collaboration is much more than unified communications. It’s not sufficient for the CIO to roll out a unified communications solution; technology solutions alone do not change business processes or support employees’ changing collaborative behavior — let alone alter business models. A modern collaboration strategy requires CIOs to make organizational adjustments in addition to technology planning.
Collaboration is becoming part of the corporate strategy. A modern collaboration platform is the foundation for better innovation, faster processes, and greater employee satisfaction, which lead to happier customers and new revenue opportunities. We believe that modern collaboration is part of competitive advantage — and leading CIOs must support it as part of their group strategy.
“The future is already here — it’s just not evenly distributed.” This popular quote hit home at the Global Mobile Internet Conference panel on meeting the challenge of global connectivity that I moderated this week. Internet.org is a global partnership between technology leaders, nonprofits, local communities, and experts who are working together to bring the Internet to the two-thirds of the world’s population that don’t have it. Founding partners include Facebook, Ericsson, Qualcomm, Nokia (now Microsoft Mobile), and Opera.
What it means
The age of the customer is everywhere. This point was cemented at the conference. Device makers, network infrastructure providers, and app developers have to work with telecom providers to leverage existing 2G/3G assets to tap unconnected subscribers or miss out on business opportunities. Governments also need to help by, for example, providing consistent electricity to homes. Improving the customer experience can help businesses grow.