This time of the year is significant not only because of the never-ending amount of Christmas log cakes (or puddings) that we guiltily consume without restraint at our offices, it is also when we sit together to talk about everything that has transpired in the past year. As we go into the festivities over the next few days, this is the time for us to pause and reflect on the things that have gone well, and those that haven’t quite gotten to the stage of being ideal.
For the financial services sector in particular, this means taking stock of your digital transformation journey by evaluating your progress in digital banking in the age of the customer.
At Forrester, we have done extensive research that involved speaking to incumbent banks globally and leveraging our consumer technographics data for our digital banking strategy playbook. We have recently published the digital banking strategic plan, processes, and benchmark chapters.
You've been creating digital customer experiences for years now. You've built a successful app. You’ve assembled a martech/adtech stack. You may even have started swinging at omnichannel delivery or harnessed AI or piloted a connected product. So it’s time to declare victory on digital transformation, right?
On October 22, 2016, AT&T announced its intention to acquire Time Warner for an equity value of $85.4 billion. The deal is essentially about the combination of quality content and content distribution, as it transforms AT&T into a content producer and owner — rather than just a distributor of content. Many telecom regulators restrict revenue growth opportunities for telcos in highly regulated telco markets. As a result, telcos are increasingly looking outside their markets for growth opportunities. This deal is evidence of this trend.
Telco CIOs Must Become More Strategic To Prepare For The Content Opportunity
The AT&T-Time Warner deal deserves special attention by telco CIOs. The deal needs to be seen against a challenging backdrop for the telco industry, where revenue growth from traditional revenue sources is hard to come by. Yes, AT&T already operates the largest US pay-TV business through its ownership of DirecTV. The Time Warner deal — should it materialize — would enable AT&T to offer its own premium entertainment programming to its pay-TV, mobile phone, and internet customers. AT&T’s intention to acquire Time Warner opens a new chapter for telcos, because the combination of quality content and content distribution potentially helps telcos to:
Companies are turning to digital to do one of the three things: improve customer experience (CX) using digital technologies; improve their operational efficiency to better serve customers; and launch new business models.
The manufacturing and industrial sectors are undergoing a similar transformation. In my recent discussions with leaders in this market, Industry 4.0 and smart factory dominate the conversations, but the discussions quickly shift to the Internet of things (IoT). While the industrial internet is the most significant manifestation of the digital revolution in these sectors, we are also coming across a broader range of digital initiatives from manufacturing firms.
Tech vendors and systems integrators working with manufacturing firms have identified two types of engagements emerging. Infosys’ Global Head of the Manufacturing Vertical, Nitesh Bansal opined that one set of firms are taking charge of sensors and monitors that they own and leveraging the data assets to improve predictive maintenance, asset efficiency and improve track and trace. Outcomes from these digital operational excellence (DOX) initiatives include:
Collecting data and analyzing it for better predictive maintenance
Empowering technicians to do their job better by providing actionable directions at the point of maintenance
Using augmented reality to help with quick diagnosis and fix
Increasing the asset throughput while increasing safety using automated self-driven vehicles
The new eGovernment Benchmark 2016: A Turning Point For eGovernment in Europe? was published this week. Although many countries show progress toward the goals, the transformation is not happening as quickly as expected. Public services are increasingly accessible, with 81% available online. However, one area that disappoints is user-centricity. While business-related services have improved significantly, citizen-related services lag particularly in ease and speed of use. Results, however, differ by geography as delineated by a “digital diagonal” running from south-west to north-east. Those countries running diagonally through the middle of Europe seem to be digitizing more effectively. (See the figure to the right). Not all countries are transforming at the same pace – and not surprisingly.
I’ve been thinking a lot about “e-government” and “digital government” these days, and one thing bugs me: the push for online services. Yes, I like the convenience of being able to get things done online: renewing driver’s licenses, requesting permits, paying fines. But I also recognize that there are some things that might be better done in person. Yet not everyone has easy access to a government office. My own regional administration is over an hour away by car, and I certainly don’t want to have to go there to get things done. Therein lays a tension that isn’t necessarily solved by “digital services” but that can be addressed by “digital government.”
There's a fundamental difference between companies that apply digital technology as a bolt-on (frequently adding an eCommerce site, social media, or customer mobile apps) and those that take a more holistic approach to transforming the way the company uses technology to deliver better customer outcomes and drive revenue.
Transformers are more likely to succeed because they recognize their customers' expectations are evolving. The executives in these companies redesign their business to evolve alongside the expectations of their customers. These companies are obsessed with helping their customers achieve their desired outcomes, and they continuously explore new ways to do that profitably. This is why transformers are destined to become digital predators while bolt-on companies are more likely to become digital prey.
One of the distinguishing characteristics of many transformers that caught my attention back in 2013 remains a challenge for many companies in 2016: delivering digital operational excellence (DOX). DOX focuses on the ability to use emerging technologies to change operational aspects of the business (those not directly touching the customer) to create business agility in service of the customer. Why is this important? Because without the ability to evolve quickly, your company will fail. This is the digital dilemma.
I use this simple equation to illustrate my point:
Some of you may have seen my earlier blog post on why you should attend CX Marketing Singapore 2016! Our annual Forrester Singapore event returns in less than two weeks, and I'm excited to hear from our own Forrester experts as well as esteemed industry speakers on how customer experience is and will continue to be the key differentiator for organizations to succeed in the age of the customer.
I hope to see you at the Marina Mandarin on August 25 — register here if you haven't already! In the meantime, here's a sneak peek of what to expect at the Forum. I had the opportunity to speak with David Peller, Director, Strategic Partnerships, Asia Pacific at Booking.com, who gave us the inside scoop on how Booking.com has organized itself to be customer-obsessed, which it believes gives it an edge today. Here's what he had to say:
How has the age of the customer affected the travel industry? How have you seen your customer needs evolve?
If you think back to the time when travel was essentially an offline shopping experience, the customer used to spend hours deliberating with imperfect information, guided by a travel agent. Today, technology democratizes the travel experience — and you don't just have to take the view of one person for granted. On Booking.com, we have more than 100 million verified reviews of properties, places and activities, which provides engaging content for every potential traveler to explore.
Can you tell us briefly about Booking.com's digital transformation program and the approach that you've taken?
Traditional manufacturing businesses must rework the structure and culture of their organization to address rapidly changing client expectations. Bosch is a fascinating example of how a traditional manufacturing firm can successfully transition into a leading digital business. Our discussions with Bosch highlight that:
The shift from selling products to outcomes-as-a-service requires business model change. In order to sell business outcomes, Bosch combines business process expertise with technical know-how and an outside-in approach.
Digital transformation depends on successful cultural transformation. Bosch’s digital transformation is based on a fundamental cultural transformation that takes every Bosch employee and customer along.
Bosch’s software engineering division acts as a catalyst for digital transformation. Bosch believes in a central coordinating role for its software engineering division as part of the digital transformation process.
As all organizations operating in Singapore and in Southeast Asia understand, CX is fast becoming the only competitive differentiator for their business. The lines between brand, marketing, and CX disciplines are blurring as customers 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 Singapore 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 behaviors 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.
Forrester’s Digital Transformation Europe 2016 Forum in London starts today, and our first industry speaker will be Blake Cahill, Head of Digital, at Royal Philips. Over the past 20 years, Blake has led a series of marketing, creative, client management, product innovation, and thought leadership projects for both Fortune 500 organizations and digital start-ups. At Philips, Blake is helping to lead the Dutch company’s international rebranding and expansion into new technologies and markets. In his presentation, he will talk about the role of digital marketing in the transformation of Philips into a global digital business, and in entering the Chinese market, providing key best practices and lessons learnt.
As I prepared for my role as Forum co-chair, together with Benjamin Ensor, I spoke to Blake about his views on the age of the customer and the impact of digital on companies like Royal Philips. Here is what Blake shared with me, and I hope you will enjoy his answers as much as I did. If you would like to attend Blake's presentation in person, there is still time to register!
Q. How is digital transforming Philips' business and, as a digital marketer, how are you collaborating with and/or advising your peers in other parts of the business on the transformation?