Understanding Digital Transformation’s Big Lies And How To Promote Digital Completion
Vice President at Lightico. Proven business leader driving tech in enterprises. Born into Fortune 500s — now building tech companies
Digital transformation may be decades old, but it also comes with a couple of misconceptions.
Many companies focus disproportionately on the backend, neglecting the customer-facing frontend. Other companies know that digital transformation is important but assume it’s an unwieldy and time-consuming undertaking. Finally, and perhaps the biggest myth of all, in my opinion, is the notion that businesses are not well-equipped to take on digital transformation efforts themselves and must rely entirely on consultants to do the job for them.
As a result, businesses are failing to realize tangible, significant gains from their digital transformation efforts. Here, we’ll take a look at some of the digital transformation myths, the trends that have uncovered the myths and what’s needed today. (Hint: It’s not more of the same digital transformation initiatives).
Four Big Digital Transformation Lies
Many business leaders have taken the first step with digital investments but are realizing they still haven’t reached their goals. Much of this digital disappointment stems from these myths:
1. It’s all about the backend.
In my experience, business leaders tend to fixate on the backend when they think about digital transformation. However, this leaves the front end severely lacking from the customers’ perspective. While investing in backend capabilities can improve operational efficiencies, its impact is invisible to customers. Therefore, a digitized backend will have a limited impact on metrics such as NPS, the turnaround time for customer-facing processes and completion rates.
2. It takes 5+ years.
Many companies have lengthy roadmaps for their digital transformation investments. There’s an assumption that digital transformation is difficult and time-consuming, taking years to implement. If companies focus their efforts on replacing deeply embedded backend systems, this may be true. But digitally transforming the front end can be far quicker.
3. You have to stop business.
Business leaders may be hesitant to invest further in digital transformation because they assume that business will have to be paused. But this is false: Approached right, digital transformation can have a minimally disruptive effect on day-to-day operations and syncs right into existing systems rather than replacing them.
4. IT should drive digital transformation.
Finally, businesses have lost confidence in their ability to spearhead their own digital transformation efforts. They have relied on IT/CTOs to “do” digital for them. But the downside is that they aren’t in touch with customer needs and can embark on projects that aren’t customer/business sound. Millions of dollars and years later, companies are left with an irrelevant portal that’s seldom used.
Three Trends That Have Exposed These Digital Transformation Lies
These misconceptions surrounding digital transformation have started to dissolve. In large part, that’s thanks to the following trends:
1. The Rise of SaaS: SaaS (software-as-a-service) companies have helped business leaders realize that digital transformation needn’t be cumbersome and time-consuming or require extensive IT involvement. SaaS products often require little or no coding to implement, integrate seamlessly with existing systems and are easy to scale as demand for the service grows.
2. The API Economy: Most digital software these days comes with APIs that hook into other third-party applications and portals. This means that there’s no need for companies to overhaul their existing core systems. Businesses can simply plug in technology that makes their core systems better.
3. The Covid-19 Crisis: The pandemic accelerated digital transformation trends, pushing companies to quickly adopt customer-facing technology. If prior to the crisis, companies felt that digitization was a nice-to-have, the pandemic showed the danger of relying on legacy channels and face-to-face business. Even now that the pandemic seems to be on its way out to some degree, customer demand for convenient, remote and digital services remains high.
From Digital Transformation To Digital Completion
Digital transformation efforts often failed to have the desired results in the past due to faulty beliefs or misconceptions. Yet with the rise of SaaS, APIs and the pandemic-led acceleration of digital, there are more opportunities than ever to do digital the right way. Business leaders can do this in a way that maximizes the ROI of their digital investments, while truly impacting the daily lives of customers and the ways they interact with the business. Throwing more money and effort into improving the backend isn’t going to do it. Nor is adopting point solutions, such as e-signatures that leave the customer journey as fragmented and choppy as before.
Here are my top best practices for promoting digital completion:
1. Focus on the customer.
While digital transformation efforts have often focused on the backend systems, digital completion is all about getting the customer to the finish line. This means adopting technology that visibly improves the user interface and experience. If the customer can’t see or feel it, it won’t promote completed journeys.
2. Stay human.
Even though we’re talking about digital completion, customers are reassured when they have access to a human being. Even as customers primarily interact with a digital interface, they should be able to speak to an agent or advisor at a moment’s notice. For many tasks (besides the most rudimentary), it may be best to have an employee guide the customer through to ensure completion.
3. Eliminate friction points.
Customers who are forced to switch from one channel to another (e.g., from email to phone call or phone app to in-person) are at risk of failing to complete the task altogether. Customers are more likely to complete tasks when they can stay in one channel from beginning to end.
4. Do away with slow legacy channels.
Many “tried and true” channels are no longer optimal for today’s customers. Requiring customers to pick up a phone and go through an IVR will prolong time to completion. But keep an eye out for less obvious culprits: email; PDF; and mobile apps take up time just as instant channels, like text message or chat.
The Bottom Line
Digital transformation is a broad term encompassing many of the shiny tools companies reach for when trying to modernize. But impacting the bottom line metrics every company cares about — things like profit, sales and cost-effectiveness — means ensuring that customers complete every task they begin.
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