March 9, 2016

Customer-focused digital transformation

Erik Nyré

Head of CEM Consulting, Tieto

Digitalization and digital transformation are likely on the mind of every executive at the moment. Companies are trying to figure out where to place their bets and how to make their investments pay off in the market as well as in their organisations.

Today, the challenges to achieve this are many:

Externally, companies are working just to keep up with all the digital development occurring in the market; the high pace of digital innovation, the myriad of digital alternatives available, tech-savvy customers, difficulties in recruiting digital talent and on top of all that, customers who can break their loyalty with the click of a button.

Internally, many companies have yet to structure their digital roles and responsibilities. The roles are many, and sometimes the division of responsibilities has not yet been determinedCDOs, CTOs, CIOs andheads of customer experience and digital channels, for example, are all commonly seen today as having a stake in the digital game. Consequently, many digital initiatives have likely been started, but they are not always in sync and not always in line with the overall digital roadmap—if such a roadmap even exists.

Even with good intentions, initiatives can be started in several parts of a business, but failing to align them risks both extra development costs as well as halting implementations in the organisation, thus producing unnecessary costs and employee disillusion.

Decide who you want to be and then ingrain digital strategies into your organisation

A digital strategy is in general not that different from business strategies of the past, but one very important aspect needs to be considered: today, you need to have  built-in flexibility. The only thing you can be sure of as a company today is that by the time you have finished implementing your digital strategy, market and customer expectations will have changed.

Of course, agility is a much (over)used word these days, but when it comes to digital strategy implementation, this is nothing short of vital.

To get the basics right, follow the examples of businesses such as Starbucks and Burberry that have succeeded in their digital transforms. Here are a few concrete steps:

  • Define your target customersBurberry decided to focus on Millennials. This has guided them in their decisions regarding the technologies and services in which to investand making sure their choices always resonated with their target customers.
  • Understand your customer journeyDetermine how your customers interact with you and the touch points that satisfy your customers. For Starbucks, one opportunity was to connect with the customer even before they visit to a coffee shop, making it possible for customers to place and pay for their orders even before entering the shop, thereby reducing waiting and transaction times.
  • Define your digital position and strategyFor example, Burberry decided that they wanted to use digitization to become a truly social company quite early. In doing so, they were able to connect much more deeply with their customers, developing value-adding and loyalty-creating services such as ”The Art of the Trench” and ”Burberry Acoustic”.
  • Assign executive sponsorship. Both Burberry and Starbucks assigned their executive CDOs responsibility over their digital efforts.
  • Combine key business and IT capabilities in order to drive and adjust digital development in a structured manner. At Starbucks, CIO Curt Garner and CDO Adam Brotman joined forces to chair bi-weekly development meetings to create the best new digital initiatives. Additionally, digital marketing, gift cards and loyalty programs were placed under the helm of the CDO, along with web, mobile, ecommerce, social media and the in-store digital network, which were all already under his responsibility. Similarly, at Burberry, the marketing, IT and creative media departments were all placed under one executive.
  • Learn fast. At Starbucks, the digital agenda was driven by the CDO and CIO in the bi-weekly scrum meetings and the selected ideas were assigned to a so-called ”Tiger team” with cross-functional skills in order to take the initiative forward.

One example of how to identify and define new business concepts and models within digital transformation is Tieto’s own strategic innovation program, the Tieto Experience HubWe utilize a range of methods to accelerate and drive the digital transformation within organizations.

For example, our CX Hack approach is an relatively short and very intense project that serves two main purposes: (1) aligning different departments of an organization to work towards one strategic goal, and (2) diversifying perspectives and transforming the cultures towards accepting open innovation as a strategic way of working.

By combining with design projects and technological pilots, the Tieto Experience Hub allows companies to innovate in a very agile manner.

There are many best practices for structuring a business for digital transformation, and these examples are just a handful of examples. However, as the former CEO of Burberry Angela Ahrendts also emphasized, a good digital strategy is only as successful as its acceptance and support among employees.

“Knowledge is power. So the more the associates know about the strategy, about what’s coming, the better. Everyone talks about building a relationship with your customer. I think you build one with your employees first.”

Keeping at least these considerations in mind will definitely bring you closer to a successful customer focused digital transformation.

Want to know more? Please contact Erik Nyré at erik.nyre@tieto.com

Find more about Customer Experience Management and feel free to follow us on LinkedIn.

Sources:
http://www.forbes.com/sites/scottdavis/2014/03/27/burberrys-blurred-lines-the-integrated-customer-experience/

http://sloanre.mit.edu/article/how-starbucks-has-gone-digital/

Sign up to join our collaboration network!

Subscribe to join our collaboration network, Tieto Experience Hub, where you'll be able to discover new business with design talents and real-time connection to consumers.  You'll be the first one to know what is happening, be able to join and influence innovative discussions and take part of insights and opinions, both from our colleagues and external thought leaders. 

Stay up-to-date

Get all the latest blogs sent you now!