Warning! Thinking digital can lead to weird dreams where you are frantically writing code for your own brain, so it has the necessary functions and sub-routines to wake you up. For the curious developers, the dream I had included the need to compile, test, and run a program before I could wake up. Of course, I did wake up feeling very relieved I was only dreaming about writing solid code.
While this strange experience actually happened to me over 25 years ago, it was not surprising given the fact that this happened during one of my very first software programming jobs. My co-workers and I were building a new workflow solution to automate an entire set of business processes. We were doing digital transformation. It was innovative and super cool!
What is digital transformation?
Of course, digital transformation was not what we called it back then. We called it “automation.” We were using cutting edge technologies and new handheld hardware devices that connected to a server with a database, which was used to integrate and coordinate all the tasks and steps in a given process. Sound familiar?
Today, we talk about “digital transformation,” which, paradoxically, is the same thing and not quite so. Let me explain. The term “digital transformation” is a broad and widely used term that means different things to different people in different industries. In the historical sense, it refers to the automation of business processes; using software to perform tasks that were otherwise manual tasks. This is digital after all and driven by software.
The technical definition would go something along the lines of: digital transformation is the adding of present-day technology into the every-day operations of organizations, which results in radical changes in how organizations function, including their internal functions, production of goods, or provision of services, and so on. This includes the digitization and automation of manual processes.
But why does digital transformation have different meanings depending on the context? Two words: customer-centricity. Historically, the focus on technology in business has been exactly that, about technology “in” business, in other words, building and implementing software systems to help optimize and/or automate the internal business processes. Nothing changed for the customer.
Later, everything changed for the customer. They had powerful digital devices called mobile phones and tablets. They had 24/7 access to the internet, social media, and online shopping.
Customers, thus, wanted convenience, easy-to-use services, and better customer service. Therefore, selfservice and improved customer experience were among customers’ desires.
Digital transformation has, therefore, become focused around using software apps to directly serve, support, and interact with customers. Digital transformation is also aimed at improving customers’ lives by serving them and being able to do so in ways that are seamless and frictionless.
Why should one undergo digital transformation?
Customers usually share their experiences with the world. After forming digital connections with their friends, followers, and the world, customers began to realize that they now had increased influence not only on their friends and family, but on a wider network as well.
For the first time in human history, it became extremely easy for people to share their customer experiences with a network. This included the good and the bad.
As the digital world listened and read about people’s experiences, it also created a permanent record. Once a comment is online, it is there forever.
“Digital transformation is about delivering convenience, value, and great experiences to your customers.”
In the past, getting bad service at a restaurant meant complaining to a few close friends and family, and maybe one or two co-workers. Today, it is vastly different, and customers share their experiences with millions of others within minutes. Ever wonder how many comments, reviews, and product feedback are available to potential customers?
This is one of the most compelling reasons to embrace and undergo digital transformation. If you are not serving your customers in ways that meet their “modern” expectations and/or exceed their “traditional” expectations, others will.
So, what was so innovative and super cool about the workflow solution we were building 25 years ago? That workflow automation was the digital version of Henry Ford’s production line.
The modern-day progress is the grasp of opportunities by leveraging the integration of services and/or product providers, and the customer. The benefit of such integration is an all-inclusive reach into new informal markets, as well as established markets. What is it that makes digital transformation an essential requirement in today’s world? It is the same factor as before: solving problems for customers by providing solutions and/or services that add value to their lives or organizations.
What is the secret to innovation?
Being innovative is a very cool term and sounds good. But what is innovation really? Nothing more than being smart about solving a problem. The stapler is innovative since it solves a problem. The paper clip is also innovative because it solves a different problem. However, understanding the problem is the first step.
Imagine a pile of garbage right next to your front door. This is a problem. Every day, you notice the pile of garbage is getting bigger and bigger. This is an even more pressing problem. You realize you need a solution. You get your team together and brainstorm. Innovative ideas flourish and you decide to build an artificial intelligence-based robot to move the rubbish and clean up the mess and keep it clean.
Wow! This is really innovative. But did you really solve the problem? Let me put it this way. Did you address the root cause? Who was dumping the garbage there? Chances are, it was probably one of your lazy kids that was supposed to put the trash in the dumpster.
“Get a clear perspective on the problem or the root cause.”
When thinking digital, think thoroughly about the problem(s), especially focusing on their root cause(s). How you define the problem leads you towards your strategy and solution. And sometimes, it is a quick and easy fix. We need to be careful not to overcomplicate things.
Get a clear perspective on the problem, or the root cause and define your scope clearly. Is the problem garbage appearing near the front door? Is it the lazy teenager? Or is there a problem with an opportunity like building a robot to clean the house? Who wouldn’t want to never have to clean their house again?
A challenging problem is a great opportunity.
The onboarding process poses problems for many organizations. In the financial sector, “onboarding” is the term used to describe the process of signing up new customers. My team and I had a big problem signing up customers and it was impacting our regulatory obligations. Our team was tasked to solve this problem.
We could see the “garbage pile” and we could see it was getting bigger each day. In fact, we had many garbage piles all over the place. However, instead of just jumping right in to find a quick fix or solve the problem before us, we focused first on understanding the problem. We were digging deep into the customer journeys and their experiences, and we looked at the operational business processes. Both the unsatisfactory customer experience and the poor operation of business processes were part of the problem. Our colleagues were overwhelmed and frustrated.
Additionally, we looked at the technologies. There were too many technologies trying to fit together, as well as duplicate technologies all over the place. This was a major contributor to the operational and customer service teams who had to work across too many systems, often duplicating tasks in multiple systems.
And then, we looked at the data. As you can imagine, with lots of systems the data systems were also a big problem.
But another problem in the data was that the way the data was structured was not customer-centric. It was productcentric and there was no way to link the data either. Finally, we had uncovered the root problem. When thinking digital, think about your data. How you gather, structure, store, and use data. This is the foundation to your entire digital transformation.
Is legacy also your problem?
The second step is to recognize that the biggest challenge to digital transformation is usually legacy. If you have a legacy to deal with, you are at risk of not being able to step back and get a clear perspective on the problem as it stands today and how to solve the problem using more recent technologies and capabilities of today.
Breaking free from legacy and traditional thinking around business models and processes that have always been around due to the lack of technology or its limitations is essential.
The onboarding problem was about the collection of information and documentation. This is the data.
The data problem we had was quite simple to understand: We did not know what data was required and when. And we did not know how to store that data in the right way so that we could easily retrieve and re-use that data when we needed it.
This led to another problem. Every time an existing customer came to open another account, guess what happened! They had to fill in the same application forms all over again. More garbage was added to the pile.
The legacy issue, usually faced by large organizations and especially those that have had a history of mergers and or acquisitions, is the various systems or their data not being integrated or properly merged.
Another legacy issue is how an organization is structured in terms of its divisions or business units, or product teams, and its IT department(s). The technology landscape usually ends up reflecting the organization’s structure as well. This usually results in the technology landscape consisting of duplicate systems as well as duplicated data records.
“Get free from legacy and the limitations of existing business models.”
When thinking digital, get free from legacy and the limitations of existing business models, business processes, and technologies within the organization. It will all need to change anyway, because chances are the customer was not part of the original design.
Are you thinking “customer”?
Focusing on the customer journey for onboarding could have meant being friendly and giving them a cup of coffee while they fill out all your lengthy forms. You could even make the experience more special for your VIP customers and fill out their forms for them while they sit in your office, drinking coffee, of course.
However, this does not solve the problem. In fact, this is a legacy issue that creates friction, and customers do not like friction. Going to an organization’s branch just to open an account is a waste of everyone’s time. I walked out of a bank once because of the friction involved in opening an account.
Additionally, and this is absolutely crucial, filling out documents or application forms must be avoided. Scanning these documents into any document management system is not – I repeat, not – digital. All data collected must be stored as structured data in your database.
Prioritize customer experience by focusing on the customer. Think customer-centricity! Every business in the world must have customers and be customer-centric since they do not revolve around you; you revolve around them.
The onboarding solution took a remarkably simple approach. Remove the need for customers to fill in any information altogether. Of course, there are regulatory obligations to collect and store customer information, but do it another way, for the customer.
The first option is to leverage any customer information you already have; never ask customers to give you the same information they have already provided you with in the past. Second, get the information from a data broker or aggregator. And if you must ask for data, only ask for the minimum you need at that point in time.
“Prioritize customer experience by focusing on the customer. Think customer-centricity.”
When thinking digital, remember that customers want convenience and are drawn to great experiences that simplify their lives all the while adding value to their lives. The easier you make it for customers to do business with you, the more they will do business with you.
Scalability and repeatability
Fundamental to every business and how they serve their customers with great products and services is the fact that it needs to be repeatable and scalable. The greater the repeatability and scalability, the greater the growth potential.
Doing things the way they were always done typically means maintaining manual tasks. Manual tasks that take one or two hours, for example, to sign up a new customer, are an expensive and inefficient way to do it. It also severely limits your organization’s growth potential.
A one-hour task for customer sign-up means that, at most, one employee can sign up 160 new customers a month. You would need a team of over 625 people to sign up 100,000 customers per month. Salaries, office rent, equipment, etc., for that size team would be ridiculously expensive.
When thinking digital, you must also think about repeatability. This means you design for “straight through processing” where all tasks and capabilities in your apps are fully automated.
“The greater the repeatability and scalability, the greater the growth potential.”
User experience or user interface design of your apps becomes an important part of the design process to ensure that the app is easy to use, intuitive, and supports selfservice (a natural convenience for your customers). With regards to the usability of the app, if you have to explain it, you have failed it.
Building a fully digital and automated customer sign up process means that you can sign up 100,000 customers a day. Your growth potential is unlimited. And do not worry about computer servers. Build cloud-native apps in the cloud and your infrastructure is ready to scale in accordance with the business growth.
When thinking digital, you must think scalability. The architecture and design of your technology needs to leverage the capabilities and value of cloud computing.
Disrupt yourself or be disrupted!
The ideal onboarding experience for a new customer should be less than one minute. Five years ago, we were aiming for less than 2 minutes. I was laughed at and told it was impossible and it would always take several hours to several days. Those organizations were disrupted!
A few years after that, a digital bank was launched and you could go to their kiosk in a supermarket and in less than 5 minutes you had a bank account and got issued a bank card from the kiosk immediately. This digital bank reached 2 million customers in 18 months. They were signing up 110,000-120,000 customers per month. They were disrupting!
Today, you can go to the app store download an online banking app and create an account in one minute. Yes, in under 60 seconds, you can, as a new customer, open a bank account and transact immediately. The only information you provide is your identity number. They collect the rest from a national government database.
Consider the implications. If I am not happy with one bank, I can switch banks and create another account in less time than it takes for them to answer my call and address my complaint. Oh, and then share my experience with the world.
Think digital team!
Finally, when thinking digital, you need to think about the team you put together to drive your digital transformation program. Everything depends on your digital team. Digital transformation programs usually touch every part of your organization and include a diverse range of skill sets that need to be empowered to ensure success.
The official role for leading your digital transformation should be your CDO: Chief Digital Officer. However, their unofficial title is CDO: Chief Disruption Officer. They are someone who is a radical thinker and sees things differently. Someone who can guide the organization and lead the effort to disrupt.
They are someone who can think digital.
