Digital Enterprise Needs More Than Just Data
The shift from the traditional business to the digital comes from the need to meet the evolving needs of customers. That means a change in the resource planning to ensure new IT strategies to help businesses adopt agile approaches.
McKinsey in its latest report recommends a two-speed IT architecture for traditional consumer-facing organizations to speed up their business. The first is separating the front-end systems from the management of existing back-end systems. Secondly, bringing in accountability with a focus on digital product management.
Data plays a significant role in the second model, as management of digital products requires incorporation of customer needs and insights into their products. Being digital is about having a cyclical dynamic in which capabilities are constantly evolving in response to inputs from the customer.
The digital product management approach will enable companies streamline their development processes and gain customer loyalty.
In an earlier study, McKinsey researchers Tunde Olanrewaju, Kate Smaje, and Paul Willmott wrote that digital transformation is more than finding new revenue streams. “It’s also about creating value by reducing the costs of doing business. Investments in digital should not be spread haphazardly across the organization under the halo of experimentation,” they wrote.
“Digital and digital customer experiences are becoming a critical path to success for most organizations,” said Forrester Research’s principal analyst Sarah Sikowitz was quoted by Wall Street Journal.
While customer engagement is a journey, there is a need to integrate data across channels to create an effective customer experience.
A study by digital transformation company, LiquidHub, and Forrester Consulting states that customer engagement demands end-to-end integration among channels and across the value chain. ”Expanding the availability of channels for both digital and digitally enabled customer interactions can drive benefit to the business. But failure to integrate data across channels creates poor customer experience,” says the study.
The study also notes that effectively building improved digital engagements requires a full service, end-to-end partner. Having a single partner for digital transformation services, for both application delivery and integration, enables more streamlined implementations by eliminating the logistical challenges of working with multiple partners. Today’s digital channels have to interface with data, information, and insights across the value chain, creating a complexity that a small number of partners can best address, it says.
Changing the business to suit the digital priorities requires the company to have a long-term vision
Karel Dörner and Jürgen Meffert, Senior researchers at McKinsey and co-author of a report on digital transformation say that optimizing a customer journey forces a company to identify every technology, process, capability, and transition needed to deliver a great experience.
Key performance indicators, metrics, and performance incentives will need to be adjusted to track and reward progress on customer journeys instead of channels or product performance. For example, opening a bank account has traditionally been a tiresome task that often takes customers a couple of weeks, requiring them to collect, complete, and mail forms so the institution can verify their identity.
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