Updated: Nov 6, 2019

Customer Experience, the Key Driver of Digital Transformation

Understanding DX

Digital Transformation or DX, is also termed as the fourth industrial revolution, and the journey that companies/organizations are taking toward the digital world, is not new. We have been hearing people talk about “digital transformation”, but not many understand what it means. Digital transformation can be defined as a coordinated set of efforts to rewire all operations across an organization to fit the ever-evolving digital world. This involves adopting a robust digital strategy, implementing new technology and improving the customer experience with digital tools.

Some companies work their way throughout the framework. They start with a strategic perspective at the future of their business model. They very often do that, either in executive committee strategy sessions, in board sessions, or a more open environment with other partners, be that academic environments, or consultants, or investment bankers. Then, out of that agenda, they create a portfolio of opportunities, work their way through the execution, and deal with the enabling questions in the lower part of the framework to support the execution of that program. Another path, that I would like to focus on in this article, is that companies start with a very customer-centric view.

An organization that plans to transform itself digitally needs to evolve its processes, and the way in which people and technology work to create new and effective methods to keep up with the changing environment and customer expectations. The organization has to reject its archaic forms of doing things. Flexibility and quick reaction will allow it to stay afloat.

MIT Sloan School of Management identified nine key elements of successful Digital Transformation:

• Customer Understanding
• Top-Line Growth
• Customer Touch Points
• Process Digitization
• Worker Enablement
• Performance Management
• Digitally Modified Businesses
• New Digital Businesses
• Digital Globalization

The above nine elements are broken further down into three broader categories:

• Using digital technology to transform the customer experience
• Using digital technology to transform the business’ operational processes
• Using digital technology to transform the business model

Transforming an Organization

Digitalization needs to fulfill a business purpose not because it is fashionable. This purpose can be efficiency, getting to the operational excellence. The current economic environment in many parts of the world puts more and more pressures on companies to become leaner, and digitization has been helping this. However, this must go hand in hand with bringing in innovation and enhancing customer experience. This brings an overall need for transformation of the organization. In fact, a study from the MIT Sloan School of Management found that companies that increase both digital operational excellence and customer experience outperformed industry average net margin by up to 16-percentage point. The study also shows that enhancing customer experience alone does not get you to the industry average profitability, also focusing on operational excellence does not make you an industry over-performer neither. It is doing the two together. However, only a tiny chunk of companies managed to excel in both dimensions. It is hard, but rewarding. This is why it is critical to have an end-to-end approach towards transformation. One that is not limited to automating existing processes, but completely rethinking how business value can be increased by delivering value to the end user. However, one major drawback of this concept that has been seen lately is that company leaders are failing to differentiate between digital change and a digital transformation.

Companies are deluded by the fact that by deploying the latest technology, they are bringing transformation. A digital change will result in improving operational excellence, or cut down costs, but may not bring any innovation. No transformation can happen, if there is no innovation and transformation occurs only when the initiatives protect the organizations against new disruptive trends or create new business models. As a result, companies like these become extremely vulnerable in the long run. When these companies or organizations realize the meaning of true business transformation, they have little or no resources left, hence they focus on the transformation of their internal IT infrastructure and seldom focus on the end customer experience.

Adopting a winning strategy

The customer is really at the heart of a value delivery framework and organization need to create experiences from customers backwards throughout the organization that are seamless and very powerful. This approach is called a customer journey-led approach. Companies create customer journeys, starting with the customer experience, and work all the way through everything that is required to adapt those customer journeys in the digital age. All business processes must be aligned towards achieving a superior customer experience. Retaining customers and keeping them loyal to your brand is a challenge. It is old news that many customers will simply leave after a single bad experience. It shows that the delivered experience has to be not only great; it also needs to be consistent during time. We also know that a lot of customers are willing to pay more to get a better experience, which suggests that investing in customer experience is a major differentiator in the market today because today’s digital customers expect superb experiences from companies. These high expectations drive innovation and cause enterprises to go out of their way to meet customers’ needs.

To enhance the customer experience, the targeted changes must be personalized. The ultimate solution to understand the Digital Customer Behavior is mapping of customer journeys. Customer journeys helps organizations and companies to map touch points to identify the pain areas of the end customer, and then revamp their strategies based on these pain points by deploying the latest technology, or automating processes giving back rapid results and cater to the customer needs. By using insights from customer journey analytics, telco businesses can better measure the user experience, and make informed decision for refining it. The data not only allows them to take proactive approach towards customer satisfaction, but enables the prediction of future failures as well. In this way companies are tremendously benefiting from customer journey analytics across customer experience, as the results are real, immediate and have a lasting effect.

The Middle-East Transformation

Within the last five years, the technology marketplace in the GCC, and the UAE in particular, has grown and evolved from a highly fragmented market of resellers, consulting and systems integration service firms, to an ecosystem of product, service and solution providers offering artificial intelligence, data analytics and smart solutions, to name a few. According to a research company Mergermarket, there have been approximately 40 technology-related transactions in the Middle East region between the year 2015 to 2017 with software, internet service providers, telecommunication services and online commerce platforms being the main acquisition targets.

TahawulTech reports annual spending on digital transformation initiatives in the Middle East, Turkey and Africa is set to cross the $20 billion mark by the end of this year. The figures that came from the latest report by global research and advisory services firm International Data Corporation (IDC) also noted that spending is expected to more than double over the coming years, passing $40 billion by 2022.

“As digital transformation continues to reshape the global economy, innovation will multiply, platform wars will intensify, and data will increasingly be used for competitive advantage,” says Jyoti Lalchandani, IDC’s group vice president and regional managing director for the Middle East, Africa, and Turkey.

The Kingdom of Saudi Arabia took the initiative and launched its Digital Transformation Program as one of the principal programs to achieve the Vision 2030, aiming at building a digital government, a digital economy and a digital society, with a view to create a vibrant environment, a thriving economy and a better future. Nasser Al Nasser, Group CEO of Saudi Telecom Company, one of the biggest Telco players in the region, has been leading the visionary transformation program for STC, to meet the country’s target of Vision 2030. The telecom firm has taken great steps toward the digital transformation, smart cities, cloud computing solutions, the internet of things (IoT) and 5G services. In fact, STC will be one of the forerunners in the GCC, to implement 5G services for its customer base. In MWC 2019, Mr. Nasser brilliantly highlighted how, as per the new transformation strategy STC has mutated itself from a provider to being an enabler, entering into fields like Fintech, IT/Content services, Cloud Services, Cyber Security & Analytics.

Time for Action

Digital Transformation is real and is here. If companies do not transform themselves to meet the expectations of their customers, they will soon be phased out. A survey from Ernst & Young states:

• 90% of non-digital companies have faced increasing competition with digital companies;
• 87% of companies include digital transformation into the development strategy;
• 40% of the companies-leaders will be superseded within 5 years if they do not undergo digital transformation.

50% of Fortune 500 companies in 2000 no longer exist today, and Pierre Namterme, Accenture’s current CEO, attributes Digital Disruption as the primary driver of this rapidly shifting corporate landscape. In this context, Digital Transformation becomes less of a strategic priority and more of an existential one. According to a research from IDC, two-thirds of the CEOs of Global 2,000 companies will shift their focus from traditional, offline strategies to more modern digital strategies to improve the customer experience before the end of 2019 – with 34% of companies believing they will fully adopt digital transformation within 12 months or less.

Digital transformation is vastly influenced by mobile technologies, but many companies still underestimate their importance and, as a result, lose potential clients. In every telco, the digital transformation journey is a CEO-led visionary initiative. Former Cisco CEO John Chambers said famously, “Disrupt yourself, or risk being disrupted by the competition.”

Customers live in the “here and now” mode – the business that wins a high-quality product in the shortest time wins.

About the Author

Based in Riyadh, Saudi Arabia, Mohammed Naquib is a certified digital transformation professional, having a rich experience working with tier 1 telco companies and CSPs in Lat-Am, Africa and the Middle East. His work comprises of delivering world class digital customer experience solutions to telco customers.

When not working, Naquib spends most of his time reading and following transformation case studies of organisations and companies and digesting the latest trends driving the Society 5.0

Connect with Naquib here : http://linkedin.com/in/mohammednaquib