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How Digital Transformation Is Impacting Customer Experience

By: Richard Alvarez, UX Practice Lead, Saggezza 

This blog, co-written with Aparajito Sengupta (UI/UX Manager, Infostretch), draws on their joint experience in the Customer Experience environments. 

As companies continue their digital transformation journey, there is an increased appreciation for digitalization as a business optimization strategy. Often, the goals that have been defined in the boardroom have become a priority for decision makers.  

From a digital engineering standpoint, we now spend a lot less time defining what digital transformation is and whether it is required. Instead, the discussions center on telling companies how to do it, how to excel at it, where to invest efforts and how to scale.  

So, here is the sixty-four-thousand-dollar question …  how’s your digital transformation going? 

If the answer doesn’t revolve around your customers, this could be a clear sign that your organization is stuck in “tech optimization” mode as opposed to the shift into the higher gear required for actual digital business transformation. In fact, what distinguishes digital transformation from, say, a tech upgrade, is that integrating a strategy is an opportunity to fundamentally re-imagine the business from the perspective of the customer.  

The caveat is that it can be all too easy to lose sight of customer-centricity when pursuing shorter-term goals. This blinkered view is a trap business leaders must avoid. Customer experience has evolved drastically in the last decade and advances in cloud computing, native development and AI have all led to customer experience transformation becoming both a competitive differentiator and a C-suite priority.  

On every level, the concept of digital first has become digital only. With that in mind, let’s consider six markers that should ensure that your digital transformation is not only on track for the next level of customer experience and engagement but also taking advantage of tools available: 

1. New Products, Increased Demand 

According to Gartner’s 2021 CIO Agenda report, 76 percent of respondents said that their companies recorded an increased demand for new digital products or services during the first seven months of the pandemic and 83 percent expect this demand to increase further in 2021.  

“Many changes made in response to COVID-19 will continue to accelerate because they made business sense,” the study said. “For example, customers and citizens shifted their activity online during the lockdown, increasing demand for new digital products and services, as well as self-service use.” 

And while the pandemic remains an ongoing health issue, Gartner’s recommended response is short and to the point …  “Invest in customer-facing technologies.” 

2. Increased C-suite support

One plus point of the black swan event that disrupted our lives is that CIOs and CEOs worked more closely together on digital business strategies. Two thirds of CIOs reported a strengthened relationship with their CEO, Gartner’s report said, which meant that 70 percent of CIOs were able to assume responsibility for high-impact initiatives. Additionally, 80 percent of respondents said they had been “educating the C-suite” on the value of IT.  

On a granular level, this is a great moment to keep the momentum for digital business acceleration going. From a service provider standpoint, IT budgets are increasing, digital transformation is on everyone’s agenda and customer experience spend is in the spotlight. A recent blog post from IDC gave credence to these trends, saying that, “as companies strive to retain or reclaim customers post-COVID, customer experience has emerged as the clear differentiator.”  

3. Think bigger 

There is an argument that many companies have reached a crossroads when it comes to their digital transformation journey. The low-hanging fruit in the organization has been identified and (in theory) dealt with, and now it is time to scale their ambition. For many decision makers, the next step is the overhauling of their customer experience goals.  

The problem that some are facing, however, is that this stated ambition often means addressing the limitations of outdated core systems. To be more specific, legacy infrastructure needs to adapt to support business agility and enterprises – even in traditionally conservative sectors, like banking, finance and insurance – are looking at innovative ways to update their capabilities.  

For example, Saggezza, an Infostretch company, worked with a large UK-based insurer to update its customer communication management system, a resource that was outdated and laborious to manage. Using agile delivery methods, we designed an automated, responsive solution based on Quadient technologies, that was not only flexible and reactive but also worked seamlessly with the company’s existing IT systems.  

4. Hire a CXO 

There is a consensus that the optimization of customer experience is a key factor when it comes predicting customer loyalty, satisfaction and sales. That puts the onus on hiring someone who can be dedicated to that task.  

Enter…the chief experience officer. Companies need to take a long view of what makes their customer service culture and the CXO ticks these boxes.  As Forrester’s Martin Gill noted in this recent blog post, “customer experience (CX) leaders grow revenue faster than CX laggards, cut costs, reduce risk and can charge more for their products.”   

5. Customer journeys matter, not touchpoints 

Big data has already played a critical role in how businesses view customer experience, but this remains a nascent strategy.  

Advanced analytics can give us a more accurate picture of the state of customer satisfaction along the whole journey, replacing the disproportionate views of customer attention that have been prevalent in the past. Businesses can use these insights to go beyond fixing customer touchpoints, instead thinking about the customer journey in context with where they should be.  

6. Integrate Customer Communication Systems 

Powerful customer communication systems, driven by AI/ML and fuelled by customer data, are increasingly transforming digital businesses.  

In recent years, organizations have struggled to make full use of the data that they own. Fast forward to today and advanced data engineering plus analytics make it easier to access and operationalize customer insights across the entire purchasing cycle. Additionally, these systems join up previously siloed information, delivering a more sophisticated form of customer understanding and engagement.  

CX Transformation Addresses Pain Points

The importance of CX as part of digital transformation is often instinctive, but companies can struggle to make their vision a reality.  

For instance, attaining senior level buy-in can be an early pain point because – unlike targeted sales and marketing activities – the ROI around CX can be hard to prove. Customer experience transformation can hinge on culture change, so CX evangelists must win hearts and minds within the organization to deliver long-lasting (and required) improvements.  

There is also a need to address the capabilities of existing systems before the vision of customer centricity can become a reality. The best customer management systems seamlessly integrate customer data from across the customer journey, leveraging advanced analytics in real time and turning generated information into actionable insights.  

Digital maturity also plays a part in the transformation. Some degree of data engineering is required before big data solutions can be deployed, a roadblock that can stall the digital journey and prevent companies from fully reaping the benefits. To quote a recent IDC blog on the subject, seamless customer experience “requires a customer-first culture combined with deep analytical maturity to support decision-making across the organization.”  

The key point to remember is that as digital transformation in enterprises gathers pace, focusing on customer experience transformation must be a strategic priority. CX transformation is not only measured in positive customer service feedback, and there are always other metrics that will can provide a snapshot of where a company currently is. Digital journeys are an ongoing process, and the decision makers who understand that sustained customer experience transformation efforts translate into more revenue and greater efficiency will not regret taking the required steps forward. 

Richard Alvarez began his career at Microsoft, during which he wrote his first book on Adobe Flash, which was published by New Riders. He has worked with multiple start-up companies, which has taught him that the digital space is constantly evolving. Prior to joining Saggezza, Richard helped form Method Engine’s philosophy of strategic design. He worked as lead IT at a small creative agency. During that time, he was key in creating technical solutions, based on consumer driven best practices.

Aparajito Sengupta, Senior Manager of UX at Infostretch, has spent 15 years as an art director, designer, visualizer and user experience manager, developing a keen eye for detail. Since 2011, he’s applied those skills at Infostretch, perfecting the intersection between usability and aesthetics to determine the best experience across all platforms and media.

Saggezza is a proven technology and consulting partner that delivers personalized, high-value solutions to accelerate business growth.

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