Understanding and owning the customer ecosystem
Article

Understanding and owning the customer ecosystem

Ben Reason
  • Ben Reason
  • Founding Partner
Take aways
  • Customer satisfaction improves if digital transformation is seamless and customer-centric.
  • Digital transformation succeeds only when it is prioritised in the overall business strategy.
  • Breaking down silos and aligning internal processes foster digital transformation.

Many organisations are not ready for the digital transformation, and thus fail to deliver a seamless experience to customers or frustrate them even more. Common issues include an absence of an encompassing digital strategy, siloed departments, and insufficient understanding and commitment across the organisation. To succeed in this game is to prioritise digital transformation in the overall strategy, focus first on business functions which are more suitable for this change, and realign internal processes based on customer needs.

As the business world is being transformed digitally, established household names are going toe to toe with new kids on the block, and in some cases their customers are becoming their competitors. In a digital world, the product is no longer the differentiator. It is more about owning the ecosystem. We have identified at least six hurdles among organisations in their journey of digital transformation.

Hurdle 1: Not designed for adaptive change

Many organisations were not designed to be adaptive to the digital environment. The ones with a longer history or a larger size are entrenched in their own rigid internal processes or silos. Some of them have an operating business model which does not enable incremental changes across the organisation, therefore delaying digitalisation efforts.

Hurdle 2: Perplexed leadership hinders adoption

The senior management of many organisations are still struggling to fully understand what digitalisation means, and how this is a business case. When the top guys are unsure, it is difficult for the rest of the organisation to commit to it. It usually results in piecemeal and ineffective digital initiatives – a bad experience that pushes customers back to non-digital means.

Hurdle 3: Lacks a long-term digital strategy

Digital transformation is not just a one-off IT-related change. Digital experience evolves with customers continuously. Organisations which embrace digitalisation must be proactive and able to align their systems and processes to the behaviour of their customers. However, many digitally not-savvy organisations don’t see digital transformation as a key part of their business. Therefore, changes to systems and processes remain inwardly focused.

Today there are more than 10 billion things connected to the internet - by 2020, that number will grow to 50 billion

Hurdle 4: Legacy IT systems

Another challenge is the legacy IT systems which are heavily interconnected with other processes and departments. Oftentimes, existing systems are not properly documented, slowing down any change in the fundamental architecture of systems.

Hurdle 5: When IT department itself becomes a silo

When a new department is created to lead the digital transformation, it likely has its own processes or even products. Very quickly, a silo is created. The organisation’s technology roadmap becomes even more complex. If other departments don’t really understand digitalisation, they may as well start operating in silo.

Hurdle 6: Constrained by internal processes

In many organisations, digital capabilities are designed around the constraints of their internal processes and technology. As a result, customers are offered products that can only be used across certain channels, therefore limiting their choices and leading to frustration.

To succeed is to prioritise

Customers and businesses are much more connected with each other than ever. To succeed in this digital transformation is to prioritise it in the overall strategy, focus on business functions which are more suitable for this change, and realign internal processes based on customer needs.