Demystifying digital transformation

During this time of quarantining and social distancing, it has become easier to spot the companies that have made serious efforts to build their digital infrastructure. They’re the ones that make it easy to order contact-free takeout meals, get your groceries delivered, or apply for a mortgage online.

But what about those companies that haven’t focused on their digital makeovers? Right now, they’re feeling pretty exposed, says Janelle Estes, chief insights officer at UserTesting, which helps companies collect feedback from their customers. In fact, she says many of these companies are taking action, rushing to digitally transform in order to remain competitive in an environment where “business as usual” is more of a punch line than a strategy. “[This pandemic] has expedited the need to become more digitally centric,” Estes says. “Companies are trying to do in a few weeks or months what would usually take a couple of years.”

So what, exactly, are companies trying to do? Some are leaning on digital tools to design a killer curbside delivery experience. Others are hoping these tools will help them cut costs, boost their bottom line, and free up key employees to tackle higher-value work. In short, no two digital transformations are alike. The absence of a one-size-fits-all path toward digital transformation may explain why some companies have been slow to undertake such initiatives. A 2019 survey by UserTesting found that 44% of companies either had never heard of digital transformation or decided not to pursue it.

But while the approaches may vary, the goals are often the same, says Ryan Garner, managing director of experience design and optimization at Accenture Interactive, the digital arm of consulting giant Accenture. As he puts it, “Happier customers, happier employees, [equal] healthier businesses.”

THE POWER OF DATA

Tsedal Neeley, the Naylor Fitzhugh Professor of Business Administration at the Harvard Business School, has been closely following the digital evolution in recent years. Early on, the goals of a digital transformation were pretty simple: to turn paper documents into digital copies that are more easily stored, searched, and organized.

These days, the transformations are much broader, thanks to the emergence of technologies such as artificial intelligence, cloud computing, and IoT-enabled devices. “The convergence of these digital technologies has marked a real shift,” Neelsey says. “They’ve really changed business practices.”

These tools let companies capture and analyze vast amounts of data, from internal performance metrics to granular customer preferences. Armed with that information, companies typically focus on redesigning systems and processes to accomplish two key goals: move faster to react and adapt to shifting trends, and make collaboration easier both inside the company and with its clients and customers. For instance, splitting departments into smaller, agile teams may help a company more quickly act on opportunities uncovered by its data analysis. Or a company may radically streamline the process of how customer feedback guides company strategy. “You’re able to do these things and have these new approaches because of the data you have access to,” Neeley says.

SOLVING REAL PROBLEMS

According to Accenture Interactive’s Garner, most digital transformations clients undertake are focused squarely on improving the customer experience. “I’d say this is now at the epicenter of most transformations, with employee experience coming on strong,” he says. “If you’re not solving problems for customers or employees, what’s the point?”

So how can companies take the fast track to creating an effective digital experience? First, they need to figure out what problems their customers want to solve, whether it’s using their smartphone to order a mocha latte or to apply for a jumbo mortgage. “Spend time identifying, validating, and prioritizing the set of problems most worth solving for your business and customers,” Garner says. “Then, focus your investments on solving them in a disciplined way.”

Next, companies need to ask if their tool is easy to use. For instance, does it take 14 clicks and swipes to order that coffee? If the answer is yes, then it’s back to the drawing board. But if the process is easy, companies can move on to the more challenging third step: How does it make customers feel? Companies see strong results if they’re able to make authentic connections. But these connections are hard to get right if you don’t truly understand your customers.

That’s where data can help. Companies can mine data from customer-support calls or gather feedback from online surveys to paint a picture of how delightful these digital experiences are for customers. Some companies go relatively low-tech, inviting customers in for focus groups and tallying their responses. Others get more sophisticated, using facial recognition technologies to measure customers’ fleeting reactions during a transaction.

Finally, Estes warns that in these pandemic-laden days, companies should avoid getting too ambitious with their digital transitions. She suggests reining in the temptation to design a unique experience with unfamiliar interactions in favor of one that simply does what customers want—and does it as expected. “At a time like this, people are looking for familiarity in their experiences and don’t have the desire to relearn a new way of doing a commonly performed action,” she says. “They just want to get their stuff done, and have the experience be as straightforward as possible.”