What is the nature of digital transformation? Is it a permanent shift in the digitization of business processes, or a race to a known destination? Should organizational investments in data analytics, continuous software development, business processes, culture, machine learning and shifting enterprise technology from a perspective of ownership and control to consumption be judged from the eye of the consumer?
The answer seems straightforward. Eventually, the market is the ultimate arbiter of digital transformation success. However, many organizations today are busily investing in technologies they hope will serve them well in the years ahead, and some of the largest investments are not immediately visible to consumers.
According to the Kony Digital Experience 2019 Index Survey report, businesses are “still missing the mark” with consumers despite nearly $5 trillion in digital investment. The report didn’t distinguish how the $5 trillion was being spent and in what areas of the business the investments were made.
“As companies race toward digital transformation, their leaders might want to hit the pause button and reassess their efforts. The significant investments by companies around the world to transform their business to become more digital has had very little impact on consumer experience,” according to the report.
Perhaps—or, perhaps, many organizations are laying their groundwork and it’s way too early to make such a call.
According to the survey, customers (65%) are more satisfied if their digital experiences feel effortless (who wouldn’t?) and 63% of customers said they would spend more money if their digital experiences feel effortless. Of course, history is full of surveys detailing consumers stating how they’d act but consequently end up acting entirely differently; people are notorious for answering surveys how they think they should answer or how they wish they would act rather than how they do act. Famous examples include surveys on privacy, security and personal finance.
The findings of this survey are based on 1,600 respondents across the U.S., Europe and Asia. According to Kony, 800 were participants or leaders of digital transformation initiatives in organizations with 500 or more employees.
The study focused on business investments and customer experiences within the banking, retail, utilities and healthcare industries.
Interestingly, respondents said organizations in banking (54%), retail (59%) and utilities (51%) are keeping pace with their expectations but are not delivering differentiated digital experiences. The big laggard was health care, with only 48% keeping pace and 20% being behind respondents’ expectations.
The study concludes businesses are not listening to—or understanding—the evolving needs of their customers because only 28% of enterprise digital transformation initiatives are started specifically with customer needs as the priority.
“Improvements in costs and efficiencies are always welcomed and clearly important to project funding, but the real returns and real impact of digital starts and stops with its impact on the customer experience,” said Thomas E. Hogan, chairman and CEO of Kony Inc.
That’s an incomplete way of looking at what is happening when it comes to digital transformation and the scope of technological change underway. That figure and comment are based on the survey findings that 68% of digital transformations were business process-centered, 4% employee experience-centered and 28% customer experience-centered.
My take: In most cases, business leadership knows what they need to do and where they need to place their primary focus. And it’s a tough call to broadly state businesses are missing the mark without looking at how specific businesses are choosing to invest, as well as their stated objectives. Such information was not available in the survey.
In many—if not most—cases, businesses are focusing on what they need to do, such as eliminating technical debt, automating business processes with robotic processes, streamlining their development pipelines and more. Of course, it’s essential to provide quality experiences to customers, as the survey found 47% of consumers will consider switching providers if their current provider doesn’t deliver the digital experience they demand and expect.
That said, it’s not always true that digital transformation begins and ends with the customer. Large enterprises have decades worth of technology investments they must manage, and successful digital transformation isn’t a set finish line that enterprises are rushing toward. Rather, it’s a never-ending continuum, and those enterprises that are investing in the removal of technical debt, modernizing their software delivery methods, machine learning and streamlining their businesses to be more cost-effective and agile are building platforms that will sustain their businesses and provide exceptional digital experiences over the long haul.
