Digital transformations are underway at most large businesses as they respond to customers' adoption of smart devices, with organisations working hard to harness the efficiency gains arising from channelling as much as possible through websites and apps.
However, in its latest research, Coeus Consulting warns that its experience shows many such initiatives are failing through too much focus on creating a shiny new veneer of webpages and apps, with not enough thought going to the core of the business, its culture and back office systems.
Coeus Consulting, an independent IT advisory and consultancy, highlights the problems many businesses are encountering in its new white paper: ‘Digital is Easy’ (www.coeusconsulting.co.uk/digital/). The research identifies four key areas that need attention in order for any organisation to execute a successful digital transformation:
1. Legacy IT systems: legacy IT systems and the interfaces into them require transforming, to ensure new technology is not held back by slow-moving central IT.
2. Operational change: business transformation and process change.
3. Culture: organisational-wide cultural change is needed to support the new ways of working (including ensuring the necessary behaviours, skills and approach)
4. Execution: strong governance, as well as project and programme management, are needed to ensure the transformation stays focussed, on track and delivers the required benefits.
Ben Barry, Head of Strategy at Coeus Consulting and co-author of the report comments, “The pace of digital transformation is moving like never before. For companies to succeed we believe they must understand their existing landscape as well as the challenges from the complexity of new interfaces into their existing IT systems, the changes needed to business processes together with employee behavioural change.
“These all need to be addressed in order to execute a digital strategy successfully. However, we have seen these elements often get looked at late in the process, or after new technology is live, meaning little or no return on the investment.”
Matthew Headford, Head of Technology and Architecture at Coeus Consulting, also warns that "the back offices which support the shiny new digital platforms are often neglected and therefore put under strain.” Matthew adds: "If backend systems cannot support the innovative new ways in which your customer-facing systems are being transformed, then our experience is that you will ultimately end up with dissatisfied customers."
In support of their warning, Coeus cites a number of their experiences:
- One organisation recently invested in a new web presence, only to find that each customer page load needed 20 calls to the database (due to the old data design). This slowed the website down to such an extent that the customer experience was completely ruined.
- Digital is about flexibility and the ability to react quickly. One business’s attempts to deliver this floundered because, while the app team could deliver continuous updates, the underlying data had to come from a large central enterprise resource programme (ERP) with a six-month development cycle.
- The channel shift in contact centres is a great example. Moving customers from phone to online switches much of the interaction to digital channels, such as chat. Sounds a straightforward change, but actually adding chat to voice communications presents various employee challenges, such as existing versus new skill sets. There is also the brand risk from more informal interactions with customers by a staff population with a high churn rate
However, Coeus says that there are nonetheless huge prizes for businesses who achieve digital success. Examples of these include:
- Bookmaker Paddy Power has transformed itself from owning a host of local gambling organisations to becoming a successful international gambling platform.
- Tesco surpassed the expectations of its customers by providing a new iPhone bar-code scanning app. It is a great example of a brand that stretched the use of technologies to provide greater utility to customers than even they might expect.
- Aggregators such as comparethemarket.com and moneysupermarket.com have made shopping online for highly regulated services simple and effective (and highly profitable for these businesses in the process).