Digital Transformation

I just finished reading some articles in the WSJ on Digital Transformation and AI. I am fairly well versed on these topics as I have been in the trenches to such transformations ranging from developing user experiences to digital personas.

It continues to amaze me how today's CEO and CIO's know so little about what it takes to move a digital company.  The love of labels, titles, acronyms and tools with so little understanding of the organization, process and data elements that are so foundational to enable such a transformation. So, before you claim to be a digital innovation expert or even an evangelist, ask yourself the following questions first:

•  Do you understand that digital starts with data? 
•  Do you understand that digital means and willing to make hard choices on organizational alignment; breaking down cultural, system and process silos?
• Are you willing to suffer the ramifications of being a change agent which often requires undertaking these organizational and cultural aspects of becoming digital? 
• Do you even know how to apply the data you have?  
• Do you understand the problems you seeking to solve and the questions you need answered? 
• Do you really know how AI can be applied in your organization? 
• Is a orchestration based ROBOT equal to AI?
• Are you willing to take the journey that is evolutionary and incremental?    

Where a Digital Journey Starts

A digital journey starts at home. Understand your data, its structure and relationships. This is hard especially in organizations with a years of legacy. Understand your processes and be prepared to reorganize these process. This may translate to reorganizing elements of your organization and systems. Be prepared to deal with all the vested interests across the spectrum of organization and technology within your organization. Lastly, be on the look out for the tool "dejure" that will solve all your problems. Believe me they will be proposed.  If you believe that a tool or tool suite is all you need to start become digital, do you self and your organization a favor - solve another problem.

The hard truth is that 80% of executives that claim they are "spearheading" a digital transformation are only touching the problem on the edges and spending a lot of money for little value.

If you understand this, then your are ready to take the next step...

Are you still prepared to undertake this?  Good.  Next you must be willing to realize that becoming digital is journey and requires long term funding and vision. This requires developing a plan identifying and realizing incremental value along the way and securing investment.

Becoming digital requires you to understand on where you are at as a company.  If starting from zero, yield is often low. You will only realize exponentially greater yield as the success of your transformation matures. If you company is exclusively run by a typical short term financial only mindset and insists on reasonable ROI in early years of adoption; then you probably will not be successful not matter at what stage your are.  

Executive leadership must  be willing to take the journey and be wise enough to understand adoption  requires a long term financial commitment. He or she must be willing to accept foundational changes first that often don't immediately yield business results worth the investment. 

The Hard Truth...

I am tired of of hearing all the executive pundits claim how they are becoming  digital. Most of it  is noise. They are not. They are beefing up their ego's and sense of self worth and/or positioning themselves for their next job.

My current CIO, now former, as he just left was like this and left a wake of destruction. The CEO did not understand what becoming digital means. He just read the press and said to himself, yea, I want to become that.  He did not even know that in his industry, he had no choice.. either do or die a slow death. Brilliant insight for his salary, bonus and options.

The hard truth, these type of CEO's, CFO's and CIO's are a dime a dozen in today's world. Worse, they think they can buy tools and outsource their way to the future. In their minds, their problem is that don't have enough H type visa's. No self-reflection of their own lacking. After all tacit knowledge equals explicit knowledge and all knowledge is a commodity - isn't it?

All I want is my banner of being a leader. "Digital", "Transformative" and "Innovative". This will allow me to personally survive a few more years then take my parachute. It may even get my investors off my back or even attract new investors. Maybe my stock price will go up. I wonder how may shares I have now?  Leave me alone so I can expound on my accomplishments.  

The Data First, not the Tool...

Companies have always claimed that they prioritize their customers’ needs. Yet, customers have never had more power than they do today. They increasingly demand personalized attention, fast service and a consistent, excellent experience across every touch point.

In fact, Forrester calls this era the “age of the customer” and predicts that 2016 is the year companies will either succeed or fail in their efforts to adapt to today’s digitally savvy, empowered buyers.

The good news is that organizations have tremendous opportunities to leverage data to better understand customers and improve their experience. The key is to know how to capture that data, manipulate it in ways that lead to new insights and then take action to gain competitive advantage.

Unique Customer Insights

What can give a company a unique perspective into the customer experience? We help a broad range of organizations deliver IT services to their end users. For many of these clients, we implement personas — detailed definitions of groups of end users who require a particular set of devices, applications and IT support.

With personas in place, we can capture data about end-user behaviors that give us insights into how they consume technology and the type of IT experience they expect. These insights are directly transferable to how customers interact with brands.

There’s a broad range of data that we can capture that helps us understand user preferences by persona. This data includes information spanning age, income, location and industry. The data delves into more detail as we can find out customers’ technology consumption patterns, the devices they use, as well as the IT problems they have experienced.

In addition, we can look at how they consume IT support — their contact preferences, whether they try self-service and then call the service desk, that sort of thing. We can see whether certain types of problems result in certain behaviors — for example, maybe a password problem generates a call, but an application problem drives self-service.

We can also watch behaviors change over time. For example, Millennial's are recognized as digital natives who have high expectations for a fast, always-on experience. But Gen Xers and Boomers are catching up quickly. As these older generations become more comfortable with technology, they’re behaving more like Millennial's, and their expectations for customer experience are rising in parallel.

The User Is in the Data

For organizations that want to leverage data to improve customer experience, the good news is that they’re probably already capturing relevant information in their transaction systems. The bad news is that this information tends to remain stranded in silos. Therefore, organizations will need to aggregate and normalize that data so they can analyze it and gain valuable insights.

Leveraging data is a bigger challenge for more established companies that still rely on legacy systems. But it’s an issue for any company that interacts with customers across channels: through direct sales, in a retail store, through a call center, over the web, on mobile platforms, through social media and so on. You need to gain a view of customers through each channel.But you also need to get a picture of customers across channels.

This is as much a technical challenge as an organizational one. You can’t use different data models for different customers and different channels and expect to achieve a unified view. So you need to normalize your customer data in a way that you can analyze it to gain a true picture of customer preferences and behavior.

From Experience to Retention

Based on my insights, we know that end users increasingly have these expectations for customer experience:

• They want a simple and streamlined buying process.
• If they can’t get answers immediately, they’ll quickly go somewhere else.
• These preferences and behaviors are consistent throughout the buying journey, from information gathering, to transaction, to after-sales service.
• Their price sensitivity or willingness to “shop around” varies by persona or demographic.

In many cases they, prefer self-service, but some personas prefer to be walked through the process.

Finally, customer experience has a direct impact on retention rates. Customers have less and less patience if they’re not immediately satisfied. Online, mobile and social channels give them instant access to your competitors. If they’re not happy with your brand, it’s relatively painless for them to find another.

But organizations that learn how to leverage customer data can increasingly serve customers the way they want to be served. They can use their insights to deliver a superior customer experience and retain customers over the long-term.

IT consumers and many traditional software companies truly do not understand the full nature of the transformation occurring in the industry.  It surprises me how many IT executives confuse the cloud with SaaS. SaaS is a business model and software channel which is better delivered through cloud technology in order to drive the right economics.  Architectural patterns that we use to construct good "software as service" solutions are not orthogonal to good software practice in general. The primary difference is that within SaaS models, some of this practice is not optional, including a good business plan, if you want to successfully get to market. 

The future of SaaS is still yet to be realized. In my view, SaaS models will potentially become the next wave of outsourcing where applications are combined at the business process level and delivered holistically to the consumer and/ or the consumer or the integrator will manage all the associated piece parts to construct the total solution. This virtual application construct is  the vision of SaaS. The “Cloud” is only a means to this end. The future  solutions will change how our customers will construct solutions to support their business. To some extent we are on the road to realizing the vision of the phrase coined in the early in the 90’s, "The network is the computer."

In the near future, we will start to see specialty services that are developed to be consumed through these service approaches across the cloud that will allow solutions to be created as a collection of a processes working in unison delivered from separate parties. Cloud automation and broker services need to start managing not only the deployment of virtual applications across clouds, but the construction of virtual applications across suppliers. These services will be easily decoupled and re- coupled allowing business a mean to adjust not only their business process but process supplier relationships.

We need to start understanding that traditional application servers are commodity items and will less a part of future IT spend.  The future are frameworks that support adoption to cloud models in terms  dynamic "horizontal" elasticity, resource isolation, and fault tolerance/ self healing to automation, billing and mufti-tenancy. Applications are simply better positioned, SaaS or not - if they are built with these elements in mind as a part of application design.

The underlying economic value inherent in the efficiency of these types of applications will drive down the cost of operating and deploying software. The winning next generation platform - Platform as a Service, will in affect, will become the new application server  of the future. Openness and integration especially to these different services, components, mash ups, etc. need to be managed in the context of a global application.  PaaS platforms will have to show how developers can adopt all these services easily within their application at a level of abstraction that will mitigate (not eliminate) the cost of lock-in. More importantly, PaaS vendors need to make the economic case for new software models presented by their solutions in contrast to other areas of IT spend and software investments.