Digital transformation is an overused term across all sectors. But many organisations are still missing out on opportunities to increase competitive differentiation as they struggle to embrace new digital technologies quickly enough and respond to changing customer demands.
Enabling business processes and practices that help an organisation to compete effectively in an increasingly digital world, according to the MIT Sloan Management Review, is the best way to tackle digital transformation. This challenge is further intensified with the pressure to innovate, which is being driven by the demands of the 21st-century savvy consumer, who expects a compelling interactive experience across all interaction channels.
Although recognising the potential pay-off for enabling a better digital experience, IT departments face the uphill battle of delivering more at a rapid pace, and in many cases with fewer resources and less budget. They face barriers such as controlling the growth of ‘shadow IT’, a lack of control and standardisation, disparate data sources, and fragmented system estates.
The rapid pace of innovation requires IT to quickly build digital service delivery models that are flexible, robust and future-proofed. The move to continuous development, combining product development and IT resources in a DevOps model and using new platform-based software models such as low-code, is becoming increasingly important. IT leaders need to be able to drive incremental improvements, support rapid change, and manage communication services, while delivering demonstrable returns at every stage.
Additionally, IT must manage the shift from transactional ‘systems of record’, where information is ingested, stored and managed in static databases and warehouses, to interactive ‘systems of engagement’. This is where dynamic, real-time data is combined, accessed, interpreted and used to digitally support multi-touchpoint, real-time customer journeys and communications.
Implementing this agile, future-proofed model is an IT imperative in order to deliver digital services that contribute to both customer experience innovation and the bottom line. To make this model a reality, CIOs and digital transformation leads will need to address six key challenges:
Pace of change – As expectations increase, and despite some budget assigned to facilitate change, the demands faced by the IT department often outpace its ability to deliver. The IT function needs to evolve its approach and use of tools in order to be able to meet the pace of change required. This impacts the relationship and the way it assesses, develops and deploys services to the business.
Capacity gap – External demands on IT teams, coupled with constraints of traditional capabilities, resourcing and legacy infrastructure, leads to an IT capacity gap. Time and delivery pressures are soaking up resources that could be better deployed providing innovation aligned to business needs. Projects fail to hit timescales and product quality expectations leading to unsatisfied internal, and more importantly external, stakeholders. This cannot be fixed by incremental improvements but requires a fundamental change in the IT operating model for the delivery of services.
Skills shortage – Most organisations lack the breadth and scale of digital talent required to deliver the necessary changes. Skills in new technologies – IoT, AI, multichannel communications – are in short supply, and IT specialists have always been light on their understanding and awareness of usability and user experience. Finding external help can be valuable, but if outsourcing is overused, organisations lose critical skills, often with disastrous consequences. Transforming customer experience requires new skills and collaborative ways of working with those who already understand customer-facing processes, in order to better exploit existing capabilities.
Risk – There are increased risks from the fragmentation of IT systems and digital communications that need to be dealt with. Hyper-connectivity is increasing the risks of intrusion; all levels of the organisation are increasingly aware of data, network and device vulnerabilities. The issue is firmly on to the board-level agenda but IT teams are still seen as responsible for managing any impact of any information security breach. This must be done while trying to provide a flexible approach to innovation.
Fragmentation of IT – A significant and growing part of IT spend comes from budgets outside of the IT department, resulting in a partial loss of control, although ultimate responsibility still sits with IT. Yet there is value in supporting user choice and business-led innovation. IT needs to be able to offer innovative solutions to orchestrate, support and deliver what the rest of the business needs in order to regain its leadership of the technology agenda.
Legacy – Much IT infrastructure has grown organically, organised in silos around its initial purpose, now often lost in time and lacking the ability to interact with customer touchpoints, communications services and triggers. It is fragile and difficult to change. IT now needs to be able to deliver services that are provisioned quickly and cheaply, to support both rapid innovation and scalability. Virtualisation, automation and cloud-based services have opened up new opportunities, but this needs to be taken further.
To learn more about these challenges, and how to solve them by changing your digital service delivery model, read the new white paper from the IT analysts at Quocirca.
Produced in partnership with IMImobile, the paper explores the challenges faced by IT in its pivotal role in digital customer experience transformation, and examines the changes that must be made to enable rapid CX innovation and deliver competitive advantages to your business.