Before we dive in, let’s look more closely at exactly what we mean by customer-first digital business process transformation.
Before we dive in, let’s look more closely at exactly what we mean by customer-first digital business process transformation. Customer-first digital business process transformation covers how businesses use digital tools to change the way specific processes run, within their organization, towards a tangible customer outcome.
Digital business process transformation differs from business process transformation only in so far as it focuses purely on the use of digital tools. In this way, all digital business process transformation falls under the umbrella—or is a subset—of business process transformation. As such, not all business process transformation will fall under digital business process transformation.
There are some other definitions it’s useful to clear up:
Digitization
…is the process of converting physical or analog things into something digital. For example, a restaurant replacing all physical menus with a web-based alternative accessed via QR code.
Digitalization
…is the process of using digital tools or technologies to change business models to increase efficiency, value, or revenue. For example, automating a workflow like expenses reimbursement. Typically, this would involve the creation of a PDF invoice and a string of emails between various departments. Digitalization could allow a business to use a form-based system whereby an employee inputs the details of their expenses. The completed form is automatically sent to their line manager for approval, and then sent to the finance department for processing directly.
Digital transformation
…covers multiple initiatives and processes which combine as part of a much larger change initiative within an organization. In this way, digitization and digitalization are both parts of digital transformation. An example of digital transformation might be a business implementing a web-based CRM tool to totally reimagine how to connect with customers
Digital business process transformation will involve elements digitization but will predominantly come under the realm of digitalization. Digital business process transformation sits under digital transformation because we are talking about disruption at a process level.
1. Why is a customer-first approach so important?
According to research by Boston Consulting Group, just 30% of transformations meet or exceed their target value and result in sustainable change. Why is the number so low? In part, because some businesses use a product-first mindset rather than a customer-first mindset when they approach transformation.
A customer-first approach focuses your efforts into areas that create tangible value for your customers, especially when it comes to improved customer experience (CX). 89% of businesses compete primarily on the basis of CX and 73% of consumers say that CX is a factor when making purchase decisions, according to research by SmartKarrot. Businesses who use their digital business process transformation to address and change in areas that improve CX gain a critical advantage.
2. What are the critical steps when digitally transforming business processes?
Before you begin your digital business process transformation journey, you need to understand how ready your business is for that process. If you’ve yet to do that, we would strongly recommend checking out our page on business process transformation readiness first. The page explains what you need to do in the exploration phase before the transformation itself.
Alternatively, you can read on to get an overview of the process.
The first thing to understand is that every business process transformation initiative, digital or otherwise, will have unique twists and turns.
But there are some stages that underpin any successful digital business process transformation initiative.
Setting specific goals
Get specific about what you want to achieve. It’s vital that you ask a lot of questions at this stage, especially when it comes to the technical aspects and the capabilities needed to deliver them. Questions include: What systems need to be connected? What skills do we have in-house for the job? Will we need to outsource all or part of the transformation? If outsourcing, is there a provider with a track record of delivering the performance we need?
Entrenching customer-first mindset
To emphasize, it’s crucial to approach transformation from a customer-first standpoint. Remember this is not a “nice-to-have”, it’s the key to ensuring your transformation does not end up part of the 70% of them that fail. When working with digital initiatives, there will likely be a higher financial cost, which means it’s all the more important to tie initiatives to customer outcomes that help you stay competitive.
Interrogating current processes and surfacing opportunities
With your customer benefit and efficiency goals clear, it’s time to examine your current processes in detail. There are a range of opportunities here to streamline the way your business works so take time to assess them and identify which processes would be most valuable to update and transform (in terms of mutual customer and business value). And identify which tasks, systems, and processes have become redundant.
Getting buy-in
Whether you’re working with an outsourcing partner or mounting your digital process transformation internally, it’s going to take time, resources, and (in most cases) external expertise. You need to get buy-in from internal stakeholders if you want your transformation process to be successful. Budgets will have a huge impact on the technologies and partners you will be able to access, so getting buy-in from C-suite and budget gatekeepers is a must.
Drawing up a detailed plan
Once you have gauged the support for business process transformation, you need a rigorous plan for how it will be delivered. Digital initiatives often involve external support, so a major decision here will be the extent of external support you will need. With this knowledge, you can assess the scope of the transformation and how disruptive it will be for your organization. This determines how in-depth your project roadmap needs to be, and how much of the process you need to outsource.
Establishing KPIs and metrics
How are you going to measure the success of the transformation? This is about a system of proactive measurement to ensure you are hitting key milestones throughout the process so you can course correct as necessary and how to measure the success of completed transformation.
This is especially important if you’re working with an outsourcing partner. You need a clear vision of what success looks like, transparency on how it will be measured, and carefully outlined processes for what happens when targets get missed.
Taking your people with you
The people who make up a business are just as fundamental to its success as its processes and systems are. As you mount a digital business process transformation, it’s vital that you take your teams on that journey with you. Do they understand why the change is being implemented? Process change necessitates employee behavior change, and that’s not always easy. The key to overcoming this is to ensure your teams understand how transformation will help them (and your customers) in the long run. Then make time for them to fully understand, appreciate, train in, and adopt the new processes.
Start small
Digital business process transformation can involve major business disruption if not managed correctly. The best way to de-risk your transformation path is to start small and iterate, learn, and test what is working well so you can apply those learnings to other parts of the business. This also helps your internal teams and customers adapt to the transition.
3. Risks and limitations of digital business process transformation
The key to keeping your disruption positive is de-risking the journey. This starts in your planning phase when you map out all the skills that will be needed to deliver the new transformation. As most digital business process transformations involve some form of outsourced support, it pays to take time to find the right partner for your process
Rushing this process in an effort to keep pace with the competition or save costs can result in a lack of reliability and compliance of your new digital processes.
For example, if you’re using a chatbot, you need to make sure that it isn’t going to run into reliability issues as soon as it goes live. Especially at a time when 68% of customers liked that a chatbot answered them quickly, according to UserLike. If you can’t deliver this, your chatbot can very quickly turn a CX building opportunity into higher customer effort and lower customer satisfaction. And if you work in heavily regulated sectors such as banking and healthcare, you need to ensure that compliance is baked into the core of your new processes or risk major brand damage.
4. What are the benefits of digital business process transformation?
Increased efficiency, revenue, and customer experience are major benefits of digitalizing business processes—but they’re just the tip of a big iceberg.
Below, we look at the key benefits of customer-first digital process transformation:
1. New markets
Digital business process transformation can allow businesses to expand into new markets. This is especially true when it comes to transformation that enables a business to operate in new digital channels.
For example, if a fashion business wanted to expand their products to a younger demographic, but they only sold via a web store, they may miss out on a big slice of the market. According to the National Retail Federation, 31% of Gen Z buyers say they prefer to shop online through non-traditional methods rather than by website. This includes shopping in-app, directly through social media, and buying through livestream. By digitally transforming their business processes to reflect this, a business could effectively expand their reach to Gen-Z customers.
As with all digital process transformation, a supporting customer experience component to accompany these processes must be in place. This is all part of a connected, multi-channel strategy centered around a customer-first approach. This approach is all about identifying a need and catering to it in the most efficient and comprehensive way.
2. Better process innovation
Businesses that excel with digital business process transformation are the ones that understand the relationship between pure digital process improvements and a human touch. For example, while chatbots can increase efficiency and customer satisfaction, they need to be deployed with a customer-first mindset.
54% of customers would use a chatbot to ask about a product, 30% would use it to pay a bill, but only 23% would be willing to settle disputes through bots, according to research from UserLike. So understanding how and when to deploy such technologies—and balancing them with a human touch—is vitally important. The more you innovate in this balanced way, the more data you collect about what works. This data can then inform new transformations you pursue in future.
3. Employee support
Digital business process transformation is also an opportunity to improve employee experiences with better access to data and increased flexibility and support. For example, with smart use of Interactive Voice Response (IVR) technology and AI, you can empower calling agents with self-service data integrations, callback options, and predictive applications that anticipate customer behavior, lower cost per contact, and improve CX and employee experience.
But digital business process transformation can also enable you to offer more flexible working practices, such as work-from-home options for calling agents, traditionally one of the most centralized resources. According to TechRepublic, an incredible one in three employees say they may quit their jobs if they were not able to work from home. This underlines how vital a concern this is for businesses that want to keep and attract top talent. The crucial balance is ensuring your process transformation is able to combine this flexibility with the highest standards of compliance and security.
4. Customer relationships
The increased ability to handle complex communications with new processes and technologies, can enable you to develop deeper relationships with your customers. This might include connecting customers’ online and offline journeys. For example, a retailer could allow customers to search a product on their webstore, check availability at a nearby store, and have it set aside for them to come and buy in-person.
Get these interactions right, and you can use these multi-stream journeys to create a vital feedback loop between customers and businesses. As you collect data across more diverse channels, you get an increasingly detailed picture of your customers’ wants and needs. This allows you to personalize their customer experiences more effectively. A vital concern when a huge 62% of U.S. consumers prefer personalized products and services, according to research by Salesforce.
To put it simply, if your transformation doesn’t benefit customers in meaningful ways, ROI may not come easily. A complete strategy contains customer journey mapping, channel usage, and opportunities to self-serve in the right areas.
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