BPM: A key step towards Process Digitization, in turn, aiding Digital Transformation

BPM“Digital” and “Customer-centricity” has been key agenda items for many organizations nowadays. Broadly speaking, digital transformation entails 3 aspects (a) Greatly improving customer experience (b) process digitization and (c) rethinking/recreating new business models. Majority of the firms are focusing on (a) and (b).

Companies must tackle customer experience and process automation together to be able to leap-frog in digital transformation.

Part of process digitization is automating the existing business processes and gaining efficiencies. That’s where Business Process Management (BPM) comes in.

BPM is ….

… end-to-end business process improvement leveraging technology, innovation and human capital. BPM is not a product or service that you buy, it is something you do.

BPM strives to enable partnership between business, marketing, sales, operations, IT, customer service, product development, etc. – basically, all aspects of business, for better customer outcomes and operational agility. BPM enables an organization to develop business processes as “reusable assets” that can be leveraged partially or in whole, similar to enterprise data.

Why now? What are the current business process issues?

Big organizations have processes and applications that were built over a decade ago. Since then add-on functionalities have been patched over years. So, this has caused several problems –

  • Business Processes are poorly defined or understood within organizations, impeding visibility and strategic planning.
  • Metrics and KPIs are often very hard to measure, thereby limiting good decision-making
  • Business Processes are inconsistent across organizational or geographical silos.
  • Changes to the business strategy take too long to realize. Changes too hard to implement in business process and takes several weeks to months
  • Existing business processes and underlying systems restrict the business from innovating or creating market differentiation.
  • Lack of alignment of Business Processes with strategic goals and objectives
  • Business Processes involve unnecessary delays: due to manually intensive tasks, inefficient and/or redundant steps, or restrictions due to governance/ technology / organization.

If organization need to innovate, they must redesign business processes and adapt “Build once, leverage many times” mantra.

By 2017, 70 percent of successful digital business models will rely on deliberately unstable processes designed to shift with customers’ needs (Source: Gartner)

Deliberately unstable processes are designed for change and can dynamically adjust to customers’ needs.

BPM is “Internal” process improvement (not External)

Digital transformation can be looked at from two lens – from eyes of customer (external) and internal. BPM is internal part and provides all the capabilities to enable cool external features for end customers like blending digital+physical worlds, IoT, sensors, smart phone apps, wearables etc.

A few Business use cases that can be addressed by BPM

I’ll list some use cases as food for thought. It is recommended to pick use cases / business process that have high value and high impact, for BPM projects.

  1. Usecase 1: How to? New business initiatives and innovation, Time to market, Agility, etc
    • Answer: With BPM, you can simulate “what-if” scenarios. With process simulation, you can do cost-benefit analysis on processes well before the processes are implemented.
  2. Usecase 2: How to? Gaining operational efficiency
    • Answer: Business Activity Monitoring (BAM) provides end-to-end process view of all costs and throughput (people and technology); BPM enables monitoring compliance of key processes.
  3. Usecase 3: How to? Process standardization across geographies for ‘Performance management’
    • Answer: BPM can help define consistent and global definition of processes (centralizing business process and business rules) along-with ways to standardized KPIs for measuring performance. BPM helps move from paper-based processing to automated workflow.

Bottom-line

You may ask – I am focused on building customer experience, so, how important is BPM for me?  Very important, it’s like 2 sides of same coin.  BPM is the like the foundation to a house…. and the orchestration of the digital enterprise.  You can only enable great customer experiences provided underlying processes and technology is robust. Key point being that technology, marketing and business are now one entity in their delivery of value into digital age. All organization must  recognize “process as core business asset”.

Being relevant today requires increasing focus on customer focus, innovation and speed-to-market. BPM is a core requirement for the Digital Enterprise. BPM market is expected to grow from $3.4 billion to $10 billion by 2020 – a huge opportunity for consulting firms.

What do you think? Is your organization undertaking BPM effort and if so, what success has it seen so far? Please chime in with your thoughts.

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Digital Transformation vs. Digital Strategy vs. Digital Marketing

A growing number of firms are embarking on digital initiatives like digital marketing programs on social media, email campaigns, RWD website design to reach customers across any devices, mobile apps, etc for their customers. Whether these are all part of digital transformation strategic effort, or just digital marketing tactic approaches is debatable – every stakeholder might have a different answer to such questions.

Digital Transformation in a nutshell

“Digital Transformation is the use of technology to radically improve performance or reach of enterprises” (Source: MIT Sloan). Digital Transformation is about rethinking business model and building new ways of growth from scratch leveraging principles of innovation (artificial intelligence, robotics, sensors, analytics, cloud computing, mobility, open-source, etc), design thinking, agile development (embracing change, fast and lean development) and establishing digital culture.

Digital transformation approach should entail 1) greatly improving and/or recreating customer experience 2) digitizing operational processes and 3) recreating new business models.

Digital Strategy in a nutshell

Digital Strategy is about leveraging digital technologies to meet strategic objectives either at organization level or line-of-business level. It’s basically about answering – “Where do we want to be in next 3-5 years?” (long-term future). Few examples of Digital technologies include automation of email marketing, CRM integration, provide self-service to customers, personalization, etc. Delivering a consistent, intuitive user experience is one of the key goals of digital strategy i.e. digital strategy should be customer-focused.

Unlike traditional business or IT strategy with annual budgets, digital strategy is focused on short-term objectives, near-term budget with constant learning, improvements and innovation.

Digital Strategy is a 4-step process

  1. Digital Review: Understanding business objectives, consumer insights, SWOT analysis, competitive analysis
  2. Digital Vision & priorities: Digital vision (future-oriented statement of intent for how digital channels and technologies will be used to drive business), Prioritized list of Year 1, Year 2, etc. activities
  3. Digital Plan: Tactics; Digital Customer Experience Development including customer journeys, personas, user interaction, etc.
  4. Measurement plan: A framework to measure success and performance

Digital Marketing in a nutshell

“Digital Marketing is a marketing tactic used to attract, engage and convert customers online”. Below are some top 10 digital marketing tactics

  1. Content Marketing
  2. Social Media Marketing
  3. SEO
  4. PPC (paid search)
  5. Advertising Management
  6. Lead Generation
  7. Remarketing
  8. A/B Testing
  9. Affiliate Marketing
  10. Analytics, etc.

Digital Transformation and Digital Strategy is strategic in nature, whereas Digital Marketing is very tactical or operational in nature.

Digital Customer Experience: Holistic way to engage new-age customers

Digital Customer Experience

This is age of customer. All organizations know that great customer experience attracts customers in turn builds brand, enhances loyalty and drives revenue. This is all the more important with online interactions (vs. physical stores). Customers have very little patience when pages don’t load fast, when they don’t find relevant content, when they find differing content across channels, when the interaction on desktop is different compared to customer service, when they are not able to search, when certain actions takes more than a few clicks to fulfill their goals, on and on — any of these is just enough reason for customer to jump to competitors.

Customers, especially on digital channels, are looking for seamless experiences. The challenge for companies today is how to deliver a consistent brand at every point where they touch their potential ‘omni-channel’ customers.

Stats tell stories and predict where the market is headed –

By 2018, more than 50% of organizations will redirect their investments to customer experience innovations. (Source: Gartner)

Emerging technology plays a big role in firms’ profitability and their customers’ digital experiences. Yet enterprises struggle with the speed of new technology delivery.(Source: Forrester)

82% view the customer experience as a competitive differentiator, and view accuracy and quality of information provided (82%), as well as ease of interaction (73%), as the most important attributes of a quality customer experience..(Source: Deloitte Survey)

Organizations’ top 3 innovation projects planned for 2015 involve customer experience, product & marketing technology. (Source: CMO Spend Survey 2015 by Laura McLellan, Gartner, October 2014)

All of these are telling on the importance of great digital customer experience. Customer demands are high and competition is fierce.

Functional Elements of Digital Experience

In general, Digital Customer Experience entails supporting following functionalities, all necessary to support customer journey lifecycle.

  • Content Management (including Digital Asset Management)
  • Video Management
  • Commerce
  • Personalization
  • Web Analytics
  • Segmentation
  • Visualization
  • Market Automation like email marketing, lead management, social marketing, lead nurturing/scoring
  • CRM integration
  • Social Media integration
  • Campaign Management
  • Advertising
  • Mobile App
  • A/B testing
  • Customer Data Management

Where do you start?

Step 1: Like any major initiatives, identify business objectives and goals, and overarching strategy.

Step 2: Define “Customer Journeys” – understanding customer goals, motivations, needs, wants, interactions across channels is very important. Content, Context, Personalization are important considerations.

Step 3: Then select a DiEx platform that not just meets the needs of present, but platform that can sustain innovative changes in next 3-5 years. Integration with external systems/applications is key factor too.

Step 4: Collect data across all customer touch-points and analyse. Don’t think of DiEx as one off project, rather it is a journeys which would need constant experimentation and tweaking.

Create a long-term Roadmap for your Digital Journey: Create a roadmap to build features onto platform. E.g. If you already have Content Management / eCommerce site, then consider building Personalization, RWD or mobile experience, and Customer Self-Service across user segments. Measure using analytics. Then, integrate other features as per business need.

Point is not to boil the ocean, rather gain short-term wins first, learn, and embark on next investment priority.

Digital Experience Platform Vendors 

DiEx is a software used to create and manage omni-channel customer experiences across all phases of customer life cycle.  These platforms are an outgrowth of traditional Content Management vendors, eCommerce vendors, enterprise vendors. Broadly, divided into 3 market segments –

  1. Content Management centric platforms: Adobe Marketing Cloud, SDL Customer Experience Cloud, Sitecore Experience Platform, Acquia
  2. eCommerce-centric platforms: Demandware Commerce Cloud, Hybris/SAP, Digital River Global Commerce, Magento
  3. Enterprise centric platforms: IBM Digital Experience Suite, Oracle CX Cloud, Salesforce Customer Success Platform, SAP Hana

The capabilities across these vendors vary. Many of above DiEx platforms serve and support all digital customer experiences across the customer journey.  The deployment model varies – on-premise, SaaS, PaaS or hosted.

Adobe is DiEx leader, per Forrester. If you want to dig deeper from Architecture perspective, read Forrester’s take on DiEx platform.

Conclusion

In this age of connected or always-on consumer, firms must optimize the use of digital tools and technologies to provide beautiful, seamless and meaningful (goal oriented) customer experience. It’s a new business imperative.

Firms must also treat the creation and execution of digital customer experiences as strategic, vs. delegating it to marketing department.

Lastly, investments in digital customer experience technology is a must to delivering exceptional experiences.

Get used to DiEx is happening now and here to stay !

Digital Transformation in Financial Industry – What are companies doing about it?

Every industry is moving digital! Why? that’s because it’s the new business imperative and customers are demanding it. Go Digital or be left behind forever! – has been the mantra from all pundits and they are right. Financial industry has undergone a massive change in recent years with the change in consumer behavior and emerging digital technologies. They’re shifting their attention from merely what they need to offer customers to how to deliver more value to customers more quickly – think “value creation and engagement with customer“.

Companies that have digitally transformed across industries are outperforming their competitors financially by as much as 26% (Capgemini)

The pace of digital transformation maturity have varied across industries – some have transformed business models, some have focused on transforming customer experiences whereas a few others on digitizing a few processes.

What are the barriers/challenges?

While opportunities are plenty, there are several challenges in digital transformation journey. They include

  1. Digital Benefits vs. Risks: Many companies are risk averse and don’t quite understand the benefits of going digital. So, what is needed here is more education outlining benefits outweighing risks.
  2. Regulations and Legal/Compliance issues: Will digital technology adhere to the requirements?
  3. Infrastructure issues: Tight coupling with legacy technology systems with integration issues, preventing faster experimentation and agile delivery. Digital transformation needs integration to realize value.
  4. Digital Culture: Embracing digital culture and agile-mindset is still lacking. No measurable investments in innovation.
  5. Privacy/Security: How to balance privacy/security issues whilst providing great customer experience.
  6. Cross-channel view: Not having one view of customer.

The biggest opportunity in Financial industry, be it – insurance, retail, asset/wealth management, securities, etc – is around creating a compelling, intuitive customer experience and delivering great experiences across all channels and devices. Personalization, customization and running targeted campaign is equally important.

What are financial companies doing to get ahead in digital maturity?

Companies are beginning to realize that Technology is key enabler for digital transformation and are undertaking several initiatives like –

  • Transforming Customer Experiences
    • redesigning websites leveraging Content Management System (CMS) platforms for providing more control and flexibility to marketing to make changes to site
    • Omni-channel delivery i.e. providing seamless, consistent experience across channels and devices
    • leveraging social media platforms to enhance the brand and engage with customers
    • opening up discussion forums, creating surveys and polls for customer feedback
    • showcasing thought leadership by creating blogs and engaging with customers E.g. Better Money by Bank of America
  • Process Digitization
  • Investing in Innovation and Agile Processes
    • adopting agile and devops for faster product development and rollout
    • creating user labs where they bring customers to help them work through the very early stages of thinking about a product (E.g. CapitalOne User labs), and many other things
    • providing digital tools for asset managers, wealth managers to collaborate and engage with their clients
  • Data Analysis
    • leveraging analytics data to measure customer behavior and refine strategy thereof
  • Single view of Customer
    • developing single view of customer with investments in CRM, analytics and other marketing technologies

Trends shaping up

Trends that will most likely be mainstream in few years include –

  1. Digital advise (“high-touch” replaced by “high-tech”)
  2. Robo-advisors (AI/robots based advisor to manage clients portfolio/goals)
  3. Mobile payments, mobile wallets
  4. Crypto-currencies – digital currency that is decentralized, peer-to-peer (P2P) i.e. no central third-party. (Bitcoin, Blockchain disrupting the payments industry at global scale)
  5. Smart banking (mobile, smart deposits, online bill pay, and other avenues)
  6. FinTech – Technologies for banking, corporate finance, capital markets, commodities, financial data analytics, payments, personal financial management, and many others. See Global Fintech landscape.
  7. Biometrics authentication

Today’s empowered customer wants it all: mobile, online, social, face-to-face and everything in between. The urgent and critical task for financial institutions, esp. banks is to figure out what truly matters to their customers and deliver the experience people are looking for.

Retail Banking and Insurance are leading the digital space among all the other sectors in Financial space.

Conclusion

Digital transformation is happening in every industry, industries are taking different paths at different speeds. Eventually, in couple of years, all industries will be forced to digitally interact with customers, will digitize many processes, free up their workforce on driving value-add business, operate their businesses based on real-time information, and will continue to improve job functions with more automation and innovation. Exciting times ahead!

What other trends have you seen across your industries? Please chime in with thoughts.

Where do you start with Digital Transformation?

inspirational-einstein-quotesNowadays, almost every client conversation starts with Digital in some form or the other. The competitive advantages that once gave companies a great leverage —their product lineup, scale, or legacy position—are no longer as secure as they were. Many startups are already disrupting big companies, if not already. Given this digital era with rapid innovation coming from all corners, all businesses must transform, meaning a comprehensive change in strategy, operating model, organization, people, and processes. Transformation is an imperative.

There is so much happening in digital space that every company wants to get onto bandwagon, but are quite not sure where to start.

Let’s align on some definitions first – Companies often confuse “digitization” with “transformation“. Digitization deals with taking existing business/platforms to digital. Transformation is change in existing business model to create new business model.

Digital Transformation is the use of digital technology to radically transform customer experiences, operational process and business models to create value at new frontiers of business world in a strategic way”

Digital Transformation in general is consumer facing, generates top-line growth, enhances brand value for the company. But note that Digital Transformation moves at pace of innovation, market, competition and ever-evolving customers expectations.

Why is this important?

27% of senior executives rate digital transformation as now being “a matter of survival”.

The majority (87%) of companies think that digital transformation is a competitive opportunity.

51% of senior executives believe it critical to implement digital transformation in the next 12 months.

So, what are companies doing to drive digital transformation?

Digital is not about tools, it’s about mind-set, organization culture and education. Companies needs to embrace “digital culture” and obsessively focus on delivering great customer experiences.

Digital Culture means customer-centricity, transparency, research/data driven, co-creation of products/services with customer, collaborate across cross functional units, agile, empowered to take risks, innovation driven, etc.

Transformation will take time but many companies are taking certain steps to put them on right track for exploiting digital down the road. Few noted below –

  1. Appointing Chief Digital Officers, Chief Innovation Officers to understand customers expectations, analyzing data, coming up with creative ways to simplify solutions, etc
  2. Increase in Digital Marketing technology spend in areas of content management/commerce platforms, social media and analytics tracking , creative frameworks and tools, CRM, Personalization, Responsive Web Design (RWD) — all of greatly enhance customer experiences
  3. Investments in disruptive technologies like Internet of Things (IoT), Mobile payments, Artificial Intelligence (AI), wearable devices, home automation, cloud computing, data and analytics, 3D printing, bots, robotics, etc
  4. Moving away from traditional waterfall approaches with year-long release cycles to agile, iterative faster release cycles as short as few weeks
  5. Shift in mind-set from “risk-averse” to “risk-taking” with investments in digital skills
  6. Focus on mobile and cloud (Just so you know, Microsoft, after Satya Nadella, CEO, took over changed their strategy to “mobile first, could first“)
  7. Integrating digital and physical strategy. Read mBank case study here – integration of digital and physical banking at it’s best
  8. Establishing presence on social media platforms to engage with customers – Facebook pages, Twitter account, Instagram, Snapchat, weChat, LinkedIn, YouTube, etc. See how Starbucks excels at social media.

Key challenges for big companies

Digital Transformation is not easy, especially for big established companies. Let’s look at some of the key challenges that many companies are facing now:

  1. Fragmented business process: Every big company has numerous business process operating under old model. No insights to analytics or customer feedback to determine where to improve. Most business process are functionality driven and not customer-centric.
  2. Legacy Technology: Hundreds, if not thousands of systems; most legacy systems driving core business functions, which are hard to decouple and experiment. Couple this with aging infrastructure, information overload and lack of measurement of KPIs to determine effectiveness and efficiency.
  3. Culture: Digital is moving fast but there is still resistance to culture change. “Risk-taking”, “fail-fast”, “innovate”, “collaboration”  – these are not being embraced fast enough
  4. Lack of unified Marketing and fragmented channels. Adhoc strategies to run campaigns, social media strategies, etc – some of which is reactive in nature too.

So, where you do start?

The answer truly depends on where the companies are on digital maturity scale and also on industry. Leaders must first understand where will digital have most profound impact, then define vision and road map. Many companies have begun to successfully transform their products and operations by taking a structured approach to digital. The key thing is not just strategize endlessly, rather taking action now by launching small-scale initiatives and then building up their digital capabilities through experience. Some ideas –

1. Build delightful customer experiences

  1. Build/Redesign website with simple, yet outstanding customer experience: Before we use or purchase any product/service, we normally visit company’s website. Website is the gateway to company’s service offerings – an avenue to immediately attract potential customers with great content, videos, effective landing pages providing contextual, relevant, personalized content. Equally important, is to have a responsive version of site i.e. site that is optimized to work effectively on tablets, mobile devices. Few key questions you need to consider –
    • How well do you know your customers? Segments?
    • Do you understand customer journeys?
    • How to best service an omni-channel consumer? Some inspirations of great UX sites.
    • Do you have a comprehensive content strategy?
  2. Build a Mobile App: Dedicated app to showcase things that are relevant to customer. Don’t just dump everything from the site onto app, rather include top few customer oriented features.  E.g. if I am in a retail store, retail app should provide relevant information like coupons, new product information, complementary products to what i have already purchased before, discounts, promotions, price comparison, trending items, etc. All of this should be based off customer preferences, past history and behavior.
  3. Build 360 view of customer leveraging CRM, analytics, customer service/operations, website data and such
  4. Define Social Media Strategy: Determine what is the most effective social media platform to serve customers and engage with the customers on daily basis.

2. Streamline operational processes and technology

  1. Automate Business processes: Revisiting existing processes and eliminating unnecessary steps, providing self-service capabilities, automated response to most common customer queries (think bots)
  2. Decouple legacy systems with consumer facing application: IT needs to build out a separate system that can provide flexible, scalable, nimble customer-facing capabilities. Also, consider  –
    • how you can apply new technologies to legacy systems
    • how can I update consumer facing technology systems fast?
    • how to best integrate data across social, content, commerce, customer service, media, etc., to deliver integrated and seamless customer experience

3. Re-define organization culture and thinking

  • Drive Agile Thinking: Enhance digital skills by training people in Agile methodologies, Design Thinking, SPRINT, etc.
  • Co-locate teams: Big companies are notorious in creating walls between business units. Ensure that employees from marketing, business, customer service, product development, analytics, research, strategy, digital channels, and IT are working together in small, multidisciplinary, co-located teams – think open, adhoc spaces (some inspirations here). Empower teams to think out of the box, design, develop, and adapt customer processes and propositions to deliver great product that customers want.
  • Establish Digital Center of Excellence (DCoE): A forum for anyone to discuss ideas, challenge assumptions, and take risks
    • Build DCoE at or close to company headquarters to provide strategic advise, guidance and learnings.

Key Takeaways

Digital transformation requires great leadership and executive sponsorship to drive change. Instead of boiling the ocean, companies need to focus and identify which business units of company are ripe for transformation, and transform them first. Getting an early win will make the road map easier.

Great companies are constantly identifying new ways to redefine the way they work in the new digital era. How is your company driving transformation? How has that improved customer experiences and what changes have you seen in your organization? Please let me know with your comments.