The path to digital innovation must be paved with connected customer data. Businesses are experiencing extreme pressure to transform digitally in a way that emphasizes customer-centricity. Being customer-centric is a mindset that’s powered by data that delivers insights on customer behaviors, motivations and preferences.
Most companies face challenges because they lack connected customer data. They still rely on legacy master data management (MDM) platforms that don’t deliver value. Data is disconnected and disjointed, living in silos across the enterprise. So, how can you achieve digital innovation with customer connected data? Let’s look at the drivers and success factors that need to be in place to realize this goal.
The state of digital transformation: what does it look like in 2020?
The State of Digital Transformation report makes it clear that companies see digital transformation as a priority and it has expanded beyond IT. In the study, some key findings were uncovered:
- Market pressures are the leading driver of digital transformation, specifically those around growth and remaining competitive
- Privacy standard compliance is an emerging driver
- Transformation efforts focus mostly on customer experience and a more robust infrastructure
- A culture of innovation is a critical element in digital transformation
This business intelligence will set the stage for how some companies succeed, and others falter in digital transformation and innovation.
Success factors: companies that have achieved success in digital transformation have used technologies that are agile and scalable
Transformations are never easy, with digital ones failing often. In fact, less than 30 percent of organizations succeed in transforming digitally and driving innovation. What does success mean exactly? Digital transformations must improve organizations ability to business decision making and sustainable growth.
You may also think that successful digital transformations are carried out in industries that are already technologically advanced -, but even they struggle. So, what’s the secret of effective transformation? It comes down to several factors, including agility to scale and collaborate across the organization. According to a research study from McKinsey organizations that found success in digital transformation are more likely to use solutions that are cloud-native and based on big data architecture.
The business value of successful digital transformation
While most organizations are already aware of the opportunities and possibilities of digital transformation, they often don’t have alignment on its value. Without concurrence on these values, which then become goals, it’s hard to attain digital transformation.
For example, for organizations that generate $1 billion in revenue, they can add another $700 million by investing in digital transformation that improves customer experience. Furthermore, 56 percent of CEOs acknowledge digital transformation led to higher revenues.
While digital transformation has many elements, highlighting its impact on customer experience is likely to be where your company can see a true return on investment (ROI). When companies use digital transformation to focus on customer experience, they can expect a 20 to 30 percent lift in customer satisfaction with profit gains of up to 50 percent.
So, how do you become a leader in digital transformation?
Key factors in success: what businesses need to know to win at digital transformation
In the same McKinsey survey, respondents were asked about the key factors required to achieve digital transformation. With those tools in place, companies were three times more likely to report their digital transformation was effective.
Those key factors include:
- Digital tools to offer more accessibility of information for all internal stakeholders
- Using digital self-service technology for employees and business partners
- Embracing collaboration between departments on transformation initiatives as a mantra for a company’s culture, supported by senior leadership
- Infusing digital technology in standard operating procedures (SOPs)
Ultimately, those organizations winning at digital transformation have several things in common. They are led by those who embrace technology and empower employees to work in more collaborative ways. Day to day operations run more smoothly because data is connected, meaningful and accessible. All these factors are part of realizing connected experience.
What is connected customer data?
Connected customer data is the ability to have a single, holistic view of customer data across all applications and departments that tells you about the customer, its preferences, behavior, intent, relationships, as well as privacy and consent preferences. To accomplish it, the right technology is necessary. Such a platform must be agile and scalable to changing business needs and provide insight-ready data.
A connected customer data platform should:
- Allow you to aggregate all streams of customer data from multiple sources, both internally and externally including all the transactions and interactions.
- Provide you with the ability to discover relationships between people, organizations, products, places and activities and add it to the profile
- Deliver actionable customer insights that not only helps you to further improve the quality of the profile but also powers hyper-personalization for your downstream analytics
- Help you manage compliance and consent
- Offer access to relevant data for each role or department
Connected customer data platforms must be nimble
Agility is essential in the experience economy, and to accomplish this, you’ll need to rethink your company’s workflows and processes. The digital environment requires that employees embark on new ways to work, which also impacts the company’s culture. The pace in 21st-century business is lightning fast, and employees have to keep up. Your systems must be able to quickly adapt to changing needs in business models, regulations, or for introducing new revenue models.
Instead of this turning into a challenge or roadblock, your team can keep moving with the right digital tools. Your operational model must be nimble in these times, with continuous improvement and upgrading of processes. Consider how much data you generate or collect based on customer interactions in a single day. Connecting it all on a big data architecture platform in real-time allows you to be on top of your game without any delays.
Connected customer data also ensures compliance
How do you currently manage privacy regulations and customer consent? Does your process meet the mandates without tedious efforts? Probably not. Privacy laws such as GDPR and CCPA are complicated and require consistency across the organization. If they are being managed at multiple levels, you could be at risk right now. Connected customer data enables you to oversee compliance with ease on one platform, protecting your reputation and customer loyalty.
Accelerate digital innovation with connected customer data
Digital innovation and connected customer data are interconnected and dependent. To achieve the goals of transforming to a digital innovation philosophy, connected customer data is essential to these efforts. By leveraging a connected customer data platform, you’ll be able to move swiftly and strategically in your quest for transformation.