I previously explored the first question that paves the way to wiser tradeoffs in digital transformation efforts: what value will your create for which customers? In this post, I explore the second one: what aspects of your business will you digitize? With many areas of your business that could be improved, where should we apply our limited resources to maximize impact? It's a challenge for most. Answering this question is a quest to clarify your choices within, and strike the right balance across, 5 key areas. 1) creating digital products and services, 2) enabling digital channels for selling 3) enabling customer self-service, 4) digitizing customer support and engagement and 5) optimizing back office processes.
Create digital products and services. Here, the objective is to shift the products and services that you are selling to digital forms. From physical books to eBooks, DVDs to NetFlix, in-person teaching to eLearning and so on. These types of transformations can prove daunting especially when you have complex products and services. 1) Is your goal to create completely new and different products / services or is it to transform existing ones to digital equivalents? 2) Is your purpose to completely replace the physical product with a digital one or to simply digitize selected facets? 3) Which aspects will you choose to digitize, which ones will you exclude? 4) Will you blend digital and physical experiences, allowing customers to move between the two or will a given customer only exist in one?
Enable digital channels for selling products and services. Sometimes, digital transformation is simply a migration to digital channels for selling. From selling in-person to selling on eCommerce sites, online market places, partner sites, subscription sites, social platforms and so on. Because of the explosion in the number of channels and the relative simplicity of this type of change, many institutions quickly expand across several channels to reach new customers. Still, it helps to soberly consider decisions here. 1) Which digital channels are both consistent with your brand and relevant to your customers? 2) To what extent will your use your own, partner-owned or third party digital channels? 3) Will you migrate customers completely to these digital channels or will some customers remain in physical ones? 4) Will customers be able to move seamlessly between digital and physical? 5) Will they be able to do so across different digital channels? 6) What are the implications of these choices on customer experience, your brand and operations complexity?
Enabling customer self-service. Across organizations, the vast majority of customer interactions are mundane and routine. I forgot my password, I need to generate a quote, where is my order?, you are almost running out of X, we think it's time for you to buy some more, and so on. Transformation focused on automating outreach to customers and empowering them with self-service could be the correct focus. If well executed, this could empower customers with 24/7 convenience, free internal teams to focus on consequential problems and enable organizations to cost-effectively scale. 1)What value will you create for which customers?, 2) Will you focus more on self-service for inbound requests or automating outreach to customers?, 3) With potentially many options at your disposal, what specific self-service tools and automations will you enable?
Digitize customer support & engagement: High value customers and technology averse ones have the propensity to avoid, by all means, the lovely self-service tools that we build. They instead require high touch service - in person, via phone or over chat. For such customers, a transformation agenda focused on developing self-service tools may be an exercise in futility. Instead, it may be more prudent to empower employees to efficiently court, convert, support and engage customers. 1) Which support, sales or marketing processes do you need to address?, 2) Will these processes need to be overhauled or simply optimized?, 3) Which processes require simple reorganization versus digitization?
Optimize internal and back office processes: Becoming efficient at addressing recurrent customer problems is good. Even better, is addressing the core problems that they are calling about. Are they persistently complaining about shipping problems or challenges accessing products that they have purchased? It may be time to turn your attention to digitizing the frail processes that precipitate recurrent problems. Back office concerns such as data management, order fulfillment, shipping, inventory management, Accounting and risk management usually take a back seat in the digitization agenda. Might this be the place that needs digitization in your organization?
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