What could you do with $400 million?
For one major automaker, the answer was…not a whole lot. After deciding to invest in a large integration of their different procurement systems to simplify work for their suppliers, they rolled out the solution to their end-users, who quickly abandoned the system after having to go through five different screens to complete a simple task, which affected their ability to fill orders for customers and focus on their customers’ needs. This backlash eventually led the company to abandon the project after the price tag ballooned to $400 million, nearly double the estimate.
Too often, companies don’t take stock of the full set of drivers for their digital transformation strategy and see one or more of these drivers become their downfall. Instead of solely focusing on the end goal of customer experience, the functionality of new technology becomes a distraction and leads these companies toward the 60 percent of software development processes that product ineffective products.They also view their operations-side digital transformation practices as completely separate from the customer experience side. The problem is that the operations side is missing out on the crucial customer insights that are, for example, going back to product development. Use data to shore up the time for new product innovation and leverage a more agile operations practice to finely tune your products to customer needs.
An interesting case study of this is the impact of modularization on the manufacturing industry. Eighty-five percent of BMWs are custom orders. It feels like true customization for customers, but in reality, it’s modularization where they are choosing modules to fit together, rather than say, having seat height match your exact preference down to the centimeter. The effects of this stretch back into the production line, which has to change in order to deliver mass modularization and a series of similar, yet not identical, products instead of identical product after identical product. Single Minute Exchange of Die, or shortening the amount of time it takes to change over production from one product to another, is no longer as relevant; it’s all about being able to customize from a mass production line.
In order to accomplish massive transformation like the above example, the most crucial part is to take stock of each input to your digital transformation strategy. ChaiOne has extensive experience in helping companies create customer experience and digital transformation strategy, and we have been honing this framework for the last 8 years. We see many companies try to skip over one of these inputs, only to see lackluster results down the line.
- First, look at the processes that are occurring and uncover where the productivity and efficiency breakdowns occur, for both employees and customers.
- After identifying the business KPIs that need to improve, the next step is to drill deeper into these issues by performing contextual inquiries, user interviews and other user research with your employees, and then your customers.
- Once you have both the business KPIs merged with the user needs, the next level is to identify the insights that you have to drive your technology selection and portfolio strategy. Distill user problems and business needs to their root causes to determine the solution, and then calculate the potential costs of that solution. Once this is determined, prioritize this project or projects against the portfolio of user needs.
- The next and final input into your strategy to examine how your insights, user needs and business KPIs fit into your business model and whether that business model itself needs to evolve. What are the threats coming from disruption? How does this business model compare to a lean startup?
One of the biggest issues that we see with our clients is that they do not realize that their digital and mobile products are never finished, along with their strategy. It’s important to keep iterating on your customer experience because customer preferences are constantly changing. Use your Net Promoter Score as a benchmark for each customer experience and constantly test how your the products that are a part of the customer experience affect the Net Promoter Score.
How are you thinking about your customer experience? Where are you on your Digital Transformation journey?