What is digital transformation?

Digital transformation means different things to different people, depending on their role and organization. As a result, there isn't a unified view of what digital transformation is and what it takes to get it right the first time. To understand this term, let’s take a deeper look at digital transformation in the context of an overall transformation journey.   

Digital transformation vs. business transformation 

Think of digital transformation as one component of a broader business transformation. Together, they focus on enabling business outcomes and delivering customer value through strategic digital innovation.

Business transformation defines the overarching transformation journey, where business outcomes, customer experience (CX) strategy, and capability needs are identified and designed without the considerations of technology to maximize business performance in a future state. Business transformations can be achieved through digital and non-digital methods. This article specifically focuses on the business transformations that require digital investment to reach the desired future state. Moving a bank or jeweler’s customer journey online to support emerging customer preferences is a common example. However, other business transformations might focus on different investment strategies, such as evolving operating models to cut costs or pivoting to a new product offering to increase market share.  

Digital transformation represents a key stage within this journey, where IT defines the technology and solution roadmap to enable the future business state. This includes identification of vendors for implementation, operational needs, and a roadmap for execution. These critical steps ensure that IT will execute the business's future state in the most agile, scalable, and sustainable way possible. In many organizations, digital investments have historically been guided by tactical IT goals. However, aligning business transformation goals with digital transformation efforts can help maximize your outcomes.

The difference between digital transformation and digitization

Most organizations began their digital transformation journey years ago when digitization of critical processes became a major strategic initiative for many of the world’s leading organizations. Digitizing processes and resources is a high-ROI element of the digital transformation journey, but it would be inaccurate to describe this one step as digital transformation holistically.

Digitization, while offering some conveniences to the consumer, does not allow for an end-to-end customer experience to happen online with appropriate CX journey considerations. Today, this sort of end-to-end digital experience has become an expectation for most customers, and many organizations continue to focus on digitization without a unified enterprise CX strategy. While these organizations have realized value from digitization efforts, many now are experiencing the value gap between a true digital transformation journey and simply digitizing processes.

The importance of digital transformation in the era of the connected customer

You may have heard us say that your biggest competitor is your customer’s last best experience. With each new seamless digital experience, your customers’ expectations for interacting with your business grow. Organizations thriving in the post-pandemic era share the same passion for meeting or exceeding customer demands through innovative customer experiences. While digitization delivers strong value for customers, it does not account for a unified CX strategy. The risk involved in digitization without digital transformation means digitization happens in silos. Many organizations execute digitization initiatives in a segmented fashion, often resulting in disconnected digital experiences and increased integration costs.

How does digital transformation benefit the consumer?

While digital transformation has become increasingly important to most organizations’ strategic success, the COVID-19 pandemic created new urgency in the market. As we transition to a post-pandemic world, we’re seeing more organizations than ever take the digital leap. Successful digital transformations tend to have a strong strategy to inform the process. Meanwhile, organizations attempting to pivot quickly without doing their strategic due diligence will end up picking up the pieces of a disjointed transformation later.

Consumers have already shifted their expectations, making digital transformation more than just a “nice to have.” Businesses that maintain a largely offline presence are increasingly rare. Consumers find it frustrating to navigate experiences with them, leading to significant customer churn in the marketplace, as these customers leave to find competitors who have already shifted to digital.

Digital transformation creates more opportunities for customers to interact with brands how they prefer. Recent trends suggest that customers now prefer self service, especially in the early stages of their journey. If the right information is readily available and presented with the appropriate digital experience, a more informed customer will interact with agents less frequently — resulting in faster agent support and fewer barriers to progress throughout the customer journey.

Voice of the Customer — Understanding your customer’s journey

Not long ago, most customer experiences started on the phone. Now, they’re also happening by text, in online chats, via email, and on social media — with AI-based solutions unifying interactions across channels. These industry-leading customer experiences are expected, but you can’t create one without first understanding your customer.

While you might feel that you have a sense of when, where, and how your customer wants to interact with your brand, sometimes it’s best to hear it straight from them through a Voice of the Customer (VoC) program. As the preferences and expectations of your target audiences change, best practices in the customer experience industry change with them. To be successful in today’s market, understanding your customers and what drives attrition as well as retention are critical to business optimization and CX strategy. Voice of the Customer programs are critical to understanding the customer journey and crafting an effective CX strategy enabled by digital transformation.

Overcoming digital transformation pitfalls through CX best practices

CX is often lauded for its significant benefits in driving business optimization and customer value as well as its role as a focal point for contact center transformation. However, two consistent themes across industries emerge:  the slow time-to-value realization and lack of implementation success. In both cases, a lack of CX strategy at the onset is usually the culprit.

In this section, we'll explore some of these digital transformation pitfalls and the best practices at the core of CX strategy value realization. Due to contact centers being the most common entry point to digital transformation initiatives, particularly regarding the need for omnichannel capability and unifying customer data across channels, we’ll start with this scenario in mind.

Common pitfalls of digital transformation

Digital transformation initiatives that are detached from business outcomes traditionally lack business impact, competitive advantage, and strong adoption internally. Organizations see decreased productivity and a disconnect between capabilities and digital experiences for employees and customers.

Another common issue is the purchase of multiple platforms with redundant capabilities over time. At TTEC Digital, we typically see organizations carrying tremendous amounts of technology debt for this reason, and this redundant and expensive approach to digital transformation and CX strategy enablement results in multi-channel environments rather than seamless omnichannel digital experiences.

Even when the business is engaged from the start, segmenting an implementation by business unit or location, without due diligence and discovery of all other segments within the strategic scope, can lead to less-than-optimal results. This approach means disconnected digital experiences and significantly more effort to refactor implementations to eliminate these issues.

Overall, we recommend taking an approach focused on empowering and enabling the organization to understand the pitfalls and how to avoid them, along with best practices in execution.
 

Best practice 1: Aligning the implementation to business outcomes

The most critical element to implementing CX strategy is to consider what the implementation will do to enable the business to achieve its desired outcomes. If every single technology implementation is mapped to business outcomes, common issues such as funding and misalignment in implementation objectives quickly disappear. At TTEC Digital, we typically see technology implementations mapped to at least some of the following business outcomes:

• Enable marketing strategies such as cross/up-sell
• Increase customer retention and loyalty
• Maximize product diversification per customer
• Limit cost to operate

Pre-implementation, organizations and their transformation partners should focus on identifying business outcomes and merging them with what is possible through today’s modern tools and capabilities. At TTEC Digital, we also take the time to provide clients with a walk-through of industry-agnostic and specific ways value can be generated through a contact center transformational engagement such as:

• Consolidation and sunsetting of overlapping or end-of-life capabilities, resulting in licensing/maintenance/infrastructure savings
• Automation of redundant, non-value-added tasks
• Leveraging Bots and more advanced platform capabilities to enable value-generation

Best practice 2: Enabling a modern digital organization with an omnichannel strategy

Building an omnichannel strategy is the first step to enabling the above business outcomes, and it should be prioritized accordingly. When selecting a Contact Center as a Service (CCaaS) platform for any contact center transformation initiative (such as moving from an end-of-life contact center solution to the cloud), organizations should closely evaluate their capabilities and CX maturity against market options to ensure all their capability gaps are covered and desired outcomes are achievable.

Forward-looking customer engagement data needs to be combined with basic customer data to provide a comprehensive view of what a customer is doing and how they are doing it with your organization. This allows for the optimization of systematic and human customer interaction for marketing, data-triggered interactions, proactive outreach, data-assisted customer/agent interaction, and any other enhancements needed to achieve outcomes.

Another popular usage of this data is to drive a call deflection strategy, where organizations enable significant self-service options for customers and design solutions to proactively address potential issues to limit contact center interaction.

This means a key aspect of your pre-implementation task list should be to ensure your organization can support the real-time data and systematic capabilities needed to take advantage of the suite of benefits the omnichannel strategy has to offer.

Best practice 3: Building on your digital transformation through continuous improvement

Post-initial deployment, your organization will need to look at the customer interaction data to assess your performance. While every industry is different, there are common basic elements of continuous improvement centered around agent efficiency and call deflection strategy, such as:

• Analyzing disposition data to design self-service capabilities, proactive alerts, and outreach to streamline customer call topics and reduce volume.
• Optimizing digital adoption strategy and communication to customers, as well as setting clear KPIs around adoption velocity.
• Breaking down agent actions throughout a call to identify opportunities for efficiency.
• Developing learnings and training for agents based on agent analytics, such as time outside the queue, escalations, and changes to processes.
• Optimizing marketing offers, retention, and customer conversion.

Building on the initial deployment is critical to increase implementation ROI, drive your CX maturity, and maximize the value of your investment.

Next steps

TTEC Digital's team of CX design and orchestration experts is ready to help you achieve a seamless digital transformation that drives long-term efficiency and elevated performance.

A digital transformation ultimately requires a trusted partner with experience architecting the journey, and few companies can offer the suite of services and the level of expertise offered by our team here at TTEC Digital. Before you move to transform your organization, get in touch with our team of experts so we can provide some insights into the journey.