Creating Meaningful ROI from Digital Transformation
We recently sponsored some IDC research that hit me as sobering. The Infobrief, entitled Digital Transformation: Insight into Getting it Right! included learnings from nearly 800 enterprise executives across 15 countries. Its end goal was to help uncover ways brands could improve digital transformation, specifically through the modernization of business communications infrastructure—which we believe is at the heart of any true Digital Transformation. Two things immediately stood out for me: That more than two-thirds of companies rate Digital Transformation efforts as less than extremely successful in achieving their goals, and that only 19 percent believed it had resulted in true innovation.
But looking more closely at the research, it’s clear that businesses need to shift their approach, to make Digital Transformation more than just a buzzword.
First, businesses need to understand that Digital Transformation (DX) is a journey and most enterprises have only just started on the path. True transformation occurs when digital technologies create new business models or change markets, and that kind of impact takes time. In the world of Digital Transformation, it might be more prudent to talk about the process as an evolution versus a revolution. The survey data backs this up and suggests a perceived lack of ROI is largely driven by the fact that companies are still in the early stages of the process.
The broader view of Digital Transformation—one that recognizes it’s a long journey that touches many business technologies and systems—should also apply to transformation drivers
Second, evidence suggests that some businesses’ DX efforts are rather piece-meal, largely focused on implementations or refreshes of individual technologies. This approach of small enhancements and tinkering can lead to mixed results if these improvements aren’t designed, pitched and viewed as part of a broader strategic plan. Businesses starting out on the Digital Transformation journey should have a vision of where they want to be at the end. In this way, individual technology deployments become critical steps in a larger plan to achieve business goals and objectives.
Communicating this vision across the business is also critical to success. Throughout the research, IDC noted that there was a significant difference in how IT leaders and line-of-business (LOB) leaders perceived their efforts. When asked if they thought their Digital Transformation initiatives were extremely successful, more than a third of IT professionals agreed, while LOB managers were less convinced, with only 25 percent agreeing with the statement.
This broader view of Digital Transformation—one that recognizes it’s a long journey that touches many business technologies and systems—should also apply to transformation drivers. Avaya’s IDC study found that 62 percent of companies prioritized employee efficiency or cost control over customer experience as a driver of Digital Transformation. While productivity and cost control is important, the research clearly shows companies that prioritized customer experience achieved significantly more revenue growth. In fact, of those who prioritized customer service, more than a third saw 50 percent growth versus only four percent of those who prioritized reducing IT operational costs. Clearly, it’s imperative that businesses leveraging Digital Transformation look to impact both customer and employee experiences—not just one or the other.
One crucial mistake companies can make on this journey is to ignore the importance of unified communications, something that can have a significant impact on both customer experience and employee productivity. As such, it’s an integral piece of the puzzle for companies seeking to leverage digital technologies to innovate and grow. Embedding unified communications into business processes helps create value through employee productivity and collaboration, as well as deliver better visibility into the business and improve customer service experiences.
Despite the value that unified communications deliver, businesses often stall around adoption. The study indicated that barriers to adoption include cost, inadequate end-user skills, and even the use of pre-existing consumer alternatives. This is why I feel it is so critical that companies invest in training when embarking on Digital Transformation initiatives. Without a training plan, businesses risk missing out on the many benefits of unified communications, including reduced IT costs and great agility across business functions.
Unified communications also play a key role in improving customer experience. As companies adopt Digital Transformation, we see new efficiencies delivered through increased automation. But there’s a fine balance between the efficiency of an automated system and the needs of consumers. IDC’s research found that consumers generally prefer to talk to a person when dealing with complex issues. Yet, a quarter of the consumers surveyed still feel it takes too long to get to the right person when they need to. When trying to create compelling customer experiences, key factors include the speed of issue resolution, as well as access to a “real” person. Businesses that can get past skill deficits and resistant business cultures will be able to better leverage unified communications to blend both human and digital interactions in a way that delivers on both employee efficiency and customer experience.
Avaya and IDC’s InfoBrief makes it clear that for businesses on the journey to Digital Transformation, there are no shortcuts. An approach that focuses on small enhancements and tinkering will only get in the way of true modernization. A more successful approach requires a broader view that includes customer experience as well as workforce optimization, and is guided by a clear strategic vision that can keep all stakeholders on the path. In that sense, understanding where you want Digital Transformation to take you is the first step, and surely the most important.