How To Unlock Tech Industry Digital Transformation

Nigel Fenwick
Vice President, Principal Analyst
September 26, 2016

It's no surprise that tech companies are vested in the digital transformation of their customers. But many tech companies find it difficult to leave their product-centric models behind and focus on customer outcomes. That's just one of the findings from the research published on digital transformation in the tech sector.

True customer obsession demands an outside-in perspective. Tech companies must learn to see their business from the perspective of their customers; beginning with customer desires and working back to the new digital capabilities that can enable the outcomes that satisfy those desires.

But a common problem for tech companies is their business structure. Built around successful products, the P&L structure in most tech companies reflects internal strength — business capabilities if you like — the structure optimizes the ability to bring specific products and product features to market. But from the outside looking in, the product structure can seem at odds with what the customer wants. I can't count how many times the same company has treated me like a new customer, even though I already own one of the products made by the brand — my guess is you've had a similar experience.

Of course this isn't a problem unique to the tech industry. But the tech industry sits at the heart of the digital transformation of many businesses — helping their customers take advantage of their technology to transform their businesses. So you might be forgiven for expecting the tech industry to have figured out it's own transformation already. Not so much.

Every so often I'll sit with a group of technology marketing and product executives to review their go-to-market pitch. And on nearly every occasion, I'm left wondering what's the customer outcome they are trying to help their customers achieve? 

Why do so many really bright, intelligent, well-educated, highly experienced executives miss this so frequently? Perhaps it's because of the nature of the work, the business, the day-to-day focus — we naturally become product-centric and forget to start with the customer.

Tech execs, like everyone else, need to always start with the customer. And then answer these questions:

  • What is the outcome that our customer desires? (Remember companies are not customers, people are).
  • Is there more than one customer we need to satisfy?
  • Are there other equally valuable outcomes?
  • How does the customer achieve that outcome today?
  • How can we (profitably) design a new experience for the customer that will help them acheive the outcome they desire?

And work back from there.

When you do this, you may end up with the same product experience as you have today, but you'll more than likely be in a much better position to articulate the value you bring to your customer. And if you're lucky, you'll completely reimagine your business.

And then you can get into all the messy stuff of restructuring the business around customer segments based on outcomes. (Hey, I never said transformation was going to be easy!)

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