Check out our Predictions 2017: In Digital Transformation, The Hard Work Of Operational Excellence Begins piece that went live this morning. It has more predictions and more detail from from my coauthors Nigel Fenwick and Martin Gill.
You've been creating digital customer experiences for years now. You've built a successful app. You’ve assembled a martech/adtech stack. You may even have started swinging at omnichannel delivery or harnessed AI or piloted a connected product. So it’s time to declare victory on digital transformation, right? [In our 2016 services survey, a shockingly high 19% have . . .]
Not so fast. Digital customer experiences are only the shining faces of a digital business. Those pretty faces quickly lose their luster unless you’ve also transformed your business operations to make them better every single day — and introduce new digital faces all the time. We call this capability "digital operational excellence." It’s the 80 in the 80/20 rule of digital transformation. Here are three predictions for 2017 to prod the digital business conversation:
  1. Digital transformation will tip from experiences to operations. Bolting digital front ends onto existing products and services is a good start to digital transformation. But it’s not enough. Frank Blake, CEO of The Home Depot, shared a plan to spend $300 million on digital technology so customers could order on their phones and pick up in the store.  Six months later, he raised that to $1.5 billion to cover the cost of new distribution centers and an overhauled fulfillment process so customers can order from the catalog, not just from store inventory. Your action: Double down on (or start) your investment in operational excellence. 
  2. Transformation budgets will edge up into the billions. The Home Depot is not the only firm investing billions in operational transformation. Wal-Mart will spend $2 billion to overhaul their core capabilities for digital engagement.  General Electric is spending $1 billion a year in its quest to be a digital business.  Unilever purchased Dollar Shave Club for $1 billion to establish a direct-to-consumer product line. These are technology investments, sure, but also investments in products, processes, and people. Your action: Re-assess your budget – it probably isn’t big enough. As The Home Depot learned, you may find you need to spend $4 on digital operational excellence for every $1 you spend on digital customer experiences.
  3. You will finally build holistic customer experiences that transcend touchpoints. Customers don’t deserve to be dropped between touchpoints. In 2017, digital business professionals will accelerate work to break down the silos between web, mobile app, and offline engagement. Omnichannel retail experiences like digital stores or click-and-collect will become increasingly mainstream customer experiences as will App+ strategies that transform smartphones into control panels for cars and homes and wearables that feed health data to insurance firms. Your action: If you haven’t embraced customer journey mapping, now is the time.