We have never been so demanding to control our lives from the palm of our hand. Want to live up to the expectations of your customers? Make sure you focus on the right IT capabilities.
A digital transformation goes hand in hand with serious investments in IT. Yes, I mean people, process -and- technology. In the previous two blogs I touched upon the people and process aspects. In this blog I will focus more on the technology part.
Whether we order food, a taxi or basically anything else. We want it now. Digital disrupters are leading a movement that has radically changed customer behaviour in the past decade. In online retail for example, free same day delivery (even in the weekends) is becoming the new differentiator. Businesses need to be always on and customers expect them to be always relevant too.
Customers want to interact with you through the channel of their choice
To live up to the expectations a lot of companies are transforming to become 'customer centric'. Let's define customer centric for now as: being relevant on every touchpoint and in every phase of the lifecycle of a customer. Yay, who doesn't want that! But what does that mean for your IT? What key IT capabilities do you need for that? There are three foundational ones every company should adopt: APIs, streaming data and cloud.
Back in the days life was easy. If people wanted to buy something they had to physically come to your store. When the phone became mainstream this introduced another way of interacting with customers. Nowadays we have a plethora of additional channels, eg. websites, apps, messaging, social, to name a few. Customers want to interact with you through the channel of their choice. They might even use multiple channels while interacting with you. For this reason, most companies nowadays have an omnichannel strategy.
Being relevant in all those channels implies you need to provide, to some extent, the same kind of services in multiple channels. APIs enable you to do just that! You might have heard about service oriented architecture (SOA) in the past. Well, this is todays lightweight version of it. APIfying your business into reusable services (or webservices, or microservices as your tech crowd might call them) has proven to be crucial for delivering a consistent frictionless customer experience across channels.
Data should not be siloed but should be able to 'flow through your organization'
APIs are all about being able to share data across IT systems and across departmental and organizational boundaries. With chatbots and voice assistants being added, the number of channels keep on increasing. Therefore, having APIs at the core of your IT capabilities is a must have. If you didn't fully embark on this journey yet, then start doing it today.
It's not sufficient to APIfy your business and create omnichannel presence. Relevance is about being meaningful in the interaction with your customer. This requires you to have the right data, at the right time and to be able to act on it at that same moment. A good example where realtime data is crucial is the Uber app. It helps you to connect with a driver in realtime and while waiting it shows you the location of the driver. Another example is a smart home where you expect an instant notification if someone triggers your motion sensor while the house is armed. In both cases realtime data plays a key role in providing you a frictionless service. If it doesn't work you will notice.
However, there is another category of realtime data that is less obvious, that you probably won't notice. It is the data that is used to track your behaviour. For example, think about using an online travel agency. While browsing the website this might generate a lot of click tracking data that could be used to predict your preferences. Based on which hotels you click it could build a personal profile which states that you are the type of person that likes luxurious hotels. Based on this profile hotels in the top segment could then be ranked higher in the search results presented to you. Actually booking these hotels then adds more value to your profile and could be used to improve the prediction model.
Cloud technology enables you to move at speed, at scale and at proportional cost
Being able to deal with realtime data requires you to have an IT capability in place that is able to process streaming event data. The real benefit comes when you start streaming relevant customer events so anyone within your organisation could potentially act upon it. For example, a 'new customer event' might be a trigger for your marketing department to send you a welcoming email. As a result, your data will no longer be siloed but it will 'flow through your organization'. This opens up a lot of possibilities, but it also comes with a disclaimer. Beware that there are limits on what you can do as per your countries privacy regulations.
Cloud technology is about world class business and technology capabilities provided to you as a service on a pay as you go basis. It applies to the full spectrum of virtualized hardware offerings, platform components (like databases), up to full business suites (like Microsoft Office 365). Cloud technology basically enables you to move at speed, at scale and at proportional cost.
The big three cloud providers, eg. Amazon, Microsoft and Google all have their own cloud ecosystems, but there are dozens of smaller players also. The speed at which they innovate is really amazing. Most of them are embracing open source versions of popular parts of the technology stack, such as a Postgres database. Of course, you can run Postgres on their virtualized infrastructure, but you can also choose to use it as a 'managed service'. Think of it. Do you really want to invest yourself in creating and maintaining a highly available, durable, high performing, geo redundant database? Or do you think these providers are better in doing that for you? More and more advanced capabilities will become available 'as a service'. Amazon for example recently introduced Sagemaker which provides you with data science capabilities as a service.
I strongly believe that the most important reason for embracing cloud is the increased speed of innovation. Unless you are a big player, you probably don't have the time, the money and the people to build up advanced capabilities of your own. Empowering your company with a clear cloud strategy should be on top of your mind.
Wrapping it all up. If you want to lay the foundation for a future fit IT then focus on three key capabilities: APIs, streaming data and cloud. By doing so you will have the right basis for building tomorrows use cases leveraging AI, IoT and robotization. But more importantly it will enable you to deliver the kind of customer centric features that you need today.
This is the third in a series of blogs about different aspects of digital transformation. This blog reflects my personal view. What I write doesn’t necessarily reflect directions or views of the companies I work or have worked for.