DIGITAL TRANSFORMATION

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Digital transformation means different things to different people – for me as well, the meaning of Digital Transformation has evolved in the past few years.

In the early years, Digital Transformation was a buzzword used to describe any business-IT project, a website or a mobile application. In the last few years the terms used in the digital space are becoming even more confusing with people using digital strategy, digital business and digital marketing interchangeably. These categories, while similar, are different; and to understand the differences and similarities we need to understand a few key trends in the market today:

  • Today we are seeing lines between business consulting and agency work blurring, we are also seeing that technology plays an integral role in shaping business strategy and decisions. There is a gap in skills in the industry where overlapping skills are needed i.e. we need tech-savvy marketers and strategic technologists.
  • Consulting firms have spent years working with chief executive officers and chief information officers on tasks ranging from developing high-end business strategies to implementing new technology. Now, they are increasingly targeting the chief marketing officer as the marketing segment of the C-suite is becoming more responsible for the overall customer experience.

Given this backdrop, it is clear that Digital Marketing and Digital Business are two sides of the Digital Transformation coin, where one is incomplete without the other. To elaborate a little further:

Relationship Marketing is a term often used in Digital Marketing to mean ‘being able to understand customer segments’. Typical tools used to identify customer segments are journey maps, job shadowing, ‘day in the life’, market research etc. These tools are used in Digital Business as well to understand the customer, create personas etc. but the context is different; the context is influenced by complex interdependencies between people, process, policies and technologies to build a common vision and vocabulary of the customer within an organization, they are used to uncover customer interactions and pain points across all channels and are key to solving the ‘right’ problem. It is worth noting that by overlaying the customer journey maps with specific business goals such as improving productivity and efficiency or increasing customer engagement and loyalty, we can not only identify  ‘new’ problems but also define ‘new’ solutions to old problems. More details are available at Niti Vaish’s blog and at Kerry Bodine’s blog.

Understanding the customer and business priorities through the lens of customer experience require a ‘new breed’ of innovators who understand the ‘convergence’ of customer experience, business / digital strategy and technology

Metrics – most marketers think of SEO and SEM when discussing metrics, while these metrics are important, they don’t paint a holistic picture if they don’t tie back to business goals. With every mobile, social and web initiative it is critical to identify the ‘the behaviors that need to change’, metrics that map to these behaviors and the process and tools available to measure and track these metrics. It is a top priority to take a measured, cohesive approach to paid social’s place in the overall business and marketing strategy – and budget.

And most important of all, Culture and Skillset – organizations require leaders with business-technology skills, innovative mindset and new organization models that understand the need for convergence of business, technology and marketing. These high-performing, experienced individual with a knack for identifying business and technology process improvement opportunities and simplifying interfaces, make the difference between project success and failure because of their judgement and ability to understand data patterns.

In this brave new world ‘Every Brand is a Media Company and Every Brand is a Technology Company’ – its time to think big and be transformative.

Deep-Dive into Multi-Channel Customer Intelligence

Background

As mobile and social are quickly becoming new channels for customer acquisition, engagement and service, many brands across the board are looking to social and digital channels as a way to increase their customer knowledge and understanding through multiple customer touch-points.

As the use of social channels increases exponentially, it is critical that brands are able to create a 360-degree customer view by aggregating data from each one of these interactive channels. Without drawing from all touch-points, brands fail to have a holistically understanding of their consumer and run the risk of presenting disjointed messaging to their consumer as they visit the brand from a diverse number of channels.

Despite the availability of brand monitoring tools (e.g. Radian 6, Alterian and Scout Labs) and brand analytics tools (e.g. Crimson Hexagon, Crowd Factory, SAS and Oracle), brands face the challenge of trying to close the gap between aggregating data from diverse channels and drawing actionable business insights. In order to turn observation into business advantage, feedback mechanisms need to be created to channel insights towards product improvement, business process improvement and trend recognition.

The Challenge

Harnessing the power of big data to drive business and organizational decisions is not without challenges.

Real-time analytics: Recent statistics demonstrate how high the volume of Twitter data really is – Twitter is seeing around 155,000,000 tweets per day, at about 2500 bytes on average for each tweet and about 35 Mb per second – handling the immense amount of data at a sustained rate is a challenge. Also, gathering real-time analytics is made more difficult because of signal-to-noise ratio. Twitter is especially hard given the high rates at which tweets are created and the minuscule number of those tweets that are relevant to a campaign.

Sentiment Analysis: Sentiment Analysis is about the meaning of the content. Knowing the sentiment (positive, negative or neutral) is a good start, but not enough. The data needs to be analyzed to derive improvement opportunities such as ideas for product innovation and business process improvement. The process of mining data is additionally difficult since the human interaction component cannot be completely eliminated.

Solutions

Many companies are trying to get hip on how to tackle the problem of harnessing excessive amounts of data spread across multiple customer touch points. As companies mature their social programs, they can progress through a variety of stages. Companies who are in the earlier stages of social maturity such as Gatorade are focusing their efforts on listening. Gatorade has created a “mission control center” which is staffed by employees who monitor Twitter and Facebook, 24 hours a day.

Other companies such as SAP have long been monitoring and interacting with their employees and customers via social community sites. SAP’s Senior Vice President Mark Yolton has spoken extensively about his 8+ years of experience using the Social Monitoring tool Jive, which has helped SAP form several social communities both internal and external to the company. The SAP Community Network is used to drive social innovation, commerce, intelligence and social insight. Mark champions that biggest benefit SAP has gained by creating these communities is around ‘Customer Intimacy’ – aggregating and analyzing customer data that allows them to create a 360-degree view of their customers wants, needs and actions which helps SAP understand and interact with more effectively.

At the more experienced end, are companies like Dell who use media channel to engage with consumers and drive sales. Dell has more than 9000 employees trained in social media, a ‘Chief Listening Officer’ and a twitter handle @DellCares which resolves 98% of Twitter reported support requests. Dell’s BI solution is available on a smartphone or tablet, provides up-to-the-minutes sales data and customer intelligence and suggests next actions for front-line service personnel.

Benefits

The analysts at Forrester have coined a term ‘Social Intelligence’ which is defined as the process and use cases for harnessing social media data to inform your business strategy. It involves monitoring social media, collecting and analyzing the content, and using the insights to inform your strategy.

The true benefit of aggregating structured data (weblogs, social CRM, application data) and unstructured data (social applications such as Facebook, Twitter, LinkedIn, customer comments and product reviews) is being able to derive actionable insights. Additionally brands need toprovide a feedback mechanism to channel these insights for product improvement, business process improvement and trend analysis.

Aggregating and analyzing data across channels provides the following additional benefits:

Identify New ‘Niche’ Customer Segments – Just because people share some similar characteristics such as age and gender (e.g. female in the age group 35 – 45) does not imply that they share the same passions and interests. Building a community of loyal followers, deeply engaging with them and actively listening and participating will help to identify new niche customer segments.

Deliver Targeted, Personalized Content and Advertising – The future of competitive advantage lies in managing and analyzing all the critical data entering a business environment. Data which provides user preference and location information such as product reviews, check-ins, ratings etc. collected across the mobile, social and digital channels provides a wealth of information for improving customer understanding and targeting them with personalized content.

Increase Customer Loyalty – Customer loyalty and satisfaction can be improved by creating a 360 degree view of the customer and gaining deeper insights into existing customer segments as well as discovering new customer segments by developing a multi-channel strategy and aggregating data across mobile, social and digital channels.

Conclusions

Drawing business insights such as determining ‘top performing regions’ or ‘top influences’ can be accomplished relatively easily by aggregating and analyzing structured and unstructured data, however, the hard part is in drawing subjective business insights such as determining ‘product improvement ideas’ or ‘future trends’.

The key to successful subjective analysis is in empowering and training the personnel at various customer touch points to ask probing questions of customers and flag answers which require deeper analysis. Flagging specific ‘key data points’ will allow actionable nuggets of information to be highlighted and stand apart from the sea of information.

Additionally, forming a deep relationship between people interfacing with customers at multiple touch-points such as social media channels, customer service channels, websites etc. and subject matter experts, such as product managers and designers who are within an organization, will allow for business insights and relevant data to be captured in ‘real-time’ rather than ‘after the fact’, which will lead to better understanding of customer behavior and opinions.

Multi-Channel Customer Intelligence

Background

As mobile and social are quickly becoming new channels for customer acquisition, customer engagement, delivering customer service and generating additional revenue streams, many brands in retail, hospitality, health care, media and financial services are using mobile, social and digital channels as multiple customer touch-points.

With the exponential growth of these channels, it is critical that brands are able to create a 360 degree customer view by aggregating data from these interactive channels. Without holistically understanding the consumer, brands run the risk of not being able to personalize the messaging for the consumer as they visit the brand from a diverse number of channels.  Despite the availability of brand monitoring tools (e.g. Radian 6, Alterian and Scout Labs) and brand analytics tools (e.g. Crimson Hexagon, Crowd Factory, SAS and Oracle), brands face the challenge of closing the gap between aggregating data from diverse channels and drawing actionable business insights. Additionally a feedback mechanism needs to be created to channel these insights towards product improvement, business process improvement or trend recognition.

The Challenge

Harnessing the power of data and analytics to drive business decisions and organizational decisions is not without challenges.

Real-time analytics: Real-time analytics is hard because of signal-to-noise ratio. Twitter is especially hard given the high rates at which tweets are created and the minuscule number of those tweets that are relevant to a campaign.

Sentiment Analysis: Sentiment Analysis is about the meaning of the content. Knowing the sentiment (positive, negative or neutral) is good but not enough. The data needs to be analyzed to derive improvement opportunities e.g. product innovation ideas, business process improvement etc. Additionally the human interaction component cannot be completely eliminated. 

Benefits

The true benefit of aggregating structured data from weblogs, social CRM, application data and unstructured data from social applications such as Facebook, Twitter, LinkedIn, customer comments and product reviews is being able to derive actionable insights. Additionally brands need to provide a feedback mechanism to channel these insights for product improvement, business process improvement and trend analysis.

Aggregating and analyzing data across channels provides the following additional benefits:

Identify New ‘Niche’ Customer Segments – People who share the same characteristics (e.g. female in the age group 35 – 45) does not imply that they share they share the same passions and interests. Building a community of loyal followers, deeply engaging with them and actively listening and participating will help to identify new niche customer segments.

Deliver Targeted, Personalized Content and Advertising – The future of competitive advantage lies in managing and analyzing all the critical data entering a business environment. Data which provides user preference and location information such as product reviews, check-ins, ratings etc. collected across the mobile, social and digital channels provides a wealth of information in improving our understanding of our customers and targeting them with personalized content.
 
Increase Customer Loyalty – Customer loyalty and satisfaction can be improved by creating a 360 degree view of the customer and gaining deeper insights into existing customer segments as well as discovering new customer segments by developing a multi-channel strategy and aggregating data across mobile, social and digital channels.  
 
Solution
 
Drawing business insights such as determining ‘top performing regions’ or ‘top influences’ can relatively easily be accomplished by aggregating and analyzing structured and unstructured data, however,  the hard part is in drawing subjective business insights such as determining ‘product improvement ideas’ or ‘future trends’. The key to successful subjective analysis is in empowering and training the personnel at  various customer touch points to ask probing questions of customers and flag answers which require deeper analysis. Flagging answers will allow nuggets of information flagged as ‘key data points’ to be highlighted and not get lost in the sea of information.  Additionally forming a deep relationship between people interfacing with customers at multiple touch-points such as social media channels, customer service channels, website etc. and subject matter experts such as product managers and designers who are within an organization will allow for business insights to be captured in ‘real-time’ rather than ‘after the fact’.

Creating an Integrated Multi-Channel Strategy Using a ‘Top-Down-Bottom-Up’ Approach

Challenge

Mobile and Social have been hot topics of discussion over the past several years but not very well understood by most organizations. With 130M idevices sold worldwide, 300,000 native iPhone applications created, more than 7B downloads by Q3 2010 and with the market research firm Nielsen projecting the US smartphone penetration to be over 50% by 2011, it is not surprising that many organizations are gravitating towards creating iPhone and other mobile device based applications. In addition, the relatively low cost of entry into the mobile device app market has encouraged organizations to develop such applications just for the sake of getting themselves a mobile presence. However, without a holistic understanding of how the apps would integrate into the organization’s business functions and goals, companies are unable to establish or generate a measurable ROI such as building and sustaining a community or customer relationship, improving customer loyalty, increasing revenue or decreasing cost. Without a clear strategy in place defining how to leverage the mobile, social and digital channels to meet business goals, confusing or even conflicting directions arise within an organization that will eventually lead to disenchantment with these critically important communication vehicles.

Key Considerations

Prior to creating the first iPhone application, enlisting fans for a Facebook page or responding to users on Twitter, brands should consider holistically understanding the dependencies between the mobile, social and digital channels as well as key considerations for each of these distinct channels.

Developing an integrated multi-channel strategy which ties back to business goals and considering mobile, social and digital as key customer interaction channels are critical steps in developing a holistic approach to understand a client’s business functions and goals.

When implemented correctly, an integrated multi-channel strategy can provide a 360 degree view of the customer, create a consistent customer experience and leverage business rules and processes across channels, which are all imperative to building customer relationships and meeting business objectives.

Intergrated Multi-Channel Strategy

Integrated Multi-Channel Strategy

Approach

An integrated multi-channel strategy which ties back to business objectives provides an over-arching framework to drive a consistent approach for implementing mobile, social and digital initiatives within an organization. It creates a shared vision and common language among the stakeholders.

A ‘top-down and bottom-up’ approach is used to implement the integrated multi-channel strategy. The top-down component focuses on interviewing stakeholders to evaluate the maturity of each of the dimensions in the hub-and-spoke diagram (above) using a maturity model, conducting a gap analysis between the current and desired maturity levels, prioritizing capabilities on a prioritization matrix and finally creating an actionable roadmap. The bottom-up approach relies on deriving  analytics-focused business insights using structured and unstructured data.

Create a Maturity Model

Within an organization different channels could be at different levels of maturity however they all play a critical role in holistically implementing the integrated multi-channel strategy for the organization.

A maturity model should be created for each of the dimensions in the hub-and-spoke diagram to clearly evaluate an organization’s current and desired maturity level for that dimension.  The key practices defined for each of the maturity levels provide an objective criteria to assess an organization’s maturity level for that dimension.

Maturity Level 0, Limited Presence: Organizations at maturity level 0 are characterized with limited mobile, social and digital presence. These channels are not considered core to the business and need for a better solution is not acknowledged by the organization.

Maturity Level 1, Reactive and Experimental: Organizations at maturity level 1 are characterized by the business reacting to external pressures. The need for improvement is acknowledged and pilot implementations exist but overall vision is absent.

Maturity Level 2, Defined and Repeated: Organizations at maturity level 2 are characterized by mobile, social and digital being considered core customer interaction channels and a global vision drives investment in these channels.

Maturity Level 3, Managed and Measured: Organizations at maturity level 3 are characterized by a seamlessly integrated channel experience and mobile capabilities expanding beyond implementing the core business capabilities.

Maturity Level 4, Optimization and Innovation: Organizations at maturity level 4 are characterized by a rich, dynamic, seamless channel experience where continuous improvement and optimization becomes the focus and capabilities drive deeper efficiencies and innovation.

Create a Prioritization Matrix

Analyzing a brand’s current and desired maturity level is the first step towards performing a Gap Analysis which identifies capabilities of interest required to close the gap between the current and desired maturity levels. These capabilities then need to be prioritized using a Prioritization Matrix across several dimensions such as risk, effort, implementation complexity and business impact.

Sample Prioritization Matrix

Sample Prioritization Matrix

Create a Roadmap

Areas of interest prioritized on the prioritization matrix serve as input to create an actionable roadmap showing project dependencies and estimated timeframes for long-term and short-term projects with a focus on incrementally deploying capabilities within the organization.

Implementation Roadmap

Implementation Roadmap

Derive Analytics-Focused Business Insights

Analytics-focused business insights provide direction on how to refine the implementation strategy to meet business objectives. Business insights can be derived from structured data (data stored in a structured format such as web logs or databases) as well as unstructured data (data collected via comments, reviews and the social channel). With the correct tools, processes and infrastructure in place, this data can be analyzed to draw business insights such as top selling products, top revenue producing search terms and provide real-time predictive analysis.

Creating a Mobile Maturity Model

A mobile maturity model describes key practices for each of the maturity levels and provides a framework and an objective criteria for clearly evaluating a brand’s current as well as desired mobile maturity level. Analyzing a brand’s current and desired mobile maturity levels is the first step towards performing a Gap Analysis which helps to identify capabilities of interest. These capabilities then need to be prioritized based on risk, effort and business impact to create an actionable roadmap.

The mobile maturity model described below consists of 5 distinct maturity levels:

Level 0, Limited Mobile Presence: Level 0 is characterized with limited mobile presence, mobile is not considered core to the business and need for a better solution is not acknowledged by the organization.

Level 1, Reactive and Experimental: Level 1 is characterized by the business reacting to external pressures, need for improvement is acknowledged and pilot implementations exist but overall vision is absent.

Level 2, Defined and Repeated: Level 2 is characterized by mobile being considered a core customer interaction channel and a global vision drives investment in the mobile channel

Level 3, Managed and Measured: Level 3 is characterized by a seamlessly integrated channel experience and mobile capabilities expanding beyond implementing the core business capabilities

Level 4, Optimization and Innovation: Level 4 is characterized by a rich, dynamic, seamless channel experience where continuous improvement and optimization becomes the focus and capabilities drive deeper efficiencies and innovation.

The image below lists key practices describing each of the mobile maturity levels :

Mobile Maturity Model

Mobile Maturity Model

Creating a Mobile Strategy

In my previous post I mentioned that brands who do not consider mobility an integral part of their business strategy may experience limited benefits  from building mobile applications as opposed to brands who focus on developing a mobile strategy which ties back to business goals. A mobile strategy should provide a framework to help brands identify development, cross-platform, monetization, promotional and globalization strategies prior to developing mobile applications.

A mobile strategy provides the framework, vision and guidance on which mobile applications will be built. When creating a mobile strategy be sure to address the following:

1. Key Market Insights: Provide an overview of the mobile market focusing on mobile penetration, market share by device and OS worldwide as well as in the US. I have found spending a few minutes on the Gartner Hype Cycle for Emerging Technologies is a helpful way to show the ‘state’ of emerging technologies.  In this section I also touch upon mobile, social, digital usage patterns and high-level discussion on challenges such as device / platform fragmentation.

2. Competitive Analysis : A competitive analysis is a  good way to study a brand’s competition and the gap between the brand and the innovators and leaders in that business vertical. A detailed competitive analysis focusing on features, functionality and capabilities will help to clearly define the short-terms and long-term objectives the brand hopes to achieve with mobility.

3. Project Sponsors and key Business Stakeholder Interviews: One of the key steps in building a successful mobile strategy is in identifying business stakeholders from cross-functional teams. Interviewing the stakeholders on their goals and objectives to be met via the mobile channel, their target audience and their mobile behaviors and discussions around projects, data sources and application touchpoints will help to ensure cross-functional support and buy-in.

4. Develop the Mobile Strategy: When implementing a mobile strategy, one methodology that I have had success with is POST (People, Objectives, Strategy, Technology) advocated by Forrester. The mobile strategy should be customized to the brand based on their unique requirements, project prioritization, risk (e.g. resistance to adoption, concept maturity etc.), LOE and business benefit (e.g. increasing sales, decreasing costs or increasing loyalty).

5. Best Practices & Mobile Trends : Identifying best practices and mobile trends help brands to best leverage this emerging technology in building mobile websites, native apps and hybrid apps to meet business objectives in the short-term as well as long-term.

Integrated Mobile / Digital Strategy

Integrated Mobile / Digital Strategy

Clients need to define an integrated and holistic digital / mobile strategy across multiple customer touch-points which ties back to their business goals

In my previous post I mentioned that at Blue Saphyre we have created a framework of documents which we refer to as the ‘Web 2.0 Strategy Framework’. It is an integrated and holistic approach to understand a client’s business functions and goals (across multiple channels).

The concept of the web 2.0 Maturity Model document is based on maturity models created by Gartner – however the difference is that the key performance areas (KPAs) identified typically influence the digital / mobile strategy.
– Mobile
– Business Intelligence and Web Analytics
– User Generated Content (UGC) / Social Media
– Content Management Systems (CMS)
– User Experience (UX)
– Information Architecture (IA)

Each of these dimensions play a critical role in holistically understanding the current and desired mobile / digital maturity level of a client as well as in prioritizing capabilities and building a roadmap. These dimensions will continue to evolve may need minor customization based on the industry:

Analyzing the current and desired mobile / digital maturity levels is the first step towards Gap Analysis which helps to identify capabilities of interest. These capabilities need to be prioritized based on risk, effort and business impact.

Sample Prioritization Matrix

Sample Prioritization Matrix

Once the capabilities have been prioritized on a Prioritization Matrix an implementation roadmap can be created with a focus on ‘incrementally’ deploying mobile / digital capabilities in the organization.

Sample Roadmap

Sample Roadmap

Figure 3: Sample Implementation Roadmap

Things you should consider on acting on today – determine where your company / client falls on the mobile / digital maturity model.

Next up is a deep-dive into creating a mobile strategy – stay tuned.