The 3 Pillars of Digital Transformation

3 pillars of digital transformation
"When customer engagement, operational efficiency, and agility all work within the same environment, it improves the customer experience and creates collaboration…"

Customer engagement, operational efficiency and agility – the three fundamental technological building blocks essential to digital transformation, according to Pega CMO Tom Libretto. At the Customer Engagement Summit in Munich, Tom talked about a better way to do business, drawing upon his prior experience in digital transformation leadership roles at JPMorgan Chase and Nokia. The full mainstage presentation is worth viewing on Twitter/Periscope, as his message is compelling and filled with real-world insights into challenges, roadblocks, and lessons learned.

1. Customer Engagement

The purpose of customer engagement is to acquire, retain, and deepen relationships, or make sales and distribution networks more empowered to sell more effectively. Outstanding customer engagement includes the ability to connect with customers across any channel and capture real-time sentiment. It’s based on understanding your customers on a deeper level – leveraging emotional, motivational, situational, behavioral, and environmental context.

Engagement can be transformed through artificial intelligence (AI) that, when applied pragmatically, allows organizations to connect with customers in a 1:1 way, personalizing the experience. The most mature and most effective technologies in the AI space today are in the decision management, natural language processing (NLP), text analytics, and machine learning areas. These tools can be used to engage customers more deeply in the moment. They allow organizations to provide the type of experience the customer expects, balanced with the needs of the business – goals, margins, acquisition targets, top-line growth, etc.

As an example, Tom cites Sprint’s success. Their AI and decisioning-based applications help make customer decisions in the moment, generating real-time retention offers that have produced incredible results – like an 800% average increase in cross-sell value.

2. Operational Efficiency

Silos, SLAs, ad hoc work, dependencies, compliance – terms typically used around operations, processes, and efficiency. But what operational efficiency is really about is getting work through your systems more effectively. In the context of digital transformation, it means making your operations more efficient so that you can react in real time to change business processes and scale operations.

And to get work through your systems more effectively, look to automation – tools like robotic automation can remove roadblocks and bottlenecks in your processes, freeing you to redeploy workers to areas/tasks of greater value. Robotics can extend into messy back-end legacy systems, fetching information when needed and delivering to other systems – becoming an API-like bridge without writing multiple APIs.

When it comes to automation, go for it - automate everything that can be automated. It helps organizations get leaner and increase efficiency. Tom mentions Cisco as an example of automation success. Cisco digitized their end-to-end customer service model to provide a frictionless customer experience. Through process automation, they have eliminated 4 million hours of customer wait time and up to 93% of human touch on non-value added work, cutting service costs by 80%.

3. Agility

The first two digital transformation pillars are important, but none of it matters if you can’t be agile. The ability to react and have your systems change with you to support digital transformation is essential.

Agility comes down to the software that you write. Multi-month, waterfall projects are no longer necessary. There is a better way – using self-tuning software that users visually design rather than code. Visual models are faster to build and change. They also enhance collaboration – giving teams of business users hands-on power to make decisions. This type of software development and deployment drives productivity across the organization and significantly improves time-to-market. It produces significant cost savings as well.

Get started on your digital transformation by working from the middle out

Massive projects often fail. The path to get to the end-state digital transformation is the most challenging. The problem is that organizations typically start their transformation with huge projects, like creating universal data marts or building completely new websites. However, there still exists a high level of dysfunction between what business management wants to deliver to the marketplace, and the translation of that into something an IT department can execute. In the end, organizations spend millions and millions of dollars and don’t progress much at all.

This is why traditional bottom-up and top-down approaches to transformation historically have failed. Tom suggests a different way – starting from the middle out. It’s defining an outcome that you want to achieve on behalf of your customers and mapping that outcome back to the different data systems and processes that are going to help you deliver that outcome. Then repeating that same process over and over again – starting with the outcome, not the channel or the data systems. With this approach, all of the planning that goes into developing a customer outcome in a set of customer channels is ultimately scalable and repeatable. And a platform-based approach gives you that power of scalability and reuse.

It’s just a better way to do business

When customer engagement, operational efficiency, and agility all work within the same environment, it improves the customer experience and creates collaboration across companies. Having a unified architecture where all of these experiences can come to life is the key to effective digital transformation.


LEARN MORE: Join us at a 2018 Customer Engagement Summit.

Get more insights from Tom and other industry experts with replays of past presentations on our events page.


ABOUT THE AUTHOR: Leanne Russell is the managing editor of Insights, Pega’s marketing-focused blog. She helps Pega staff and customers share their knowledge, experience, and success stories.