Organisations across the globe are caught in the midst of a digital revolution - one that has sent shockwaves rippling through every industry. Business leaders recognise the scale and pace of change: 68% of executives surveyed by Accenture say that they expect their industry to be significantly disrupted by technology in the next three years.
By Tiffany Carpenter, Head of Customer Intelligence Solutions at SAS UK & Ireland
As agile startups continue to disrupt the value chains of traditional industries, weathering market change has become part of the ebb and flow of doing business. What’s more, with new regulations mandating industries such as banking and utilities to open up their data, processes and systems, digital innovation is not a luxury, but a necessity.
Thriving innovator or struggling incumbent - what’s the difference?
Collaborative cultures, clear strategic goals and intelligent ways of using data set innovators apart from traditional businesses, enabling them to create new sources of value. Established incumbents can learn a lot from their more dynamic counterparts. Especially if they focus on four key behaviours that drive success in the digital world.
For decades, financial services companies, banks, retailers, insurers and utilities providers have taken a one-size-fits-all approach to customer service. Traditional business models that focus on serving broad customer segments using complex legacy processes are no longer relevant in today’s world of ultra-personalised experiences. Companies that are slow to realise this will soon see their customers leave for a competitor who is more responsive to their individual needs.
Industry and value-chain disruptors are focused on customers. Everything these organisations do - whether it’s product development, service delivery, billing or marketing - starts from a detailed assessment of customer expectations and habits. These companies then follow customers as they journey through different touch points. This process helps fine-tune each engagement to ensure the best all-round customer experience.
By paying attention to customer journeys, companies can gain more insight into how customers’ behaviour and expectations change based on the way they interact with the company (online, via mobile app or in store) and the kinds of products and services that they buy. Collecting, analysing and acting on this data supports a virtuous cycle of continuous improvement that organisations can use to create more tailored customer services and improve customer satisfaction.
To deliver seamless and satisfying customer journeys, organisations must bring together all their expertise and data. Traditional enterprises often struggle to build cross-functional teams because their processes, systems and talent are isolated in business units. When distinct teams do get together in these organisations, a competitive atmosphere can emerge between departments that are not used to working collaboratively. This slows down innovation and limits the eventual impact of new initiatives.
By contrast, disruptive businesses value collaboration, preferring to bring together expertise from across their business to drive new business and enhance customer engagement. Bringing multiple departments together helps innovative companies understand how each area of their business will be impacted by their overarching strategic goals and development projects.
What’s more, innovators don’t just collaborate internally. They also work closely with industry partners, helping them take advantage of skill sets, data and industry insights that they may not usually have access to. Internal and external collaboration gives digital innovators an upper hand over incumbents, providing them with a bigger picture of changes in their industry and revealing new opportunities for growth.
Because they haven’t historically been customer-first organisations, traditional businesses often dedicate too much time to measuring KPIs that deliver limited value. For instance, established organisations often focus on internal KPIs, such as the average handle time of customer calls or how much new traffic has been created by a new marketing initiative. These metrics tell you very little about how your customers rate your products and services.
Equally common is a tendency for industry incumbents to take a bottom-up approach to measure key metrics, collecting different sets of data in each business unit and then aggregating it to form a single view of the truth. However, in practice, this approach rarely delivers clarity. And it often leads to arguments over which department’s data is accurate instead of evaluating actual performance and adjusting strategic goals accordingly.
Increasingly, industry-leading companies take a top-down approach to measure the performance of their businesses. In this system, a company first defines the information that it wants to know. Next, it creates a plan for collecting the data it needs to measure business metrics. This enables them to align their processes and establish a centralised decisioning capability that focuses on customers.
Traditional companies often see failure as something to avoid at all costs. As a result, when industry incumbents do manage to bring together their data and expertise from different business areas, fear of failure and subsequent reprisal can hold back innovation.
Lengthy development of new data-driven initiatives before testing often compounds the problem. This causes individuals and departments to tread cautiously when they should be pushing the boundaries of what is possible.
In contrast, 'fail fast, succeed faster' is the motto of industry disruptors who actively seek to accelerate failure using iterative and agile development methods. The belief is that the more you fail, the more you learn. And the faster your teams can learn, the quicker they can develop game-changing products, services and customer engagement strategies. Embracing failure in this way can help you disrupt your own business before your competitors do.