Having a plan in place before you launch a digital transformation project will save money and result in greater success
That’s what organizations spent on customer experience (CX) technologies in 2019, according to IDC. Come 2022, CX spending is expected to top $640 billion, which is more than what is forecast to be spent globally on Software-as-Service technology (SaaS) then.
CX is hot — so hot, in fact, that more than two-thirds of companies say they now compete primarily on CX as opposed to price or product, which is up from only 36% one decade ago, according to Gartner.
As a provider of SAP CX technology, we at Dickinson + Associates couldn’t be more thrilled — or concerned, frankly. Here’s why.
While we are only too happy to provide customers the CX technology they need to compete today, we are concerned anytime someone comes to us in a hurry to buy a hot commodity without thinking about digital transformation in a more holistic manner. The same could be said for any number of hot-selling innovations such as CRM, e-commerce, artificial intelligence or business analytics technologies.
Don’t get us wrong: we completely understand why customers are in a rush to invest today. In fact, thriving in the new normal that the COVID-19 pandemic has ushered in often depends on it. This includes the collaboration software companies need to keep their dispersed workforces in communication today, and the e-commerce technologies they need to keep their virtual doors open.
But one-off buys often done in a hurry can lead to problems down the road. Here are five reasons why.
- Rash decisions often fail to take integration concerns into account
Congratulations on your new investment into commerce technology. Your customers are likely to be thrilled at how easy it is to shop with your company. But what do you do when they ask you about omni-channel experiences? Can they buy online and return purchases to a physical store? What do you say to internal constituents that want feedback on business analytics? Can you capture that data and share it in any meaningful way on a consistent basis? Can you apply AI towards it to glean new insights?
- Hurry-up buying often overlooks the infrastructure required to support new investments
If you’re a line of business (LoB) buyer who buys marcom technology for your people in your marketing department, do you coordinate with CIO or IT department on a regular basis? You should, if the SaaS applications that you invest in live beyond your organization’s firewall, which makes it virtually impossible to integrate these apps with your company’s data centers without heavy lifting. And about those apps that you now depend on: do you know how much data they create, where it is stored and how accessible it is by others in your organization? While you’re thinking about these questions, have you thought about how your company’s physical systems and supply chain could handle a holiday promotion your CMO has planned? Could its success, in other words, overwhelm your company’s existing infrastructure and bring your organization to its knees? It’s worth considering.
- One-off buying creates organizational silos and damages collaborative cultures
Question: Who inside your company “owns” customer data? Is it the LoB buyer or CMO who paid for the app that led to the creation of new customer data in the first place? The CIO whose job it is to protect, store and back-up the data, and make it readily available to all? Or is the CFO who understands the true, long-term value of customer data and who must plan accordingly for it? In many organizations, the answers to these questions are unclear. This is especially true in organizations in which tech spending is not coordinated. In places such as these, stakeholders often protect their apps, data and infrastructure zealously, which traps value in the siloes of companies. This often leads to low morale, turf battles and distrust.
- Uncoordinated buying can leave organizations exposed to privacy, regulatory and security challenges
Speaking of a lack of coordination, how familiar are you with HIPPA, GDPR, FERPA and COPPA? While you’re at it, what about CCPA, CFPA, GLBA and any growing number of regulatory protections on data, privacy and security? The truth is that data protection has emerged as a top priority for conducting business today. In additional to international, national and state or provincial regulations and laws, there are a growing number of local and industry standards that businesses of all stripes must contend with. Rushed or uncoordinated tech purchases make compliance all but impossible. Put another way: there is no one-off tech purchase that could provide as much value as what could be lost by a single breach or compromise. Just ask Target, Yahoo or Equifax.
- Company competitiveness
As mentioned at the beginning of this blog, we are thrilled at the level of interest we are seeing in SAP CX technology, which we think can be a game changer. But that’s only if and when CX is coordinated with other investments. In the case of SAP, that’s with SAP Analytics Cloud (SAC), SAP S/4HANA, SSFS and SAP Spend just to name a few technologies. No matter the technology platform you choose, be it Oracle, Salesforce, SAP or whomever, the key to creating a sustainable competitive advantage for your organization lies in your ability to integrate your investments.
Tying It – And Technologies – All Together
Despite the pandemic and the global economic crisis that resulted from it, there are bright spots on the global economy. One of them is spending on digital transformation, which is forecast to grow 10.4% in 2020 to $1.3 trillion, according to IDC.
What’s interesting about all this spending, which is nearly as large as the GDP of Spain, is where it is doing the most good. Consider a 2020 study on digital transformation published by Deloitte Insights. It found that “greater digital maturity is associated with better financial performance.”
Companies considered to be “fully digital mature” grew their revenue at three times the rate of “lower digitally mature” companies and their net profits at nearly the same rate, according to Deloitte Insights.
What is digital maturity, you may wonder? It’s tech spending done right. Think coordinated, integrated and protected.