The 7 Business Benefits of Digital Transformation

Outstanding Operations A Benefit of Digital Transformation

Business Benefit #5 of 7 – Outstanding Operations

In my last four blogs (Selling Success, Service Excellence, Product & Service Innovation, and Customer Loyalty & Advocacy), I discussed a variety of transformative digital strategies and benefits relating mainly to the “front office.” Of course, front office capabilities are, by definition, at the forefront of an enterprise’s engagement with customers, and therefore vital to achieve success in the digital age.

In this blog, I would like to focus on those other areas of the enterprise that have an equal, if not greater, impact on customer experience--notably, the back office operations. Savvy business leaders understand that every function of a company affects the customer relationship — whether that function involves hiring great people, creating simple contracts, completing orders correctly, delivering products and services on time, providing accurate invoices, or maintaining service availability. In fact, the vision of a digital enterprise cannot be complete without considering how the entire enterprise embraces the advantages enabled by digital technology and a digital mindset.

Simplicity is the key for effective data visualization in the digital world.

A global survey by pwc found that three out of five operations leaders (61 percent) expect that changes in customer behavior will disrupt their operations over the next five years. Operations expert DMG Consulting found that the back office represents 2 ½ times the number of employees compared to front office operations. And research from McKinsey & Company suggests that digitizing information-intensive operational processes can cut costs by up to 90 percent and improve turnaround times by several orders of magnitude. So it seems pretty clear that the back office and its attendant operations have a major impact on customer experience and the bottom line.

Today, I would like to focus on three key areas of value that impact Outstanding Operations.  

  1. Process Automation
  2. Machine Learning & Process Optimization
  3. Data Visualization

Three Key Areas of Outstanding Operations

Let’s first talk about process automation. The back office functions of a company vary significantly by industry, but generally the key components include things like processing orders and claims, completing credit approval and billing, and ensuring fulfillment of products and services. Collectively, these activities are a significant portion of what a typical enterprise works on day-to-day. In addition, these tasks often arrive in blocks, creating heavy queues of work that can diminish employee efficiency, slow processing time and place strain on employee resources (and employees themselves). While the addition of employees to manage workflow is sometimes looked to as a solution, the digital age clearly demands new thinking to streamline operations and optimize the employee and customer experience.

McKinsey research suggests that as many as 45 percent of the activities individuals are paid to perform today can be automated by adapting currently demonstrated technologies. Process automation drives productivity, performance, accuracy, execution speed and agility. It’s a game changer on all levels and extends across front and back office operations.

Vlocity is at the forefront of driving process automation in the industries we serve. Here are just a couple dramatic improvements enabled by industry-specific, digitally enabled cloud solutions from Vlocity.

  • Harvard Pilgrim HealthCare recently revamped its digital front-end for brokers and agency administrators, creating a near zero-defect environment in their back-end processes for quotes, applications and enrollments. They were also able to reduce cycle time by more than 60 percent. As a result, Eric Schultz, president & CEO of Harvard Pilgrim, has said, “We have never been in a better position to compete in the health insurance marketplace.”
  • Canadian telco TELUS faced a range of challenges in B2B quoting and contracting due to manual, disconnected processes. Contracts took weeks to complete and data follow-up and re-keying were regularly needed to complete orders. By integrating over 60 disparate systems into a single, digital interface and workflow, TELUS has reduced its lead-to-contract process by an astounding 80 percent. The operational efficiencies gained here are tremendous, but imagine as well how much more responsive TELUS is to its customer prospects, resulting in faster proposal turnaround and higher close rates.

A global survey by pwc found that three out of five operations leaders (61%) expect that changes in customer behavior will disrupt their operations over the next five years.

The results are real, and driven by many of the key tenets of digital disruption I introduced in my first blog post:

  1. Put human experience at the center of decision-making (customers and employees)
  2. Innovate rapidly
  3. Understand, nurture and invest in digital as a competitive advantage

Beyond the gains fueled by process automation today, digital leaders are employing machine learning methods to further optimize automated processes. With machine learning, systems are not programmed to perform a precise function, but rather designed to “learn” through exposure to various real-world scenarios. A machine might observe a process step that consistently identifies human errors or sub-optimal customer workflow, and then employ an alternate approach to improve defined, desired outcomes.

According to a recent article in the Harvard Business Review, corporate investment in artificial intelligence is predicted to triple in 2017, becoming a $100 billion market by 2025. As more money is spent to develop AI capabilities, it’s clear that businesses will be in a race to acquire the ability to intelligently mine the large corpus of ever-increasing data needed to establish valuable new algorithms—all in an effort to extract new insights more quickly and with greater precision.

Essentially, the power of machine learning is finding the best outcome among all possible outcomes within the full range of the decision criteria. Finding the best outcome leads to better operational performance. According to Morris Cohen, professor at The Wharton School, machine learning will lead to better outcomes because it utilizes all of the data available compared to current methods, which ignore potentially relevant additional information.

Of course, executives driving Outstanding Operations need to understand what specifically needs improving and whether the intended goals are being met. This starts with identifying the KPIs that matter, defining the sources of information, understanding the current state and target future state, and establishing a mechanism to track progress over time. The explosion of data makes this final step particularly challenging, given the volume, velocity and variety of data entering enterprise systems today. Some data is structured and other data is not. These new realities mandate new approaches for how companies visualize data to achieve desired outcomes.

Operational leaders will need to understand the few measures that have the greatest impact on process efficiency and improving the customer experience, and then create simple, easy-to-understand views to measure ongoing improvement.

Every company or organization has a reality that’s embedded deep in their data, hidden in isolate pools of analysis that rarely get identified or expressed. Frequently, even tangible data is not communicated to stakeholders in a memorable way. By leveraging innovative digital tools, enterprises can seize upon dormant data, express it visually, improve decision-making, and help employees engage with customers in more relevant ways. Vlocity, for example, provides industry-specific customer consoles that integrate every facet of a customer’s interaction journey, product and service ownership, order status, social relationships, churn propensity and other variables designed to help employees instantly understand who they are interacting with and how to best add value to the relationship.

Vlocity Clickstream Analytics  

Simplicity is the key for effective data visualization in the digital world. Operational leaders will need to understand the few measures that have the greatest impact on process efficiency and improving the customer experience, and then create simple, easy-to-understand views to measure ongoing improvement. To be effective, operational measures will need to be visually presented one way for the operations team, and, if applicable, another way to front office personnel. Business context is crucial, and critical data demands a visualization style that’s targeted, meaningful and impactful. For example, churn propensity algorithms factor in a variety of operational data, including customer-level billing discrepancies, order accuracy and SLA compliance, but its visualization will ultimately be expressed as a single churn risk figure or color code. While the underlying predictive model may be complicated, its visual presentation should not be. With the continued explosion of data emerging from devices, sensors and systems, data visualization will continue to rise in importance to deliver Outstanding Operations and, ultimately, customer success.

If you are interested in learning more about the many and growing methods to visualize data, I encourage you to check out The Periodic Table of Visual Elements, sponsored by Visual-Literacy.org. This site contains an encyclopedia of approaches to help you present data in an intuitive and meaningful way.

To succeed, business leaders must institute an inclusive, holistic, and well-funded digital culture to adapt and flourish in the age of digital transformation.

Digital leaders know that a digitally-enabled front office is, by itself, insufficient to achieve real digital success—it’s just one (albeit very necessary) piece of the puzzle. To avoid becoming a DINO-saur (Digital In Name Only), companies must execute end-to-end transformations to fulfill the promise of the digital enterprise while also working tirelessly to change the collective mindset and bring forth a transformative digital culture. This means creating a blueprint for Outstanding Operations as part of your overall digital strategy. Whether it’s leveraging process automation, machine learning or data visualization, it’s essential that all sectors of an enterprise--including those nested in back office operations--work in a coordinated, digital fashion to collaborate effectively with the latest digital tools—and each other—to stay competitive and enhance the customer experience. To succeed, business leaders must institute an inclusive, holistic, and well-funded digital culture to adapt and flourish in the age of digital transformation.

I hope you enjoyed this blog, and I welcome your feedback.  Please join me for the next installment of The 7 Business Benefits of Digital Transformation where I will explore the challenges faced by CIOs in leading the digital revolution and the opportunities to transform the role of IT. Business Benefit #6 of 7 is IT Modernization.

Mark Stevens

Vice President Customer Strategy

At Vlocity, Mark leads the company’s global Customer Strategy team, focused on helping enterprises define their digital strategies and realize maximum value from digital technology investments.  With more than two decades of CRM experience, Mark has helped hundreds of customers transform their business with innovative, customer-centric approaches that incorporate the latest digital trends and technologies.  Prior to Vlocity, Mark was Vice President & Head of Global Value Services at Oracle.  He has also held leadership positions at Siebel Systems, iXL Enterprises (now part of SapientRazorfish), and AT&T.