I believe 2019 is going to be the year of velocity when it comes to digital transformation. By velocity I’m not merely referring to the pace of transformation, but also to the speed at which organizations respond to the needs of their customers.
If you’re still reliant on call-backs, placing customers on hold, tracking down paper-based files, and taking days to fulfill customer transactions, then 2018 should have been a major wakeup call for you.
2018: The Perfect Story
In 2018, we saw a perfect storm with traditional business models for financial services firms being attacked from all sides. We had non-traditional competition entering the marketplace at an alarming rate, and delivering a better customer experience. We saw FinTechs decomposing old-school banking business models and carving off the most profitable revenue streams for themselves. Then there was the ever-increasing regulatory environment making it even more difficult and costly to transact business.
Further, we had Big Tech like Amazon continuing to raise the bar on customer convenience and ease of doing business, driving customers to expect the same from traditional players. The end result of this evolving competitive landscape is that in 2018, we saw customer expectations rise to an all-time high, while customer tolerance for unmet expectations simultaneously fell to an all-time low.
Digital Transformation: Some Were Never Really in the Game
In today’s digital age, competition is just a mouse-click away and institutional switching has now become seamless, painless, and instantaneous. There was a time when changing companies was more trouble than it was worth. Customers would deal with a lot of disappointment, frustration, and neglect before they would endure the pain of moving their business elsewhere. Clearly those days are gone. Now, switching to a competitor happens with a few keystrokes or even a few taps on your smartphone.
Yet, some have entered 2019 convinced they’ve been on the right path to digital transformation. They may be surprised to find that simply delivering apps on top of legacy systems and an antiquated architecture means they were never really in the game to begin with. They’ll also be disappointed to find that the inability of that legacy infrastructure to scale to meet the online, real-time, 24/7 demands of today’s consumer means they’ll never achieve the goal of delivering the optimal customer experience. From here, it’s a short ride to disintermediation and a vicious cycle to inevitable obsolescence. 2018 just may have been the tipping point for the future of high velocity change.
The Key Elements of Digital Transformation
True digital transformation has several key elements that must be achieved. First, it requires a reorientation of the organization’s culture toward a hyper-focus on the customer that must result in delivering delightful and engaging experiences - not simply transactions. Next, no longer can enterprises be mired with lengthy development cycles. New products and services must be delivered in days or weeks, not months or years. It also means striving for real-time decision making and straight-through-processing, and adding customer value above and beyond the product level. This is no small undertaking and it’s certainly not going to be easy nor painless.
You already know that throwing more bodies at the problem is not a scalable long-term solution. To compete and remain relevant in this increasingly connected environment, you have to balance people and cutting-edge technology to get better, cheaper, and most importantly get faster.
- Because if you cannot deliver products and services fast, someone else will.
- Because if you can’t meet customer expectations, they’ll find someone who can.
- Because the window of opportunity gets smaller every day.
- Because being first, can sometimes be better than being perfect.
- Because it is the only way to respond to threats from digital-native competitors.
A quote attributed to American humorist Will Rogers states:
Even if you’re on the right track, you’ll get run over if you just sit there.
You’ve got to move, and you’ve got to learn to move faster and smarter than you are today. Velocity! Are you ready for 2019?