Digital Transformation in the Age of Digital Disruption

This post was authored by Adrian Johnson and originally appeared here on Liferay.com


It isn’t possible to read a news article or open a newspaper without reading about Digital Transformation. From consultants and software vendors to infrastructure providers and analysts everyone is talking about digital transformation and how it can improve customer experience, increase revenue streams and improve operations.

So what defines digital transformation?

Capgemini Consulting writes: The use of technology to radically improve performance or reach of enterprises.

Thought leader Brian Solis of Altimeter Group defines it as: The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle.

Technology is an important component of digital transformation but the most successful stories feature organisations that combine digital activity with strong leadership to empower digital transformation. These businesses also recognise it is a major change management program. Technology alone can’t deliver a transformation. Organisations need to understand what their customer wants at any given moment in time. Think about how to effectively engage customers and think about all the touchpoints that customers have across their entire lifecycle.

Customers hold the power in the digital age

In recent years there has been a marked increase in the power of the customer. Customers now have the power of choice as barriers to change continue to lower and anyone can change suppliers, find a new vendor, or new source of services or goods.

As a result of the power shift to the customer, churn is now a key risk. Previously organisations could rely on a certain amount of loyalty from customers or apathy as change was often difficult. However, new technology and digital platforms have made it easier for customers to shop around and look for better services or value for their money.

Customers are expecting unique and tailored services that meet their needs. Generic processes that appeal to the masses are no longer acceptable. We live in an always on, just in time, on-demand world and if your organisation can’t offer personalised customer service your customer will find a company that can. Customers are no longer willing to put up with average service delivered to the masses. A single experience or interaction impacts customer satisfaction and therefore customer loyalty is often fleeting.

Digital transformation or digital disruption?

Repeatedly the organisations representing successful digital transformation in the new-age economy are Uber or Airbnb – but are they really digitally transforming?

It’s possible to make the case that these organisations are in fact digital disruptors not digital transformers. The challenges faced by legacy organisations are very different to an Uber or Airbnb business. These new disrupters didn’t encounter the challenge of changing existing systems in the same way that legacy organisations must. Maintaining existing business, managing current systems, dealing with operational processes and business models – these factors make digital transformation far more complex.

Feedback from our customers points to some of the main challenges of digital transformation:

·       Internal silos between business units and systems

·       Legacy systems that contain essential customer information were never designed to expose the data

·       Change leader to head the initiative across the organisations to drive digital transformation

·       Budgets being continually squeezed

·       Integration of organisation-wide systems

In fact a recent Forrester study identified that among customer experience decision makers the biggest technical barrier to customer-facing systems was inadequate integration with back-office systems.
Vendor Landscape: Digital Experience Portals, Mark Grannan, Forrester, 4 January 4, 2016

In light of the challenges a question we hear at Liferay consistently is “How do I solve the real problem of delivering our services across channels in a practical, valuable way to our customer?”

Use a platform that will enable flexibility

The answer most commonly is to start with a platform with all the core components in one place and mitigate the risk in acting on a digital trend.

It’s not about trying to do everything at once, start somewhere but choose a platform that provides flexibility to extend and develop. Today’s businesses are constantly discovering new ideas, new source of growth and new initiatives that they want to unlock so they shouldn’t be inhibited by a digital platform.

We regularly see software development being a key differentiator as it enables organisations to develop on top of the platform selected at the start and deliver new projects. Agility to be flexible – in order to adapt and evolve as the market or your business changes – is critical as it’s difficult to predict what will change and how the competition will evolve. Therefore, flexibility in your chosen platform is key to overcoming these challenges.

Digital Experience Platforms to Power Digital Transformation

The concept of a digital experience platform (DXP) is now emerging as horizontal portal and content management systems (CMS) technologies converge. As businesses require a broad range of capabilities to deliver the necessary personalised customer experience a system with limited features is not enough.

Gartner’s Magic Quadrant for Horizontal Portals 2016 identified: The primary catalyst for change in the horizontal portal market is the response to digital business transformation: the evolution of traditional portal into the digital experience platform. The DXP reflects a business-driven focus on improving customer, partner and employee experiences across digital and physical channels.
Gartner “Magic Quadrant for Horizontal Portals” by Jim Murphy, Gene Phifer, Gavin Tay, Magnus Revang, 17 October 2016.

Responding to business’ need to manage and deliver hyper personalised experiences across every digital touchpoint Liferay introduced Liferay Digital Experience Platform (DXP). Liferay DXP is the next advancement of the Liferay portal platform redesigned and extended with greater capabilities for digital businesses. At the core of DXP is the portal acting as the integration layer connecting backend systems across business operations so that companies can give consistent and unified experiences to customers, partners and employees.

Align your business to better serve customers and attract new ones

So, whether you are just starting a digital transformation or you’re reviewing progress to date some key points are worth remembering:

  • Your customer should be at the heart of any transformation strategy – think about their experience and journey in every interaction with your organisation.
  • Digital Transformation is not just about technology; operational processes and people are just as critical to success
  • Silos within operations and systems are causing some of the greatest challenges – think about how you can incentivise the entire organisation to deliver a seamless experience and integrate all touchpoints.
  • Digital is constantly evolving so choose technology that allows your organisation to be flexible.
  • Start small and prove the concept, then grow from there.

2016 Gartner Magic Quadrant for Horizontal Portals

Read what Gartner says about the role of horizontal portals in delivering on digital experience initiatives and key findings and recommendations in the 2016 Gartner Magic Quadrant for Horizontal Portals. Plus, find out why Liferay is named a Leader in the report for the 7th consecutive year.

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