Be a Digital Leader, Not a Laggard



Growth in customer data to deliver contextualized experiences, empowered by technologies such as cloud and machine learning, will create a significant gap between digital leaders and laggards when it comes to using technology for strategic innovation. By embracing cloud platforms in a transformative way, organizations can ensure that data and insights connect people with information and processes that ultimately lead to better customer experiences.

A recent 451 Research VoCUL survey shows that digital leaders are likely to embrace new technologies to enable innovation. The figure below illustrates the growing gap between digital leaders and laggards in terms of embracing disruptive technologies for competitive differentiation.

The adoption of artificial intelligence and machine learning to power intelligent business applications accounts for the largest gap between digital leaders and their lagging counterparts, but shifting applications to the cloud and embracing intelligent personalization are also critical differentiators as businesses adjust to the age of empowered customers and their changing expectations. It's important to realize that digital transformation is not just an IT trend; it's a well-planned business and IT innovation strategy with the goal of aligning around a digital culture, which drives investment in new approaches to remain relevant in the eyes of customers. Immediacy is essential. Businesses must navigate the disruption as the customer experience shifts from a transactional relationship toward a more nuanced, complex interaction between humans and the automated systems and devices on which they rely.

Harnessing the power of data is essential for businesses as they capitalize on improving the customer experience. The pressure to deliver differentiated and consistent customer experiences is essential because multiple industries are facing considerable disruption. There will be a seismic shift in growth strategies for business and consumers to subscribe to services rather than buy products. The result will be a stronger focus on loyalty and relationships that build on consistent, positive interactions with customers. It's about aggregating and connecting insights to deliver a consistent and dynamic experience across the customer journey. The goal is to achieve competitive differentiation by viewing the world through the eyes of the customer and modifying interactions of the experience accordingly.<

Considering that 70 percent of organizations are still formulating digital transformation plans, the industry has a long way to go to ensure vision meets reality. Businesses must react, especially when it comes to delivering contextual experiences. Technology is now central to how people experience the world, and it is shifting the center of gravity from businesses to individuals in an unprecedented way. Catering to customers' preferred means of engagement and consumption is becoming a critical part of businesses' strategic value propositions and competitive differentiation.

According to our data, improving customer experience is the top driver for software investments in the next 12 months. Engaging experiences begin with a complete view of the customer. Rapid data growth, the maturation of machine algorithms and increasing regulatory compliance demands (e.g., the European Union's General Data Protection Regulation) will shift the customer data landscape from simply managing transactional data toward embracing an open platform that can incorporate the flood of unstructured data (social, behavioral, location, IoT, etc.) to ensure that systems of engagement are more intelligent. By embedding intelligence into customer-facing processes, businesses can build deeper connections and create more contextually driven interactions.

Businesses will prioritize investment in intelligent digital platforms to ensure that back-end processes are integrated and offer a consistent, frictionless user experience. 451 Research data reveals that 87 percent of businesses believe machine learning for automated contextual recommendations is crucial for creating personalized experiences. The streams of data that flow through every business can be used to build process-centric, intelligent applications that enable enterprises to engage with customers, partners and employees via sophisticated interfaces that run in the background. Businesses need new development environments to create immersive experiences for users, anywhere and on any device.

It's virtually impossible to plan for all potential customer journeys, because each is essentially a nonlinear, self-directed interaction across a customer's channel of choice. And it's not only digital interactions that need to be planned for, but also in-store encounters, contact-center interactions, and sales meetings. Given that 80 percent of online purchases in 2018 will be influenced by mobile technology and that, within a decade, the average person will have more conversations with bots than other humans each day, organizations that fail to deliver contextual experiences will be passed over for those that do.

The explosion in connectivity, intelligent devices, and the applications running on them makes it increasingly possible for real-time context and user preferences to enable personalized customer experiences. Individuals today expect to be more self-directed, and consequently to own or influence more of the technologies mediating their experience of the world. Yesterday was about one-way customer interactions. The future is about two-way engagement anywhere, on any device.


Sheryl Kingstone is research director for business applications at 451 Research.