The Altimeter Group has just released The 2014 State of Digital Transformation, its second report on the topic this year. Principal analyst Brian Solis spent time researching and interviewing leading businesses from different industries to see how they interact with customers through technology. The challenges faced in the process were also examined.
The report defines “digital transformation” 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.”
The report indicates that customer journey mapping is listed as the “epicenter” to drive transformation.
However, although 88 percent of the executives and digital strategists interviewed said they were undergoing digital transformation, only 22 percent claimed they had mapped out customer journeys. Thus, the Altimeter Group concluded that digital transformation is a concept many strategists are “now beginning to understand and pursue.”
Also, 42 percent of study participants claimed they have not officially researched the digital customer journey but have updated digital touch points with new social and mobile technologies and investments.
“Digital transformation is much more human than it is digital,” Brian Solis said. “Technology was meant to help businesses optimize processes and scale to become more efficient. Businesses got further and further away from their customers. Look at customer service, look at CRM, look at automated marketing. All of these things took the human out of the equation, and that’s not alright.”
(Editor’s note: How companies can better track their customers’ journeys is the sole focus of VentureBeat’s GrowthBeat event on August 5-6 in SF. We’ll be debating how CMOs should best be organizing their teams in order to boost growth, as well as showcasing the most compelling marketing technologies allowing them to do that.]
The Altimeter Group’s report also ranks the most important digital transformation initiatives. Improving processes that expedite changes to digital properties like websites and social platforms is at the top with 80 percent of interviewees agreeing that it’s “very important”. Updating websites and ecommerce programs for mobile came in second at 71 percent. Integrating all online service efforts into a frictionless customer experience is third at 70 percent.
According to the study, company culture is the number one challenge facing digital transformation today. Sixty-three percent of the interviewed participants put it at the top of the list, outranking cooperation failure and budgetary issues. Meanwhile, three percent of participants claimed that culture is not an issue.
“Executives of bigger businesses spend their days reporting to stakeholders and shareholders. Startup entrepreneurs report to investors. They get so hunkered down that they lose perspective,” Solis explained. “There’s no sense of urgency to [change culture] most of the time because you’re still having to make the numbers, you’re still reporting on a quarterly basis – you’re operating.”
Further research from Altimeter indicates that support from executive and C-suite leadership is needed to make culture change. 54 percent of companies were in consensus that CMOs were the top executives championing digital transformation efforts, while 42 percent claimed CEOs were.
Altimeter’s study states that “change agents” should also be present in a company order to drive transformation.
“Their whole mission is to get other people to see things their way, but it only works when they’re able to get people to see things at a bigger level, at a brand level, at a customer-centric level, not just because of technology, technology, technology,” Solis said. “That’s a mistake that a lot of people make is that they get too caught up in technology.”