There are many reasons why companies fail to transform customer data into value, ranging from lack of executive sponsorship to data privacy issues to incomplete data to not having the tools to unlock this value. But by far the most important reason is a failure of the executive team to appreciate that technology alone is not enough.
More than three decades of experience has shown us that an optimal mix of three crucial components – people, process, and technology – is critical to most strategic initiatives in today’s digital environment. This mix is typically adjusted at various stages of a project to ensure that critical goals are met, but overall, we have found that focusing 50% on people issues, 30% on process issues and 20% on technology is the formula for success. That’s right…technology is actually the least important requirement. It is necessary, but not sufficient. Each of these components presents its own set of challenges:
The people component presents the greatest challenge, because cross-functional collaboration is almost always necessary and because users are sensitive to change. For example, most customer-facing initiatives require tight collaboration between marketing/sales and your technical staff. Why? Because you need “creative” talent helping to secure more real-time, on-line and off-line data from customers sensitive to privacy issues, plus “technical” expertise to determine how to harness more real-time on-line and off-line data from external sources, and to identify new tools to deliver smarter decision making.
Also, new processes and technology almost always require changes in the way users do their jobs. Users who do not understand the point of these changes, who are not allowed to participate in their formulation, or who are not given adequate preparation and training will, understandably, resist. Gaining user support early on and keeping it throughout an initiative is an important driver of success.
The process component is also key, because inappropriate use of technology will only automate poor processes. Many organizations have well-established customer-facing processes, but the application of technology will almost certainly require adjustments. For example, you may need to determine how best to reach your increasingly digital customers during the first 70-80% of their buying journey (e.g., information gathering, supplier evaluation, selection of offer) before they contact your company.
Sometimes too, organizations try to correct process problems with software that contains one or more processes prebuilt by the vendor, and then force these “foreign” processes on users. This can be dangerous. Process change must be always be driven from within.
Too often, the technology component is given disproportionate emphasis, sometimes to the detriment of the overall project. Ultimate success or failure is determined by user adoption. But when IT departments “own” the implementation, the end-user experience can take a back seat to technical considerations.
Successful organizations first put their customer-facing processes in order. Then they secure buy-in to these processes from employees, partners, customers and other stakeholders. Only in the final stages do they apply technology in support of these processes.
At ISM, our strategic consulting approach is focused on getting the people, process and technology mix right at every stage of your project. We would be happy to discuss developments impacting your business in more detail with you over a call. You can also choose a good time here: https://calendly.com/