Digital initiatives don’t always have to start with the customers…
When you think of digital transformation, it’s tempting to only rework your customer-facing systems. But if you don’t upgrade your back-end systems as well, your approach may well fall short.
When a company considers the adoption of digital technology, the first place they often look is their customers’ experience at every touchpoint – on what’s visible and perceptible: “What would be the impact of transforming the customer journey using personalized content and laser guided omni-channel contact to drive successful outcomes and customer delight?”
Nothing wrong with that at all. The only problem is that this customer-first view of digital tech adoption almost always comes at the exclusion of mid and back-office functions. Functions that could benefit just as much, if not more, from the application of 21st-century digital platforms, tools and technologies to 20th century customer-last systems.
When are investments in multichannel integration most effective?
Research undertaken by McKinsey on the state of digitisation among financial institutions across Europe concluded that investments in multichannel integration do not appear to have been as effective as expected for the organizations surveyed, apart from when digital investments included the automation of back-office processes and customer-side analytics.
This doesn’t mean that front office digitisation and customer experience management is a waste of money—in fact, it’s exactly the contrary. It means that cleaning up the front office and simply plugging it into an old back office system that was never designed to support these newer technologies may often be unsatisfactory and even counterproductive.
Digitising an organisation is not about veneering some digital stuff onto existing, legacy systems. Rather, it is about modernising, and in some cases, reinventing existing systems from end to end. It’s simply not possible to separate what happens on the screen from what happens behind the screen.
Legacy systems designed for a static environment can’t keep up
For example, take the decision management systems in use at most P&C-type insurance companies today. These were designed to support fairly static underwriting and claims management processes where the front-end customer experience management was primarily knowledgeable humans; contact centre staff, agents, adjusters and so on.
Those systems were never designed to support fast-changing rules, the rapid introduction of new product offerings, or anywhere, anytime, any device quotations to customers. And they certainly weren’t designed to quickly process new rules based on location information from GPS devices or driver behaviour from car telematics systems. But, when the company focuses their digital transformation initiatives only on front-end systems, that’s exactly what they’re now expected to do. The results are predictable and almost always the same: “why isn’t our new website and mobile app delivering the business results we expected?”
The problem is a fundamental design limitation of these systems. They use IT-coded decision logic built into the core decision management applications. Making changes or adding rules is very time-consuming, costly, and requires skilled (and scarce) IT resources.
While this approach worked well in the relatively static old world, it is totally unsuited to the new world. Today’s market demands decision making processes which can adapt to changing business needs quickly and at low cost.
Transform your business with better rules management
Relying on IT to unpick code every time something changes is becoming a critical inhibitor to almost every digital transformation initiative.
A better way is to move complex decision-making from highly complex code in core applications to a specialist digital rules engine, which implements even complex rules as plain English statements in an Excel-like interface.
This enables the business to control and manage how digital technology is deployed and maintained. More importantly, it allows business analysts – not programmers – to make changes to decision logic quickly and accurately without needing any IT involvement. The net result is that the business achieves operational needs and demands for agility.
It’s natural to want to start with the customer, but consider, just for a moment, if that’s the only area of the business to consider or even the best place to start. Layering digital veneers onto 20th-century back-office processes fundamentally misses the opportunity to transform entire areas of operation.
For more information on any of the above see www.progress.com/corticon