forrester survey reveals rising customer expectations & improving efficiency drive firms’...

Download Forrester Survey Reveals Rising Customer Expectations & Improving Efficiency Drive Firms’ Transformation Efforts

Post on 20-Jul-2015

95 views

Category:

Business

0 download

Embed Size (px)

TRANSCRIPT

  • A Forrester Consulting

    Thought Leadership Paper

    Commissioned By HP

    October 2014

    Rising Customer

    Expectations And

    Improving Efficiency

    Drive Firms Transformation Efforts

  • Table Of Contents

    Executive Summary ........................................................................................... 1

    Firms Are Forced To Make Significant Changes To Meet Customers

    Expectations ....................................................................................................... 2

    CEO Leadership Breaks Down The Organizational Silos ............................. 2

    Customer Journey Mapping Eliminates Channel Silos And Justifies

    New Technology Spending ............................................................................... 4

    Significant Investment On New And Upgraded Technology Platforms

    And Applications Improves The Experience .................................................. 5

    The Creation Of Digital Teams Drives Reskilling ........................................... 8

    The Transformation Sets The Stage For Creating An Agile Execution

    Culture Across Business And Technology .................................................... 9

    Transformation Dos and Donts ..................................................................... 11

    Key Transformation Innovation Recommendations ................................... 11

    Appendix A: Methodology .............................................................................. 12

    ABOUT FORRESTER CONSULTING

    Forrester Consulting provides independent and objective research-based

    consulting to help leaders succeed in their organizations. Ranging in scope from a

    short strategy session to custom projects, Forresters Consulting services connect

    you directly with research analysts who apply expert insight to your specific

    business challenges. For more information, visit forrester.com/consulting.

    2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited.

    Information is based on best available resources. Opinions reflect judgment at the time and are subject to

    change. Forrester, Technographics

    , Forrester Wave, RoleView, TechRadar, and Total Economic Impact

    are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective

    companies. For additional information, go to www.forrester.com. [1-RLHU8C]

  • 1

    Executive Summary

    Customers are changing their behavior faster than

    companies can evolve their business models, operational

    processes, and technology platforms. As a result, firms are

    changing their organizational structures and technology

    platforms to break down the silos that hinder delivering

    compelling customer experience.

    In May of 2014, HP commissioned Forrester Consulting to

    conduct research on digital transformation efforts across a

    mix of industries. The research delved into the business

    drivers, process changes, technology implications, and skills

    retraining that underpin firms re-engineering initiatives.

    Forrester conducted 11 in-depth phone and face-to-face

    interviews with CEOs, COOs, CIOs, and transformation

    leaders across North America, Europe, and Asia from June

    2014 through September 2014. Even though their

    transformations are multiyear projects, these business

    leaders are already seeing dramatic increases in Net

    Promoter scores for customer satisfaction, the ability to

    compete on service not price, and more engaged

    employees with lower attrition.

    KEY FINDINGS

    As firms undertook their transformation journeys, Forresters

    research uncovered a number of critical success factors:

    CEO leadership breaks down the organizational silos. Senior managements buy-in is critical to creating a

    culture of serving the customer.

    Customer journey mapping (CJM) eliminates channel silos and justifies new technology spending. Over

    50% of the interviewees leveraged customer journey

    maps to articulate the needs/requirements of their

    transformation.

    Significant investment in new and upgraded technology platforms and applications improves the

    experience. Rebuilding legacy systems as well as

    Internet platforms is at the center of firms re-engineering.

    The creation of digital teams drives reskilling. Companies are making major changes to their skill and

    process portfolio as part of the transformation.

    The transformation sets the stage for creating an Agile execution culture across business and

    technology. Companies efforts are ongoing as they

    develop a more adaptive sense-and-respond culture.

    We needed to meet our end customers

    expectations that had been set by Internet-

    based ridesharing services for real-time

    information and self service via a mobile

    app.

    CEO, North American transportation company

    We had to build a new broker/middleware

    platform that sits between our tablet apps

    that drivers use and our legacy systems

    with the data.

    VP of application development, European

    transportation company

    The CEOs direct reports are part of our

    customer experience council. He wants to

    see our value proposition in terms of

    customer journeys. Only by getting to that

    level of detail can you provide a

    differentiated experience.

    CIO, Asian bank

    The CEO and CFO do not want to be asset-

    heavy losers where an agile, digital startup

    steals the customer away.

    CIO, European logistics company

  • 2

    Firms Are Forced To Make Significant Changes To Meet Customers Expectations

    From June 2014 to September 2014, Forrester conducted

    11 in-depth interviews with CEOs, CIOs, and digital

    transformation leaders from financial services, hospitality,

    logistics, manufacturing, retail, telecom, and transportation

    companies in North America, Europe, and Asia.

    Respondents faced a number of challenges that forced

    them to undertake a major redesign and renovation of their

    businesses. But at their core, these companies were

    grappling with how to meet rising customer expectations

    and grow the business.

    We needed to meet our end customers

    expectations that had been set by the Internet-

    based taxi startups delivering real-time

    updates and self service via a mobile app. At

    the same time, we needed to reduce the volume

    of calls to our more expensive call center.

    CEO, North American transportation company

    To truly become customer-centric, interviewees were using

    tools like customer journey mapping a visual

    representation of the series of interactions between a

    customer and a company that occur as the customer

    pursues a specific goal to change their processes,

    customer loyalty systems, technology platforms, skills

    portfolio, and coordination with their business partners.

    One of the more interesting benefits to come out of the

    customer-centric investments was lower operational costs

    (see Figure 1). By breaking down the organizational silos

    and simplifying their processes from a customer-first

    perspective, firms saw greater efficiencies from the

    customers doing their own ordering, lower call center

    staffing requirements, and streamlined decision making.

    During the interviews, we uncovered five critical factors that

    were shared across the majority of respondents: 1) CEO

    leadership breaks down the organizational silos; 2)

    customer journey mapping eliminates the channel silos and

    justified new technology spending; 3) significant investment

    on new and upgraded technology platforms and

    applications improves the experience; 4) the creation of

    digital teams drives reskilling; and 5) the transformation sets

    the stage for creating an Agile execution culture across

    business and technology.

    Were moving to a very customer-centric approach what can we do to make this as simple as possible for our customers? We want

    to add value to what theyre doing and to encourage them to buy groceries.

    VP of applications, North American retailer

    CEO Leadership Breaks Down The Organizational Silos

    In the majority of cases, the CEO or at least the CIO was

    driving the vision and the transformation efforts within firms.

    The research shows that senior managements involvement

    was critical in two key areas:

    FIGURE 1

    Better Customer Experience Drives Improved Operational Efficiency

    Source: Forrester Research, Inc.

    Improved

    operational

    efficiency

    Better

    customer

    experience

  • 3

    The CEO had the vision about being the leader in customer service. He oversaw and drove the

    original strategy definition and then the focus

    on customer experience. Now, 80% of the

    executive teams conversations center on customer journeys, and we have 100 projects in

    progress to improve it.

    CIO, Asian bank

    Creating the business/customer vision at the center of the transformations. To ground and focus the re-

    engineering efforts, the CEO plays a crucial role in

    defining and communicating the goal of the projects.

    Senior leadership is also critical in holding the business

    accountable to make the required culture, process, and