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TRUE OMNICHANNELSTRATEGIES TO IMPROVE OMNICHANNEL DELIVERY

WHITE PAPER

KEY TAKEAWAYS

• Why the word omnichannel usually leads to the misinterpretation of its goal

• Strategies to improve true omnichannel delivery

WHO SHOULD READ THIS DOCUMENT

• CIOs

• CTOs

• CEO

• Heads of digital transformation

TRUE OMNICHANNELSTRATEGIES TO IMPROVE OMNICHANNEL DELIVERY

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PROPRIETARY NOTE

CONTENTS

IT IS NOT ABOUT CHANNELS

OMNICHANNEL ARCHITECTURE DESIGN

CONCLUSION

What is Omnichannel?

Problems with the channel approach

Omnichannel requirements

Challenges

Achitecture design

Omnichannel Strategy Q&A

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1 Folley, E. (2017, February 6). True Omnichannel banking: Much more than skin deep. Retrieved from https://www.finextra.com/blogposting/13647/true-omnichannel-banking-much-more-than-skin-deep

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IT IS NOT ABOUT CHANNELS01

What is omnichannel?

Store Phone

Mobile

Web Social

“Omnichannel” is an often-abused tech buzzword. Most analysts would consider as “omnichannel” any solution that is able to provide a continued experience over several different channels. Accordingly to Finextra1, “omnichannel banking is universally recognised as the ability to deliver a seamless, real-time experience across any or multiple channels.”

The key points in Finextra’s statement are “real-time” and “across multiple channels”. Omnichannel tries to achieve a consistent customer experience regardless of the channel used by customers to reach your company. This idea has merit: making the customer experience seamless on every contact with your company, while keeping context, intent and fl ow is a fundamental step on the path to a digital business.

More than transactions, omnichannel focuses the customer-business interactions and the data collection and management that is done in those moments.

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From the previous paragraph, it should be quite simple to defi ne what omnichannel stands for. The underlying problem is the misinterpretation the word leads to. By interpreting “omnichannel” as the compound word of “omni” (of all things or in all places), most companies try to achieve an “omnichannel” strategy by extending their existing channel presence.

There are two reasons why this option is ineffective:

1. Silos - Existing channels (mobile app, site, self-service, customer-service, branch, store, ...) were designed as separate silos. They have their own business owners, processes (that are often paper-based), business logic, and supporting IT systems. This makes it diffi cult, time consuming and expensive to have a unifi ed view of the customer, and much harder to provide a seamless customer experience across all of the channels.

If omnichannel’s goal is to build a seamless, continuous, user-focused experience, what are the requirements to meet this target?

1. Business processes must be designed as customer experiences and not as extensions of the internal processes.

2. There is a transversal, channel independent, customer experience business processused on all channels. This process caters for the full customer experience regardless of the channel (continuity).

3. Customers want to have the same experience regardless of using their mobile app, calling the call centre or visiting a shop or branch (consistency).

2. Perspective - Most companies design their omnichannel processes focusing on their internal perspective: their internal fl ow, their view of their products, their vision of the world. If the objective is to provide a great, carefully curated, customer experience this is the wrong way to go about it. You are not only choosing the wrong focus of the experience, but you are also neglecting the authentic experience that customers want to have. Customer experiences are built around how customers perceive your business and products. It is the customer’s perspective that matters. The experience should be designed around customers and the relationships they build with your business. The keyword here is design: this is not something you do by externalising your vision on your processes, products or services. This is how you want the world to see your company, and in an increasingly digital world it is becoming obvious which companies understand this.

4. Channel variations are related with media (phone vs computer) or access levels (partner vs back-offi ce vs direct user access) and not with having multiple IT systems supporting them.

5. A customer experience business processperforms the important role of managing the process fl ow, gathering and validating data and linking the designed customer experience with the “internal reality” provided by the IT systems.

6. Customer experience should be seamless independently of channel technology, supplier, device, media or design.

7. Channels should be quickly and readily extendable. Adding a new channel or media to support an existing customer experience business process should be a simple affair.

Problems with the channel approach

Omnichannel requirements

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The main challenge for an omnichanel strategy is the misinterpretation of its objective. An omnichannel strategy does not rely on the need to have multiple channels (aka multichannel) or on extending the existing channels, but on the premise that every existing channel must be able to provide a consistent customer experience.

The main challenges for a true omnichannel strategy implementation are:

• The absence of a role responsible for end-to-end customer experience or if there is, this role is not empowered within the organisation.

• Lack of formal digital transformation strategy detailing what the organisation wants to achieve with customer experience beyond the traditional business.

• There is no underlying IT system catering for an end-to-end omnichannel customer experience in the form of a business process. BPM and Integration (EAI) platforms are focused on solving internal challenges. BPM addresses escalation or approval fl ows (both internal) and EAI exposes simple or composite services to be used by other systems, mainly in the form of transactions or fully automated workfl ows.

• Considering the broadest defi nition of channel, there are two types of IT channel systems:

» Core systems - Channels that own the core customer data they manipulate. These are usually used within internal (assisted) channels, require strictly controlled access, provide their own UI and carry their own internal logic. Examples of these are core banking systems, CRM systems, etc.

» Composite systems - Channels that use “services” to provide their functions. Most on-line channels use this approach. These are what most people would call “channels” and are accessed directly by customers, partners and internal users. Notice that there are internal systems designed using this principle.

» There is no obvious way to share a customer experience process between these two types of channels. Core systems are not usually process oriented, focusing more on access levels and transactions. Composite systems are more amenable to change but needs to be purposely designed to meet customer experience goals.

• Business logic, data gathering, and fl ow are implemented at the channels or at the core systems level:

» At the channel level, this creates redundancy and forces each new channel to duplicate the logic, fl ow and data gathering already implemented in other channels. The concept of omnichannel customer experience is also lost since no channel centralises this concept.

» Centralising at the core level is beset with its own problems. It is expensive, creates additional customisation levels at the core, time to market is slow and forces these requirements to compete with “real” core business requirements. Additionally, core systems do not have the concept of customer experience, fl ow, status model, which are essential for a successful omnichannel customer experience.

OMNICHANNEL ARCHITECTURE DESIGN02

Challenges

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In this diagram, it is clearly visible that the customer experience orchestration layer is a separate IT architecture layer that is responsible for the end-to-end orchestration of customer experiences regardless of the channel.

This layer is a high-level orchestrator for complex customer experience business processes, performing data gathering, validation, orchestration, continuity and integration (through properly exposed services) with the core IT systems. Since business processes are transient, this layer owns no relevant customer data. Data must be contextualized from the existing systems, orchestrated throughout the business process and committed at the end to the data owner systems.

Architecture design

By now, it should be obvious that there is no solution within the traditional IT architecture framework that can be used to deliver the required omnichannel vision. The traditional approach of extending the existing channels won’t work unless signifi cant requirement concessions are done, while also severely limiting future fl exibility and time-to-market.

The IT architecture design required to implement the omnichannel vision mandates a software layer that is responsible for the expected omnichannel functions. This layer transversally implements business logic and fl ow from the user’s perspective, providing a fl ow, continuity and a single development point for business logic and data gathering, while making sure that the core systems are correctly orchestrated to provide the required business function. This has the main advantage of removing the traditional silo-based IT architecture from the “public” view.

The following diagram depicts such a high-level architecture:

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Since the introduction of a new IT architecture is no simple affair and may have signifi cant future consequences, there are a few relevant questions that need to be considered while discussing its introduction:

• Question: Should it cover an important technical and/or business function that currently has no owner?

Answer: The new layer covers a new need: End-to-end customer experience business processes supported on all channels, internal or external.

• Q: Does it impact performance, maintainability, cost over existing alternatives?

A: The new layer supports a develop once, deploy everywhere principle for all channels. It should contain caching for running processes and enables and end-to-end vision control of the customer experience. In fact, maintainability and time-to-market should be substantially improved over the current architecture since both channel development and core development will become more focused, standardized and with little redundancy.

• Q: Can I use it in my internal channels (CRM, branches, partners)?

A: In fact, this is not only recommended but mandatory for a true omnichannel experience. Customers need to have the same experience regardless of their contact point, thus internal channels need to have access to the end-to-end customer experience business process.

• Q: How can I expose my internal channels to the customer experience layer?

A: There are two different answers to this question depending on the type of internal channel being used:

» If the channel is a services-based channel or has the ability to integrate third-party services, it is no different from integrating an external channel. Just invoke the customer experience layer’s services.

» If the channel is not services-based or able to integrate third-party services, there is a diffi cult choice. You can either choose not to give access to the internal users to the customer experience business process (not recommended), create a new user portal for internal users or provide access to the external channel (with limited access impersonation) to the internal users.

• Q: How can I create a new channel or media based on the existing customer experience layer?

A: The customer experience layer is exposed through APIs (or services). Therefore, any new or existing channel just needs to call the API with the right parameters at the right time. Thus, launching a new onboarding process on Facebook or through a chatbot is much simpler than repeating the whole implementation again.

Omnichannel Strategy Q&A

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Companies often fail to correctly assess and prepare for disruptive events. They are setup for incremental change, and once true disruption occurs it is diffi cult to identify it, never mind reacting in a timely fashion to it. The existence of multiple competing disruptions trends happening simultaneously also does not help. Things like fi ntech, blockchain and the rise of Artifi cial Intelligence all require a different strategy and it is not always clear which one to prioritise. In the end, most companies will just continue looking for ways to incrementally improve what they are doing today.

Real disruptive change will only come from a change on the fundamentals of an industry.

As we have seen in many industries, including music, software distribution, transportation, travelling and lodging, true disruption comes from investing in customer relationships. Companies that are able to control and foster a lasting relationship with their customers by addressing what they expect are the ones that will thrive on disruption.

Omnichannel’s role is to provide the tools for traditional companies to compete and reinvent themselves.

CONCLUSION03

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