HP commissioned Forrester to conduct 11 in-depth interviews with CEOs, COOs, CIOs, and transformation leaders across North America, Europe, and Asia. The intent was to understand what was really going-on with respect to digital and its effects on the delivered customer experience. We weren’t looking for a statistical review of the current situation but more of qualitative appraisal of what is working and what’s not. The challenge with digital is that a lot of things are new and hence looking backwards doesn’t get you very far.

1. A Forrester Consulting
Thought Leadership Paper
Commissioned By HP
October 2014
Rising Customer
Expectations And
Improving Efficiency
Drive Firms’
Transformation Efforts

2. 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 Don’ts.....................................................................11
Key Transformation Innovation Recommendations ...................................11
Appendix A: Methodology ..............................................................................12
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3. 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, Forrester’s
research uncovered a number of critical success factors:
› CEO leadership breaks down the organizational silos.
Senior management’s 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 CEO’s 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

4. 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.
“We’re 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 they’re 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 management’s 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

5. 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 team’s 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
technology changes (see Table 1). Forrester found that
firms’ transformations centered on becoming more
customer-experience-focused and putting the client at the
center of the organization.
TABLE 1
North American Transportation Company
Drivers of the
transformation
This transportation company needed to meet travelers’ needs for real-time status updates and
self-service that were being set by an Internet-based taxi/limo startup. At the same time, it needed
the empowered traveler to use the mobile app to offload calls from its expensive call center.
Scope of the
transformation
The transformation involves all customer-facing systems, dispatch, and driver communications, as
well as back-office processes. It’s an end-to-end commitment to streamline the customers’
experience.
Changes in skills
portfolio
The firm had to master Agile development processes, customer experience thinking and design,
API management, and a new security model based on protecting data rather than networks.
Technology
implications
To accomplish this, the firm had to re-architect its closed back-end systems and security model to
integrate its core reservation system with third-party travel sites and provide better tools for
different customer segments (personas).
Innovative
transformation
practices
It started with a focus on the overall flow of information between the company and different
customer segments (personas) and not on specific devices or applications. This led to a clearer
understanding of how travelers use information and the best ways to improve their travel service.
Benefits and
outcomes
Travelers feel more in control. The firm now competes with a traveler’s tool to help enterprises
better manage travel. The firm also now competes with the analytics tools that it provides to help
customers better manage their overall travel and not just the price of the ride to airport.
Next steps
The firm plans to integrate systems with even more third-party travel sites and supporting systems
(hotels, airlines, etc.). It will improve travel analytics tools for corporate clients so it can better
optimize overall costs (rather than compete on reduced fees).
Source: Forrester Research, Inc.

6. 4
› Breaking down the organizational silos impeding
great customer experience (CX). The focus on
improving customer experience often uncovers the critical
need to break down the business structures that impede
serving the customer. CIOs are creating cross-function
teams within IT as part of those transformations to make
technology management more responsive and agile. In
parallel, CEOs are breaking down the channel silos and
other parochial organizational thinking to simplify the
customer journey.
“The transformation started as a discussion
with me and the new CEO. Initially, it was
about streamlining and simplifying IT. But
very quickly the focus shifted to breaking down
the organizational product silos so we could
build and deliver more connected digital
products and services.”
— CEO, healthcare products division, European
manufacturer
Customer Journey Mapping
Eliminates Channel Silos And
Justifies New Technology Spending
One of the critical tools in respondents’ digital
transformation was customer journey mapping.
“We invested in a new CX team. Previously,
mapping the customer journey for us was just
tracking the internal sales or lead generation
process. When you’re mapping the customer’s
actual journey, it’s about understanding
everything that touches that journey. We
invested in a team and gave them responsibility
on customer experience.”
— Executive vice president, platform services, North
American business services company
The interviewees were using CJM as the cornerstone of the
transformation in three fundamental ways:
› Creating outside-in customer perspective to make
vision actionable. The use of this process tool became a
critical way to illuminate the bottlenecks and frustrations
of customers as they tried to execute tasks like ordering
or placing a customer service request. Firms where using
customer interviews captured on video to cut through the
politics and deliver the bad news to senior management.
› Understanding of how siloed organizations block
great customer experiences. In many companies, one
of the biggest CX challenges is creating a holistic view of
what the customers are trying to accomplish. CJMs help
the business see the entirety of the workflow and not just
their narrow, channel-only perspective.
› Establishing the ROI for legacy application rewrites
and upgrades. One bank used the process to define the
need to rewrite legacy systems. Like most companies, the
back-end rationalization efforts have been caught in an
endless loop with IT talking about the costs and the
business complaining about the lack of business agility.
To break the logjam, the bank used CJM to clearly
document every instance of where the current systems
were not working and create a clear value statement for
redesigning the systems. This business context gave the
CEO the rationale and confidence to sign off on a major
legacy rewrite (see Table 2).
“The CEO’s direct reports make up our customer
experience council. He wants to see our value
proposition in terms of customer journeys. You
need that level of detail before you differentiate.
We show the customer feedback with videos
from the CJM exercises so the CEO hears the
cold hard truth about what works and what
does not. It drives a higher degree of honesty
and accountability.”
— CIO, Asian bank

7. 5
Significant Investment On New And
Upgraded Technology Platforms
And Applications Improves The
Experience
As the embodiment of the respondents’ processes and
organizational models, transformation initiatives quickly
uncovered issues and challenges in the existing technology
platforms and business applications.
“We had to build a new broker/middleware
platform that sits between our tablet apps and
our legacy systems. It does user authentication
and it manages the APIs that we use to access
the legacy systems.”
— VP of application development, European transportation
company
TABLE 2
Asian Bank Company
Drivers of the
transformation
At an Asian bank, the CEO believes that growth will come from a relentless focus on the customer
service and improving it across every facet of its products, operations, marketing, and service.
Scope of the
transformation
This strategy involves the entire organization, thereby cutting across functional and product line
boundaries. Business processes that customers touch directly and that support customer-facing
staff are examined and optimized.
Changes in skills
portfolio
This outside-in focus with customers at the center has required the bank to master new skills in
user-centric design, software development, and voice of the customer investigation.
Technology
implications
The need to improve customer experience has driven the redesign of the website, mobile apps,
and a grounds-up rewrite of the core banking system. In parallel, the bank has swapped out large,
established vendors for smaller, more nimble players with expertise in new technologies like
analytics and processes like Agile and customer journey mapping.
Innovative
transformation
practices
An outside-in focus on customers has pushed the bank to master good user-centric design, Agile
development, and customer journey mapping using videos to communicate the customers’
challenges. This technique unites all stakeholders around a common good: happy customers. It
also used journey maps to highlight the problems of legacy systems and the business value of
rewriting the platform to focus on direct customer outcomes.
Benefits and
outcomes
This transformation has already led to a 25% reduction in customers’ time to self serve and
significant increases in the bank’s Net Promoter Score.
Next steps Next steps include extending the banking platform to new developing markets with digital-first
capabilities.
Source: Forrester Research, Inc.

8. 6
Firms quickly realize that their systems are as fragmented
and siloed as the organization and, as a result, would
require an increased level of spending and management
attention. The technology makeover focused on four critical
areas:
› Major investments to modernize back-end systems.
Many of the core systems that manage transactions are
30-plus years old and need to be radically overhauled for
the age of the customer. Respondents specifically called
out that their efforts to improve CX had finally forced
senior management to fund the complete replacement of
systems like core banking and central reservations (see
Table 3).
› Adding new functionality to improve multichannel CX.
It’s not just the main business systems that are being
replaced. Fifteen-year-old web commerce platforms were
also being upgraded and leveraging the cloud to address
the multichannel requirements.
› APIs to facilitate internal and business partner
integration. Firms were also going into existing systems
and applications and adding APIs to make it easier for the
business and developers to share data with resellers and
product development partners as well as new mobile and
tablet applications. One company had to create APIs so
customers could make a reservation from within the
Internet travel portals.
› Focus on data capture and flows, not specific
hardware or applications. Three of the respondents
were focused on the growing importance of capturing,
managing, and analyzing data/information as a key
element of their transformation. In one account, they had
increased their data management budget by a factor of
five in order to uncover the granular insights needed to
improve execution as part of the transformation.
“Initially, I challenged the team to not think in
terms of devices or apps: ‘Focus on the value of
information to us and our customers.’ Our
mantra was ‘one view of the core information.’
Whenever something moves, the traveler needs
visibility to that information and [we need to
aggregate it] for the travel manager.”
— CEO, North American transportation company

9. 7
TABLE 3
North American Hospitality Company
Drivers of the
transformation
This global hospitality provider competes with a premium customer service offering. The focus of
the transformation is to deliver a better experience for customers across every channel,
particularly the guest experience on a mobile device
Scope of the
transformation
The transformation is forcing a realignment of business priorities, systems, and the organization. It
affects franchise partner relationships and hotel operational systems as well as the company’s
core reservation and customer-facing systems.
Changes in skills
portfolio
The biggest change is alignment and cross-functional coordination, but the company is also
investing in Agile development processes and skills. Further, every staff member must be
retrained to use the new digital systems.
Technology
implications
The mobile interface has required back-end systems to be exposed through more granular, on-
demand APIs. The company is also tackling the tough transition of full integration between its
reservation systems and hotel operational applications.
Innovative
transformation
practices
The most important change has been the adoption of Agile techniques and alignment among
business and technology teams. The team blends skills and functions and uses two-week sprints
and three-month release cycles.
Benefits and
outcomes
The big payoff is an increase in room nights booked, particularly for travelers booking on their
mobile device. Senior management now understands that digital transformation is not just about
building a mobile app, but also re-engineering the underlying systems and processes.
Next steps The company will rebuild the reservation system for digital-first experiences and more fully adopt
Agile processes throughout the organization and franchise relationships.
Source: Forrester Research, Inc.

10. 8
The Creation Of Digital Teams Drives
Reskilling
Digital is also forcing firms to rethink their skills portfolio in
both the business and IT. The retraining efforts, coupled
with hiring around a different talent profile, were part of the
cultural change that firms needed to make.
“Since we do not have the new technology skills
in-house, we are leveraging innovative, smaller
vendors and not our traditional suppliers. To
manage this growing portfolio, we are
bolstering our vendor management.”
— CIO, Asian bank
Overall, companies were focusing the culture and mindset
shift in four key areas:
› Creating formalized cross-function teams with new
skills. In addition to adding staff with an expertise in user
experience design and CJM, interviewees were actively
trying to break down the talent silos and creating
multidisciplinary teams where marketing, sales, service,
and IT worked directly together. Firms were creating
these hybrid groups with titles such as “customer
experience council” or “digital accelerator lab.”
› Investing in Agile and development/ops processes
within IT. Most of the re-engineering efforts focused on
changing the IT culture. The core element of the
technology management change was the adoption of an
Agile development methodology that had initially been
used to develop mobile apps (see Table 4).
› Improving new technology and architecture
proficiencies. To build new apps and update their
existing platforms, interviewees were relying on an
extended portfolio of technologies in areas like analytics,
cloud services, and API management. In parallel, firms
were implementing modern application architecture with
composite apps and a service-oriented design. This left
companies either retraining their employees, hiring new
staff, or using third parties.
› Focusing on vendor management. The growing use of
a broader array of smaller, more innovative vendors,
external business, technology services, and third-party
open source platforms forced a number of respondents to
improve their supplier oversight skills beyond a low-cost,
procurement-focused strategy.
“As part of the transformation, we are
converting from a reactive IT department to
proactive consultancy. The development team
was a black hole and did not interact with the
business. The move to Agile has been a key part
of this openness and culture change.”
— Vice president of development, North American retailer

11. 9
The Transformation Sets The Stage
For Creating An Agile Execution
Culture Across Business And
Technology
None of the respondents talked about doing a large-scale
single-phase implementation like the re-engineering efforts
of the past. They all saw their transformations as an
ongoing effort that circled through the different elements like
culture, business models, processes, technology, and skills
in multiple phases. Firms planned to continue their multiyear
efforts well into the future.
“CEO and CFO take the transformation very
seriously. They do not want to be asset-heavy
losers where a digital startup steals the
customer because they are more agile.”
— CIO, European logistics company
At a broad level, the goal was to make their organizations
better able to deal with customer- and technology-driven
change. Companies were attempting to create a sense-and
-respond culture that can quickly adapt to market and
customer changes (see Table 5).
TABLE 4
European Transportation Company
Drivers of the
transformation
A global shipping company is transforming to increase revenue and find operational savings.
Changes in the global transportation market drove a re-engineering of the entire business from
operations efficiency to new product development and IT.
Scope of the
transformation
The project started with a single massive effort to connect key assets so they can be monitored,
tracked, and optimized. IT, sales, and logistics teams worked side by side to accomplish this.
Changes in skills
portfolio
The company is investing in much more advanced IT capabilities to surround connected products
with predictive analytics services. This forces an upgrade in service design and sales team ability,
as well as changes in IT to implement the improvements.
Technology
implications
IT had to transition from being an expensive operations organization to a nimble innovation
partner to the business. It moved its technology center to outside London to attract top
development and program management talent. The company simplified its infrastructure and
application portfolio to reduce IT operational costs by millions of euros.
Innovative
transformation
practices
IT was able to keep 10cents from every euro it saved to fund the reskilling of its people and its
process and infrastructure upgrade.
Benefits and
outcomes
What started as an operational cost-cutting play with smart-connected shipping containers ended
up being an opportunity to grow revenue through improved service levels and visibility.
Next steps The firm is investing heavily in analytics to uncover and document operational improvement and
cost-cutting efficiencies.
Source: Forrester Research, Inc.

12. 10
“At the core of the transformation is the
thinking around the ‘scaled’ Agile framework.
The framework is about applying Agile in how
the business operates, not just within IT
development.”
— CEO, healthcare products division, European
manufacturer
TABLE 5
North American Business Services Company
Drivers of the
transformation
This corporate travel and expense services company has a healthy paranoia about being
replaced by a more agile startup and feels the relentless pressure coming from the world’s most
mobile people — travelers. As a result, the company’s transformation centered on improving its
ability to innovate and create a travel ecosystem of partners.
Scope of the
transformation
This CEO-led investment involved the entire company, including technology, customer service,
product development, sales, business development, and strategic partner investment. It involved
most technology platforms, and the culture of the firm had to be technology-centric.
Changes in skills
portfolio
The company has learned to master customer experience design as a core competency, Agile
development and DevOps as a product development skill, and customer journey mapping as a
communications vehicle.
Technology
implications
The firm transformed from an on-premises software provider to a multitenant software-as-a-
service provider over six years. This has required a complete overhaul of the technology platform
to become a travel-and-expense cloud with over 2,000 integrations to partners’ system.
Innovative
transformation
practices
The firm created a new customer experience group to bring the voice of the customer into the
development and service design process. It built customer journey maps to get people on the
same page and focused on the software platform and using software to define and express the
brand.
Benefits and
outcomes
The firm improved customer satisfaction and raised its Net Promoter Score from 28 to 60 over
three years. Better internal alignment around customer outcomes improved its ability to innovate.
Next steps
The firm plans to build out a travel-and-expense cloud as an ecosystem of partners and startups,
creating more value and capability in employees’ travel days, with corporate expense managers
managing and optimizing travel costs and risk. It will think about how to embed travel and
expense management into communication so the traveler only has to handle the exceptions.
Source: Forrester Research, Inc.

13. 11
Transformation Dos and Don’ts
The interviews uncovered a range of challenges and pitfalls
to avoid in terms of process mistakes, mindset changes, the
scope of the change, and the technology investments (see
Table 6).
TABLE 6
“If You Could Do One Thing Differently About Your Transformation, What Would It Be?”
Asian bank
“I would have not started with process re-engineering; I would have gone directly to implementing
customer journey mapping. It injected a needed customer perspective into the organization.”
North American
hospitality
company
“Make sure that the people on the team who are doing this work are not allowed to have an
orientation to a predisposed solution and are empowered to develop their own software, use a
cloud solution, etc. that meets the actual needs of the customer.”
North American
retailer
“I would move more quickly to drive tighter alignment with the business and be more customer-
centric. We were doing technology for the sake of doing tech better before.”
North American
restaurant chain
“You need to understand the back-end systems and business process integration requirements
upfront. We can do location-based marketing, augmented reality, Bluetooth. But it’s integrating
them with the business operation that’s difficult.”
North American
business services
company
“I would start from scratch in terms of our applications and infrastructure and put our entire
existing technology stack in the convalescence mode. I would then invest and build the entire
product and ecosystem APIs from scratch, in parallel. I would run a complete redesign of our
technology separate from the current systems.”
Source: Forrester Research, Inc.

14. 11
Key Transformation Innovation Recommendations
Forrester’s in-depth interviews with business and IT executives yielded several important observations/best practices:
› Create a new account management role in IT to improve technology management/business alignment.
One CIO created the “account manager role” to interface with the business in the same way that a salesperson
would. The AM was responsible for coordinating the different projects within IT for each individual business
group. They were also chartered with managing the “leads/demands” for new applications and services while at
the same time bringing to bear the appropriate technical resources within IT to help the business.
› Allow IT to keep part of operational savings to invest in new process and skills. In one interview, the CIO
had struck a deal with the business so IT could keep 10% of the savings from reducing its operating costs. They
then used the newfound budget to fund the upskilling of IT in areas like program management, CX, and Agile to
better support the company’s innovation agenda.
› Create cross-functional teams to break down organizational blinders. Multiple respondents have created
dedicated groups together to drive the interdisciplinary thinking key to digital success. One company focused on
creating a single customer experience council where all the channels got together to solve consumers’ pain
points across the silos. Another created a digital innovation center with combined business, technology, product
design, UX, and program management skills.
› Establish a special lab where the business can see digital products/services in action. To drive buy-in from
the business, one company set up a digital product/service platform innovation center. The lab built out product
and services prototypes so senior managers could have a “show and tell” program that made the opportunities
posed by digital products more tangible.
› Leverage customer journey mapping to create a business case for replacing legacy systems. One Asian
bank used the customer journey mapping process to break the year-long logjam on legacy replacement. The
CJM process clearly documented where the traditional online banking system was not meeting customer needs
and created a well-defined ROI for building of a whole new digital banking platform.

15. 12
Appendix A: Methodology
In this study, Forrester interviewed 11 companies from the financial services, hospitality, logistics, manufacturing, retail,
telecom, and transportation industries in North America, Europe, and Asia to evaluate their digital transformation efforts.
Survey participants included decision-makers in CEO, CIO, VP of applications, and VP of transformation roles. Questions
provided to the participants asked about the business drivers of the transformation, the role customer experience played in
the changes, how respondents re-engineered business processes and technology platforms, and what they would do
differently. Respondents were not offered incentives to participate. The study was commissioned in May 2014, and the
interviews were completed in September 2014.