Getting Digital Right

Getting Digital Right
By delving deeply into customer experience,
business process design and operating model change,
organizations can more effectively move from ‘doing’
digital to ‘being’ digital.

2 KEEP CHALLENGING July 2016
Executive Summary
For most organizations across the globe, digital is not an option but a
necessity. For their own survival, businesses must respond to the threat
of what digital business analyst and author Brian Solis calls “Digital
Darwinism:” the phenomenon of technology and society evolving faster
than organizations can adapt.1
Countless businesses have already lost market value and relevance
due to their failure to adapt to industry dynamics. By 2018, according
to IDC, one-third of leaders in virtually every industry will be disrupted,
particularly by competitors that leverage third-party platforms to
innovate new offerings, reach new customers, radically expand supply
and go-to-market networks, and disrupt their industries’ cost and profit
models.2
The disruption will impact products and services, customer
expectations, business models, technology, business processes and
employee practices.
In response, most organizations have launched a digital initiative,
according to industry reports, and are investing heavily in this area.
This trend is expected to continue:
• By 2018, two-thirds of Global 2000 CEOs will have put digital
transformation at the center of their corporate strategies.3

GETTING DIGITAL RIGHT 3
• The percentage of enterprises creating advanced digital
transformation initiatives will more than double by 2020,
from 22% today to almost 50%.4
Not all digital initiatives, however, are successful. Too often,
organizations take a myopic approach and undertake initiatives in a
siloed fashion, by launching an online channel or mobile application, for
example, or automating a few processes. While these types of initiatives
can be important milestones on the digital journey, they need to be done
as part of a holistic and comprehensive strategy that considers not just
technology but also a change in mindset, behavior and, fundamentally,
the way businesses and employees work.5
To successfully transform, organizations weighing digital initiatives must
delve deeply into the following non-technology considerations:
• Customer experience.
• Business process design/redesign.
• The operating model.
This white paper focuses on how organizations can address these
elements across every digital initiative, in order to not just “do” but
ultimately “be” digital.

Focus on Customer Experience
Research shows that nearly 89% of customers will walk away from a company with
which they have considered doing business after just one poor customer experience.6
The impact can be significant – businesses are estimated to lose as much as 20% of
revenue from unsatisfactory customer experiences.7
This is why we often see organizations turning to digital initiatives with the goal of
improving customer service, enhancing customer experience and providing flexibil-
ity to customers. However, these digital initiatives often become ends in themselves,
with businesses failing to assess their impact on the customer experience. Discon-
nects between channels often cause misaligned information on inventory, customer
data and service level commitments.
Let’s take an example. A fast food restaurant launches a mobile application to enable
customers to place orders. However, because the menu on the mobile applica-
tion is not updated regularly, customers end up placing orders for items that are
no longer available. Although the orders are confirmed on the mobile application,
the restaurant cannot fulfill them, resulting in delays, cancellations and extreme
customer dissatisfaction.
Customer experience in today’s digital era is not limited to digital channels but cuts
across online and physical channels, as well. As a result, digital initiatives must focus
on providing a seamless end-to-end experience. Each digital initiative should be
assessed to determine if it affects customer experience and can be structured to
deliver a positive experience.
Figure 1
Dissecting Digital Customer Experience
Essential Element How to Enable It
GAUGE IMPACT
ON CUSTOMER
Assess how the digital initiative would impact customers by answering the following questions:
• Would it impact all customers or just a particular customer segment?
• What would the impact be?
• Which part of the customer engagement process would be affected (pre-sale/sale/post-sale/
service)?
UNDERSTAND CUSTOMER
NEEDS
Gather insights on customer needs that could potentially be addressed through the
digital initiative:
• Do customers desire a particular functionality that could be incorporated into the digital
initiative design?
• Are there any unmet customer needs that could be addressed by designing new
products/services?
• Gather insights through discussions with customers, industry research and observation.
IDENTIFY CUSTOMER
PAIN POINTS
Understand the full customer experience through customer journey mapping, being sure
to identify:
• Pain areas or improvements that can be addressed through the digital initiative.
• Opportunities to introduce digitization in order to streamline the customer journey.
DESIGN THE
CUSTOMER EXPERIENCE
Envision how the digital initiative would impact customer experience by:
• Designing a customer experience blueprint to understand how the initiative would
impact customers.
• Prototyping and testing the initiative in real-life environments with a pilot group of customers
in order to identify failure modes and fix them prior to launch.

Truly digital organizations enable customers to participate throughout the
digital journey and play a critical role in crafting their own experience. The
goal is customer autonomy, with businesses making key assets and capabilities
available, and customers picking and choosing among these offerings to design
an experience that suits their needs. (For more on this topic, please read our
Cognizanti article “Making Digital Real and Rewarding.”8
)
Figure 1 (previous page) depicts customer experience elements that need to be
considered for every digital initiative.
Emphasize Business Processes
A digital front-end cannot be effective when it has sub-optimal processes at
its core. A successful digital initiative must have an efficient, optimized set of
business processes at its foundation. Otherwise, the initiatives will operate in
silos as technology-only projects, leading to further inefficiencies and customer
and employee dissatisfaction.
Let’s look at a few examples to illustrate this point. A financial services organiza-
tion in Asia-Pacific with which we worked launched an online channel that enabled
customers to enroll for services by signing up and submitting documents online.
However, at the back end, employees printed physical copies of these forms and
manually keyed the information into multiple applications – clearly an inefficient,
error-prone approach.
In another case, we were approached by an energy utility in Asia that had built
an online portal to enable customers to view usage data and request additional
services. However, the timelines and service level agreements specified in
the portal were very different from the actual service
level agreements that governed internal processes.
This resulted in a mismatch between customer expecta-
tions and business delivery capabilities, leading to low
customer satisfaction.
All digital initiatives are associated with business
processes in some way. Digital initiatives change or even
eliminate existing processes or create the need to design
new processes. Digital initiatives also provide an oppor-
tunity to reengineer existing processes and make them
more efficient. Hence, it is critical to study the impact
of digital on business processes and redesign them to
ensure seamless delivery. It is also imperative to define
performance indicators that help measure the success of
digital initiatives.
Figure 2 (next page) outlines the key aspects of business
process design that are associated with digital initiatives.
Customer experience in today’s digital era is not
limited to digital channels but cuts across online and
physical channels, as well.
It is critical to study the
impact of digital on business
processes and redesign them
to ensure seamless delivery.

Fine-Tune the Operating Model
Digital initiatives typically necessitate a review of the business operating model,
as there may be a need to consolidate work, merge departments, upskill people,
increase or reduce capacity, etc. If these considerations are not assessed and
planned, the digital initiative will not achieve its goals.
Examples abound of businesses that fail to evolve their operating model to
accommodate digital change. Consider this hypothetical case: A consumer
goods organization invests heavily in analytics technologies and creates a team
to mine data and generate insights. The analytics team generates reports and
shares them with the marketing, sales and operations functions. However, the
Figure 2
Optimizing Business Process Reformation Activities
IDENTIFY AFFECTED
PROCESSES
Identify all business processes that would be affected by the digital initiative:
• Which functions would this digital initiative affect?
• Which processes within these functions would undergo change?
• What are the upstream and downstream processes that would need corresponding change?
DETERMINE THE TYPE
OF CHANGE REQUIRED
Identify the kind of change required in the affected processes:
• Which processes would need to be reengineered?
• Are there any new processes that need to be designed?
• Do any processes need to be discontinued in light of the digital change?
REENGINEER EXISTING
PROCESSES
Reengineer processes to align them with the digital initiative, while also making them
more efficient:
• Define the existing process.
• Perform value stream mapping to identify improvement areas.
• Identify scope for process automation.
• Reengineer the existing process by addressing improvement areas, eliminating non-value-
added steps and automating manual steps.
• Design the future-state process to tie in with the digital strategy.
DESIGN NEW PROCESSES
Design new processes to support the digital strategy/initiative:
• Identify new functionality that the digital initiative could deliver.
• Design processes to support the new functionality.
• Define how the new process would align with existing adjacent processes to ensure
seamless functionality.
DIGITIZE PROCESSES
Identify automation opportunities within existing and new processes:
• Identify non-core, formula-driven activities/steps in existing processes and define scope for
robotic process automation.
• Build automated components into any new processes being designed.
DESIGN HIGHLY
MANEUVERABLE AND AGILE
COMPONENTS OR SUB-
PROCESSES INTO PROCESSES
Design agile processes that can adapt based on context:
• Design processes such that the entire process or a few components/sub-processes are
agile and can change based on customer preferences, real-time information and other
environmental factors.

reports are barely used because market-facing personnel feel the analytics team
is too far removed from customers to provide practical and relevant insights.
This problem could have been addressed by designing a collaborative work envi-
ronment or dissolving silos between teams.
In another case, a financial services firm introduced a hotline to provide customer
service for multiple products and services instead of customers having to toggle
between different customer care numbers. An IVR system routed calls based on
the product or service in question. However, the customer care teams continued to
operate as they always had, as part of different business units, based in different
locations, without a seamless connection. Hence, if customers chose an incorrect
option in the IVR or had queries across multiple products, they were rerouted
multiple times. Customers complained that no team or individual seemed to have
Figure 3
Assessing Operating Model Change
IDENTIFY IMPACT ON THE
CURRENT OPERATING
MODEL
Assess how the digital initiative would affect the current operating model in terms of:
• Teams/functions that would be impacted.
• The current organizational structure, keeping in mind the need for enhanced collaboration/
interaction between functions.
• How new products/services created by the digital initiative would require a redesign of teams
and functions.
DEFINE TARGET OPERATING
MODEL AND DESIGN FOR
COLLABORATION
Define the target operating model in terms of:
• Changes in organizational structure.
• Changes to existing functions and creation of new functions.
• Interaction model between functions (including not only delivery/sales/marketing but also
adjacent HR/legal/compliance/finance functions).
• Interaction model across various channels and the teams supporting those channels.
• Potential to create a shared service model for digital processes.
DEVELOP A CHANGE AND
PROGRAM MANAGEMENT
APPROACH
Ensure employee involvement, buy-in and participation in the digital initiative:
• Ensure leadership commitment to the initiative.
• Encourage leaders to communicate the business case and the need to make this change.
• Create change agents to help coordinate and lead the digital effort.
• Encourage participation and ideas from employees.
• Establish a robust program management strategy to ensure seamless execution of the initiative.
DETERMINE CAPACITY
REQUIREMENTS
Identify capacity requirements to support the target operating model:
• Would the digital initiative result in automation and productivity improvements, leading to
capacity creation?
• Would the digital initiative result in introduction of new processes/services, leading to capacity
requirements?
DEFINE SKILLSET
REQUIREMENTS
Identify skillsets required of teams to support new functionality/processes:
• Is it possible to upskill/cross-skill existing resources?
• Does the initiative require entirely new skillsets?
• If new skillsets are required, would it be optimal to hire or contract resources?
• Is sourcing or offshoring a more cost-effective option?
DEFINE SUCCESS CRITERIA
Define success criteria for the digital initiative in terms of:
• What is/are the key metrics that would establish the success of the digital initiative?
• How do these metrics align with organizational/strategic goals?
• Identify and gather appropriate data points to build a business case for resource and cost
allocation for the digital initiative.

end-to-end information. All this could have been avoided
through an operating model that ensured cross-training
or led to the creation of shared services. 9
Yet another example is a travel services company that
decided to increase its online sales by making existing
products and services available on the Web. However,
managers consistently failed to meet their online
sales targets because the products were not designed
to be sold online. Neither the systems nor the products
delivered on the advantages of the digital channel. Fur-
thermore, the digital shift faced huge internal resistance,
as revenues were still very much dependent on offline
travel agents as the primary distribution channel. Those
agents and the business heads internally saw online as
a competing sales channel that would cannibalize the
company’s main source of income.
Management attempted to fix the situation by setting up online as a profit
center (measured mainly by sales), thinking this would better incent the
e-commerce team while not impacting the offline business heads. Unfortunate-
ly, this governance setup made it impossible for any digital change in the overall
business to happen.10
When digital initiatives are conducted in silos, without corresponding changes
in the business operating model, they cannot achieve their potential, either in
terms of improving the customer experience or in realizing a significant return
on investment.
To ensure the success of digital initiatives, organizations must proactively
change/evolve their operating models. Figure 3 (previous page) outlines key
operating model considerations.
Looking Forward
A digital initiative that ventures beyond the technology lens and focuses on
customer experience, business processes and operating models will realize far
greater success. Considering the importance of digital initiatives to the survival
and growth of the organization, it is imperative to consider all factors and design
a future state that exceeds stakeholder expectations.
Organizations should consider the following factors when embarking on their
digital journey:
• View each digital initiative not as a mere technology intervention, but as a
holistic change that cuts across the entire value chain and creates new value
propositions.
• Regard end users as partners on the digital journey and involve them in ideation,
evaluation, design and delivery.
• Design versatile processes that can adapt and reinvent as customer preferences
and business models change.
• Design operating models that enable cross-functional interaction to provide the
best customer experience and value.
• Create an open, innovative environment by cross-skilling and upskilling employees
and enable them to own and drive digital transformation.
When digital initiatives are
conducted in silos, without
corresponding changes in the
business operating model, they
cannot achieve their potential,
either in terms of improving
the customer experience or in
realizing significant ROI.

Footnotes
1 Brian Solis, “Digital Transformation and the Race Against Digital Darwinism,” Brian
Solis blog, September 2014, http://www.briansolis.com/tag/digital-darwinism/.
2 “IDC 50th Anniversary: Transformation Everywhere,” IDC, https://www.idc.com/
IDC_50anniversary/download/IDC50thAnniversary.pdf.
3 “Gartner, IDC and Forrester on the Future of Digital Transformation,” What’s the
Big Data, Dec. 27, 2015, https://whatsthebigdata.com/2015/12/27/gartner-idc-and-
forrester-on-the-future-of-digital-transformation/.
4 Gil Press, “Six Predictions about the Future of Digital Transformation,” Forbes, Dec.
6, 2015, http://www.forbes.com/sites/gilpress/2015/12/06/6-predictions-about-the-
future-of-digital-transformation/#511a9f7125b4.
5 Rob Asen, Ted Shelton and Burkhard Blechschmidt, “Being Digital: Making Digital
Real and Rewarding,” Cognizanti, Vol. 9, Issue 1, 2016, https://www.cognizant.com/
content/dam/Cognizant_Dotcom/whitepapers/being-digital-making-digital-real-
and-rewarding-cognizanti12-codex2094.pdf.
6 “2011 Customer Experience Impact Report,” Oracle Corp., 2012, http://www.oracle.
com/us/products/applications/cust-exp-impact-report-epss-1560493.pdf.
7 “New Oracle Global Research Study Finds that Brands Could Lose up to 20%
of Revenue Due to Poor Customer Experiences, Yet Many Struggle to Develop
Successful Strategies,” Oracle Corp., Feb. 4, 2013, http://www.oracle.com/us/
corporate/press/1903222.
8 Rob Asen, Ted Shelton and Burkhard Blechschmidt, “Being Digital: Making Digital
Real and Rewarding,” Cognizanti, Vol. 9, Issue 1, 2016, https://www.cognizant.com/
content/dam/Cognizant_Dotcom/whitepapers/being-digital-making-digital-real-
and-rewarding-cognizanti12-codex2094.pdf.
9 Personal experience of the author as a customer of the bank, followed by discus-
sions with bank employees.
10 Jan Sedlacek, “Why Kuoni Failed,” Jan Sedlacek blog, June 11, 2015, http://jansed-
lacek.net/kuoni-failed-the-digital-transformation/.
About the Author
Uma Kasoji is a Director within Cognizant Business Consulting’s Strategy and
Transformation practice. She brings more than 15 years of experience in business
transformation and operations consulting across a variety of domains and
geographies. Uma has helped various organizations in defining and executing
strategic change and has led stand-alone projects to deliver cost optimization,
risk reduction and efficiency improvements across a variety of business areas.
She is a Six Sigma Master Black Belt, has expertise in Lean and received an MBA
from the Indian Institute of Management. Uma can be reached at Uma.Kasoji@
cognizant.com | https://in.linkedin.com/in/umakasoji.

World Headquarters
500 Frank W. Burr Blvd.
Teaneck, NJ 07666 USA
Phone: +1 201 801 0233
Fax: +1 201 801 0243
Toll Free: +1 888 937 3277
inquiry@cognizant.com
European Headquarters
1 Kingdom Street
Paddington Central
London W2 6BD
Phone: +44 (0) 207 297 7600
Fax: +44 (0) 207 121 0102
infouk@cognizant.com
India Operations Headquarters
#5/535, Old Mahabalipuram Road
Okkiyam Pettai, Thoraipakkam
Chennai, 600 096 India
Phone: +91 (0) 44 4209 6000
Fax: +91 (0) 44 4209 6060
inquiryindia@cognizant.com
© Copyright 2016, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to
change without notice. All other trademarks mentioned herein are the property of their respective owners.
Codex 2129
About Cognizant Business
Consulting
With over 5,500 consultants worldwide, Cognizant Business
Consulting offers high-value digital business and IT consulting
services that improve business performance and operational
productivity while lowering operational costs. Clients leverage
our deep industry experience, strategy and transformation ca-
pabilities, and analytical insights to help improve productivity,
drive business transformation and increase shareholder value
across the enterprise. To learn more, please visit www.cognizant.
com/consulting or e-mail us at inquiry@cognizant.com.
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information
technology, consulting, and business process services, dedicated
to helping the world’s leading companies build stronger busi-
nesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant
combines a passion for client satisfaction, technology innova-
tion, deep industry and business process expertise, and a global,
collaborative workforce that embodies the future of work. With
over 100 development and delivery centers worldwide and ap-
proximately 233,000 employees as of March 31, 2016, Cogni-
zant is a member of the NASDAQ-100, the S&P 500, the Forbes
Global 2000, and the Fortune 500 and is ranked among the
top performing and fastest growing companies in the world.
Visit us online at www.cognizant.com or follow us on Twitter:
Cognizant.

Getting Digital Right

More Related Content

What's hot

Viewers also liked

Similar to Getting Digital Right

More from Cognizant

Getting Digital Right