nasscom ilf 2017: how to solve the digital dilemma - nigel fenwick, forrester

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How To Solve The Digital DilemmaNigel Fenwick, Vice President, Principal Analyst

@NigelFenwickFebruary, 2017

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Source: Birds Wallpapers

Predator?

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Or Prey?

Source: Birds Wallpapers

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Source: Starwood Hotels & Resorts

New experiences change our expectations and impact our future value perceptions


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ExperiencesShape expectations

Experiences must deliver desired outcomes to create value

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Experiences continuously evolve …

… causing expectations to rise

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Source: Forrester Research @NigelFenwick

Experience Expectation Perceived Value

The Digital Dilemma

As expectations rise, without changes in experience, perceived value decreases.

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2014 2015 2016 2017 2018 2019 20200%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Predators

Transformers

Dinosaurs

Base: 435 respondents

% of Business Influenced By Digital

Source: The 2016 Guide To Digital Predators, Transformers, And Dinosaurs

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Are Digital Predators Different?

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“Does your firmhave a digital business strategy?”

PredatorTransformerDinosaur

We have a full strategy in place thatdefines how our business will createcustomer value as a digital business

66%24%23%

We have a limited strategy in placethat adds digital elements tothe existing business model

27%53%

57%

No, but we are developinga strategy

2%18%

9%

No, we have no plans todevelop a strategy

4%5%

8%

Base: 435 respondents

Source: Forrester/Odgers Berndtson Q3 2015 Global Digital Business Online Survey &

Predators Create Customer Value With Digital

Predators

Predators

Transformers

Transformers

Dino’s

Dino’s


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Today’s business

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Digital

Today’s business

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15© 2017 Forrester Research, Inc. Reproduction Prohibited Image source: CarAndDriver.com

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https://commons.wikimedia.org/wiki/File:Poser.JPG

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Digital

Bolt-on is nota winning strategy.

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Six Steps To Solve The Digital Dilemma

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Needs Desires

Design Thinking

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We need to design new digital experiences to satisfy desires

Old:inside-out

Newoutside-in

Digital prey Digital predator

Design

Deliver

Satisfy

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The new digital business model extends beyond customer experience

MobileWebAR/VR

AnalyticsAI/MLSensors

CRMIOTDM

IOTAR/VRMobile

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Shape A NewCustomer-Obsessed Culture 1

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The #1 Success Factors Of Predators

New sources of customer value

World class customer experiences

Cus

tom

erO

bses

sed


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Empowered customers expect great experiences along the entire customer journey

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It’s easy to uncover gaps that create sub-standard experiences and outcomes

Journey Experience touch points

Discover

Get Support

Buy

Use

Evaluate

Dig

ital /

Pho

ne /

In p

erso

n

Sys

tem

s of

eng

agem

ent

Mid

dlew

are

Sys

tem

s of

reco

rd

Supporting Technology Stack

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Solving the digital dilemma demands a fundamental shift

in how a firm delivers value & drives revenue

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Source: DuPont Pioneer

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Customer desires evolve

0 16 804021 30 6555

AngstCollege

FamilyCrisis

GandchildrenFreedom

http://orig14.deviantart.net/4fc8/f/2009/220/9/6/the_one_ring_by_todd587.jpg

Image source: todd587.deviantart.com

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Image source: cerzus69.deviantart.com

›Outcomes: What are the best outcomes that will satisfy my customer’s desires?

Identify The Outcomes That Satisfy Desires

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Become Insights Driven

2

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Sensors ↳Data ↳Analytics ↳AI / ML↳Insights ↳Outcomes ↳Perceived $↳Revenue

Emerging Digital Tech Allows Better Outcome Delivery

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Out of 500,000 units, only 2 cars are the same

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Drivers configure services to satisfy their personal desires

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Scale experiences with AI/ML

Real-time analytics and machine learning directed at helping customers satisfy desired outcomes

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Invest In Creating Business Agility 3

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Source: Rebekka Minkoff

Rapid experimentation with high value experiences

Demands a business model engineered to

constantly evolve and plug & play tech

architecture

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Source: The December 2, 2015 “Unleash Your Digital Predator”

Digital businesses shift from linear value chains . . .

. . . to value ecosystems

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CX demands adaptive, secure& scalable infrastructure

Perform

ance monitoring at

every level becomes

essential

Quality (or lack of quality) propagates upward, impacting the customer’s experience.

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Simplify, Simplify, Simplify›10% of business capabilities differentiate*

›90% of business capabilities are common across the industry*

* Approximation based on client engagements. Results vary by company and industry.

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Redesign The Organization From Siloed To Connected 4

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Old siloed business models are too slow and uncoordinated...

...and new senior management roles can only act as temporary change agents

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Digital leaders are business strategists with an extra dose of digital savvy

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Most important skill sets

Entrepreneurial thinking (70%)

Leadership (76%)

Strategic Thinking (79%)1

2

3

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Replace old business silos with dynamic teams

Acc

ount

m

gmt

Des

ign/

CX

Con

sulti

ng

App

dev

& S

I

Infra

stru

ctur

eSiloed model: too slow and uncoordinated

Spe

cial

ized

se

rvic

es

Customers’ want outcomes regardless of silos

Customer segments/

desires

Persona model: clusters of experts focus on outcome delivery

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To change culture, change how people are measured

Source: “The Key Success Factors Of Digital Business Strategy, 2016” Forrester Report

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To change behavior, change how people are measured

Source: “The Key Success Factors Of Digital Business Strategy, 2016” Forrester Report

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48© 2017 Forrester Research, Inc. Reproduction Prohibited Source: “The Key Success Factors Of Digital Business Strategy, 2016” Forrester Report

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Fuel Customer-Led Innovation

5

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Source: Microsoft

Incubate

Keeping up with customer expectations will be a

major driver of tech investment

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Personal Value Ecosystem

What other experiences does the customer have today in their journey to satisfy their desires?

Can we partner / replace?

Design Inside An Experience Ecosystem

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Innovate New Product Experiences Around The Customer Ecosystem

Integrated with customer’s digital life

Updates like a smartphone

Customized inside customer’s app

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Engineer Adaptive Experiences

Integrated with your digital life

Updates like a smartphone Customized

inside your app

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Avoid The Pit Of Doom(deliver outcomes) 6

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›Do the new experiences deliver these outcomes easier, faster?

›Do existing business operations support the smooth delivery of the outcomes?

Design Experiences To Deliver The Outcomes Your Customers Value

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Source: Starwood Hotels & Resorts

Beware of setting expectations beyond operational capabilities


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From Silos to Connected Fuel InnovationDeliverOutcomes

1 23 4

56

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Build the digital DNA to Design experiences

to Deliver outcomes that Satisfy desires.

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forrester.com

Thank you

Nigel FenwickTwitter: @NigelFenwickhttp://bit.ly/nigelblog

nasscom ilf 2017: how to solve the digital dilemma - nigel fenwick, forrester

Leadership & Management