Experience Engineering by Digital Transformation

Created by Chris Shayan
Oct 19, 2019
13 min read

Table of Contents

  • Preface

  • Brand Architecture

  • Digital Transformation Maturity Model

  • Customer Centricity

  • Digital Transformation Experiences

  • Digital Customer Experience

  • Marketing and Sales in Digital Customer Experience era

  • Taking an API-led approach

  • Software Architecture for Engineering Experience



Preface

I've been very obsess with "experience" and written series of post which I think might be good to read them as well or you can skip the below list:

Brand Architecture

I am not expert on "branding". But in order to build a great experience, you need to have a clear brand architecture. Brand Architecture is a system that organizes brands, products and services to help an audience access and relate to a brand. A successful Brand Architecture enables consumers to form opinions and preferences for an entire family of brands by interacting or learning about only one brand in that family.

Thanks to MSLK for this simple graphic to explain brand chaos instead of an organized brand architecture.

An established Brand Architecture is an important guide for brand extensions, sub-brands and development of new products. It will also provide a road map for Brand Identity development and design, and remind consumers of the value proposition for the entire brand family. It also provides the maximum brand value by fully leveraging both corporate and sub brands. Regardless of your company’s size, effective brand architecture can enable you to (read the detail article on this concept here):

  • Target the needs of specific customer segments

  • Significantly reduce marketing costs

  • Clarify brand positioning, naming, and messaging

  • Increase flexibility for future product and service expansion

  • Ensure clarity and synergy between companies, divisions, products, and services

  • Enhance customer awareness of your offerings

Digital Transformation Maturity Model

Digital Transformation (DT) is one of those terms that means different things to different people and it is one of those overrated and hype terms, anyhow I define it this way:

Digital transformation as the realignment of, or new investment in technology, business models, and processes to create new value for customers and employees and more effectively compete in an ever- changing digital economy and result in a great experience either Customer Experience or Employee Experience.

Back in 2016, I wrote an article on Innovation maturity model which now it is also helping me to build the same model for digital transformation however this time, there is a better maturity model defined for DT. This model was developed to help CIOs, CMOs, CDOs, and key stakeholders and follow the paths of other successful companies. But more so, it’s meant to give a checklist of sorts to guide, justify, validate, and effectively make the case for driving transformation.

This report introduces each of the six stages as a self-contained phase, offering a narrative and a checklist to guide your journey.

1. Business as Usual: Organizations operate with a familiar legacy perspective of customers, processes, metrics, business models, and technology, believing that it remains the solution to digital relevance.

2. Present and Active: Pockets of experimentation are driving digital literacy and creativity, albeit disparately, throughout the organization while aiming to improve and amplify specific touch points and processes.

3. Formalized: Experimentation becomes intentional while executing at more promising and capable levels. Initiatives become bolder, and, as a result, change agents seek executive support for new resources and technology.

4. Strategic: Individual groups recognize the strength in collaboration as their research, work, and shared insights contribute to new strategic roadmaps that plan for digital transformation ownership, efforts, and investments.

5. Converged: A dedicated digital transformation team forms to guide strategy and operations based on business and customer- centric goals. The new infrastructure of the organization takes shape as roles, expertise, models, processes, and systems to support transformation are solidified.

6. Innovative and Adaptive: Digital transformation becomes a way of business as executives and strategists recognize that change is constant. A new ecosystem is established to identify and act upon technology and market trends in pilot and, eventually, at scale.

The emerging technology trends allow us to leverage 8 levers to Digital Transformation (you can read the full report in here):

Operational Improvement (Business Enabler Levers):

  • 1. Process Efficiency

  • 2. Asset Utilization

  • 3. Agility

  • 4. New Business & Service Models

Growth Drivers (Business Driver Levers):

  • 5. Demand Generation

  • 6. Reach & Selection

  • 7. Customer Purchase Process

  • 8. Customer Experience

Customer Centricity

Organizations are engaging customers earlier and more frequently in the digital world in order to build a great experience. Gartner predicts that, by 2020, poor customer experiences will destroy 30% of digital business projects. You must win at every interaction the customer has with your organization.

As organizations strive to become customer centric, Gartner has identified 10 common habits of organizations exercising customer centricity in the age of digital business.

Digital Transformation Experiences

In the Experience Economy, as value creation is dominated by how well Digital Transformation experiences are delivered, the greatest discriminator will be the ease at which an experience (customer, worker or employee, partner/supplier) meets the stakeholders needs, as well as how well it stays adapted to them. To do this, we’ve learned as an industry, requires us to overcome what is called the Engagement Paradox, which observes how there are millions of stakeholders combined that our organizations must address and satisfy, each of which are coming to expect a one-on-one personalized relationship with the experiences that enrich their lives, livelihoods, and businesses.

Mass personalization and one-on-one engagement will therefore increasingly dominate our digital experiences, as will the need for local adaptation and the movement away from one-size-fits-all experiences, devices, and technologies.

Digital Customer Experience

Customer experience or CX is a very broad field that essentially looks at the sum of all experiences and the overall customer lifecycle, digital customer experience overlaps a broad range of activities. The only way to look at it, remembering that the customer doesn’t care about the difference between digital and non-digital, is seeing the digital customer experience or DCX as an end-to-end given as well. It’s the sum of all customer experiences a customer has with your brand, company, services, offering etc. across all possible digital touch-points and micro-interactions.

  • The customer experience of a digital-savvy customer who uses more digital technologies and channels.

  • The customer experience across various digital touch-points.

  • The digital technologies organizations can deploy to enable customer interactions (the front-end) and to improve the customer experience (back-office).

  • The experience regarding digital services and products as such. Smart digital devices that 1) are built by brands and thus influence the perceptions of those brands, 2) come with an entirely different type of experience and 3) offer opportunities to improve customer experiences within the device and/or based on data regarding the usage of the device.

Digital transformation and digital customer experience in most cases go hand in hand. However, we shouldn’t make the mistake to reduce digital transformation to just the digital customer experience. Nevertheless, de facto there is a very strong relationship. More on digital transformation and digital customer experience:

“It’s impossible to have great customer experience without digital transformation in the age of the customer. Most of us think first about the front-end experience when challenged with improving digital customer experience. We naturally gravitate toward the direct human interface: web features and functionality, design, native mobile apps vs mobile web and more. This is the glitz of digital customer experience and there is no relaxing here—your competitors and peers continue to raise the bar”. Ken Calhoon (Forrester) on Forbes.com.

Marketing and Sales in Digital Customer Experience era

Most marketers were not trained to be technologists, analysts, mathematicians or economists. They were trained to be top-of-the-funnel demand generators and brand marketers. However, increasingly they are being forced to make significant sales, marketing, service and commerce solution and platform decisions. The emerging requirements that CMOs (and their chief marketing technology officers) are focused on include:

  • Personalization of digital channels – Deliver relevant messaging to the customer through email, mobile and web

  • Visualizations of customer journeys — Gain new insights on how to engage customers

  • Apply pre-defined models and learning to future campaigns

  • Predictive Analytics (predictive support for customer profile and next best action; attribution and marketing mix support)

CMOs realize that companies with the best data-driven analytics and customer experience design are the ones that are going to win. When we talk about analytics, we mean the companies that have the best algorithms. For example, GE has the analytics (and instrumentation) to figure out wind speed, temperature, vibration, and more, and they can tell you if a wind turbine is going to fail. That is predictive analytics. Companies with the best design are companies like Apple that are all about making it easy for people, how to make user interfaces easy, how to get people to adopt things easily. But when you put these two things together, that’s when you get the “customer engagement” magic. The figure below illustrates one reference architecture for Digital Marketing and Sales.

I noticed that digital integration is often ignored in most discussions. Digital integration (via Micro-services and I insist on RESTful API services) act as the glue that links services, applications and systems together to create compelling customer experiences. APIs help create interfaces between back-end systems and applications. Sharing these interfaces with customers and developers can help bring new digital services to market, open revenue channels and exceed customer expectations. So pay attention to this layer.

Combining architecture innovation and engineering experiences with the business operations and technology platforms and capabilities is the future.

Taking an API-led Approach

When businesses consistently over-deliver on customer, partner, and employee experiences at moments when timely, personalized, and surprisingly delightful experiences are least expected, it could very well be the result of strategic platform and ecosystem thinking.

Airlines, for example, should be anticipating frequent flier personal preferences for in-flight food and entertainment just prior to boarding and plenty of airport facilities, even there is a possibility to offer subscription model for business travelers which is a very good opportunity for MRR (monthly recurring revenue) which transforms airline B2B sales into more building experience rather than selling. The data exists. However, it remains to be seen whether or not there’s an airline capable of digitally aligning its food service, entertainment, airport, marketing, sales, HR and other partners around such a highly personalized just in time air travel experience; one that generates improved customer satisfaction, loyalty, and measurable value for all parties involved.

Today’s always-on, always connected, always-engaged technologies — the Triple-A of real time business — make it possible for your organization to envision, fabricate and iterate new, timely, customer, partner, and employee experiences that simply weren’t possible before. The potential of such moments to tip the competitive landscape in your favor is a clarion call to strategically re-imagine your organization and its various constituencies as members of a digital ecosystem powered by your business as a platform; one that enables the democratization of innovation and the co-creation of value through manifold business models and customer experiences.

Consider how Sears recently declared bankruptcy. Business pundits unanimously pointed their fingers at Amazon. Early on, Amazon envisioned itself as a digital platform. Sears — referred toas “the original Amazon” — saw itself for too long as a retailer. While Amazon leveraged platform-thinking to create new digital moments and revenue across an ecosystem of internal and external stakeholders, Sears (like many other legacy retailers) spent much of its digital energy trying to strike a balance between its online and physical shopping experiences. Among other opportunities, it waited too long to re-envision its Kenmore and Craftsman brands as potential home automation platforms. In contrast, Amazon is a now master of that thriving ecosystem; one that routinely leverages a networkable software interface known as the API or application programming interface (or its aws platform) as its means to that end. Whether it’s Amazon, Uber, Lyft or any of the other darlings of the digital age, API technology is invariably under the hood keeping their ecosystems glued together, while also serving as business channel and business model multiplexers.

For example, the full capability of Amazon’s Alexa technology — well-known to end users of the company’s Echo brand of voice-enabled personal assistants — is also available over the Internet as an on-demand service to non-Echo and non- Amazon products. To achieve this, Amazon uses a standard set of APIs to export Alexa’s capability for re-use by an ecosystem of independent software developers, third-party device makers, and, in “eat your own dog food” fashion, even Amazon’s own offerings like Echo and Fire TV. Each of Amazon’s constituencies, including Amazon itself, involves different business channels and, in turn, each of those channels involve different business models that drive value for all parties involved, all enabled by API technology.

When an organization strategically envisions APIs as engines for new products, new business channels, and new business models in ways that ultimately produce new revenue or other measurable value, that organization is said to be monetizing its APIs. In aggregate, the organizations around the world that directly or indirectly monetize their APIs form the basis of what the media often calls the “API economy.” As a subset of the total global economy, the API economy is annually responsible for the exchange of trillions of dollars.

Taken together, an organization, its platform of APIs, the channels of platform availability, and the various constituencies to which those APIs are available (internal developers, external developers, partners, etc.) can form a thriving ecosystem. With APIs getting credit for the ecosystem successes of digitally native companies like Amazon, Google, Netflix, and Uber, it’s not surprising that CEOs and boards are pressuring their teams to follow in their footsteps.

The real hurdle however is to transform an existing business into one where digital platform and ecosystem thinking are the dominant mindsets leading to participation in the API economy. But what does that really entail, and what best practices will get you from here to there?

The API strategy blueprint is very pragmatically broken down into four stages. Each stage represents a collection of critical business and technological fundamentals easily tackled by committed organizations who have the necessary executive backing and long-game patience. Those stages are:

  • Establish digital strategy

  • Align organization and culture

  • Evaluate, build, and deploy supporting technology

  • Engage your ecosystem

Software Architecture for Engineering Experience

Data is the enterprise’s most valuable, untapped resource. According to McKinsey, “Companies that create exceptional customer experiences can set themselves apart from their competitors armed with advanced analytics, customer experience leaders achieve revenue gains of 5 to 10 percent and reduce costs by 15 to 25 percent.”

Access to data — particularly customer data — is critical for companies looking to transform customer experience; they need to be able to understand who their customers are, their customers’ needs, and how customers interact with the company in order to create positive experiences and stand apart from the competition.

This is why organizations start initiatives to create a 360-degree customer view (“customer 360”) data layer that acts as both a common dictionary and source of truth about every customer interaction, at every touchpoint. The goal of a customer 360 is to provide an accurate, timely, and complete view of their customers so that an organization’s stakeholders (i.e. employees, partners, customers, and systems) have the information they need to inform key decisions. But merely having the data isn’t enough; leading companies go a step further and automatically trigger actions and business processes based on that customer information.

Fewer than 10% of companies actually have customer 360 views, because they can be difficult to set up. Challenges arise because of the large number of fragmented systems. In addition, the frequency and speed of change in those systems make the customer data time-consuming to transform, process, manage, secure, and access. When enterprises begin to construct their data apparatus, they often imagine a data warehouse or a data lake from which they can draw insights about their customers and value chain. However, trying to extract actionable insights out of data housed in a static data warehouse will ultimately be doomed because it is impossible to meet everyone’s business needs with a single system.

A customer 360 should be thought of as a holistic system of systems, rather than a big pool of data that is extracted across from various systems to data warehouse. APIs can be used to group data in domains across systems (e.g. location, channel preferences) and used in various ways, such as combining data across two systems to understand how a customer moves across channels. This allows the business to shift their thinking from “what data do I have” to “what can I do with it.”

In today’s world, APIs (Micro-services and I insist on RESTful API services and by API I mean RESTful service) are used to abstract the complexity of systems of records, to provide secure connectivity to the end systems, and to accomplish business goals such as creating a unified view of a customer. But APIs alone cannot accomplish all integration use cases.

API-led (a RESTful service) connectivity is an approach that defines methods for connecting your assets using reusable API building blocks. The approach includes three distinct layers which contain reusable APIs on the system, process and experience-levels (source Mule soft).

1) System APIs (where innovation and digital products happen) expose data across business applications or data stores, such as SaaS, CRM, or legacy databases. Exposing this data through APIs enables the shared consumption of data throughout the enterprise.

2) Process APIs (where agility and new value happen) consume and orchestrate data exposed by System APIs, and represent common business processes that interact with and shape data. They exist independently of the source systems from which that data originates as well as the target channels through which that data is delivered. In this scenario, different process APIs can be used for multiple purposes including:

  • Validating with master data (e.g. who is the customer)

  • Querying data: e.g., grabbing aggregates, roll up data across multiple sources (data from those sources made available via system APIs per source). Multiple process APIs can be used in a customer 360 scenario to pull different views appropriately for each consumer.

  • Executing actions: Factors that affect change such as:

- Triggering an action by one system to another system to move along a process,

- Migrating customer data (which may also be transformed along the way) from one business application to a new target (e.g. another business application or a data store) that has been named the system of record for a domain,

- Transforming data to align to central standards (i.e. for data governance).

The process API becomes a system of systems — comprised of a customer data layer and customer engagement hub — to abstract data from source systems, and validate, link, enrich, transform it, as well as apply business logic, and orchestrate business processes.

3) Experience APIs (decentralized access to core assets) transform data and services so that they can be easily consumed by its intended audience, all from a common data source. Experience APIs can filter certain data out for different consumers and/or extend different presentation formats, which vary by the consuming device or channel.

An eCommerce simple example of APIs: