IDC TECHNOLOGY SPOTLIGHT

Sponsored by: DXC Technology

Digitally Transforming the Customer Experience January 2019

Written by: Alan Webber

Introduction Today's marketplace is hyper-competitive. Brand after brand after brand compete for attention, hoping once they claim it, they can encourage the person or company paying attention into being a customer. But unfortunately for many companies, if they can capture the attention of the customer, it is often one and done. After the sale they are not able to build that long-term relationship with the customer that results in the customer returning time and time again. And the reason they are not able to build that long-term relationship with the customer? Because the customer had a poor experience. As products become less of a key to brand differentiation, the experience a customer receives from the first interaction to the last becomes more important. And the customer experience isn't just the responsibility of a single department or office but stretches across the totality of the customer journey and therefore the company. To remain competitive in this type of hyper-market, organizations need to create compelling integrated customer experiences that not only reduce the friction between the company and the customer over the lifetime of the relationship, but that continue to evolve with the customer over time. This Technology Spotlight discusses the challenge faced by organizations in digitally transforming the customer experience they provide through technologies, services, and organizational change.

Today's Experiences Don't Meet Digitally Transformed Customer Expectations Everyone has a less than stellar customer experience story to tell. They range from the inability to complete a transaction online to refusal to meet a guarantee or brand promise to failing to clearly communicate with the customer to an employee who doesn't have the necessary information and more. The result of a poor customer experience is often the same – customers have a lot of options to choose from and they take their business somewhere else, where perhaps they receive a bit better customer experience. A customer experience comes down to the ability of a company to meet the needs, desires, and expectations of the customer. To meet the needs and expectations of a customer, a company needs a combination of strategy, business

This Technology Spotlight discusses the challenge faced by organizations in improving their customer experience efforts in a hyper-competitive market, and why improvements in customer-facing strategy and business processes backed by technology is necessary to maintain parity with the customer.

WHAT’S IMPORTANT Customers are making more purchase choices based on their experience with a brand, including their interactions with employees, systems, and processes rather than with just the product itself. It’s critical for companies to provide a differentiated experience, which requires an integrated solution of strategy, culture, business processes, and technology.

AT A GLANCE

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processes, technology, and corporate culture that focuses on understanding the needs and wants of a customer within the context of the product or service being provided. Too often companies have a hard a hard time meeting those expectations because the company lacks insight and understanding about the customer, portrays a lack of caring about the customer in the how the customer is treated, and fails to respond to the requests and efforts of the customer. Why are experiences companies provide not up to customers' expectations? There can be many issues from poor handoffs between business processes to technology glitches or mistakes to cultural issues, or other problems. Most of these, when looked at from a customer perspective, can be grouped into three broad areas — a lack of insight about the customer on behalf of the company, a perceived lack of caring, and a lack of responsiveness.

» Lack of insight about the customer. One of the biggest issues is that companies don't understand what customers want and why. The company gathers information about customers, but too often it is limited to just the basic information that is required to complete the transaction. When additional information about the customer is gathered, it is often not combined with other information about the customer along with higher level information about the different aspects of the target market that the customer belongs to provide a more complete view. The result is that the company has little real and usable insight into the customer, their needs, and their preferences.

» Lack of caring from the customer's perspective. The second category is a perceived lack of caring by the company. This is often the result of the lack of information and insight about the customer that comes across as a lack of understanding or caring. Or it could just be a sales person or a customer service agent who, for whatever reason, must work within company policies and processes on a request or situation that is outside what those processes or policies were intended to handle. This often comes across to the customer as a lack of caring or understanding.

» Lack of appropriate response to the customer by the company. Lastly, the other general category of customer experience issues from a customer's perspective is a lack of responsiveness on behalf of the company. The reasons for this range from something as simple as a lost email to more complicated issues such as a gap in business processes where the request gets lost, more human and employee issues like not understanding what the request from the customer was, and not being able to address the customer's request and ignoring it. The result, again from the customer's perspective is that the company is not responsive and therefore undeserving of their business.

Though companies believe they are providing a good or better customer experience, the perception of the customers is that they aren't. So, what can companies do to build a perception with their customers that they are focused on the experience they receive? They can optimize the customer-facing strategies, business processes, and technologies to have more insight about the customer, to demonstrate a higher level of care and understanding, and to be more responsive to the customer.

Control has Shifted to the Digitally Transformed Customer Control over the customer engagement is shifting to the customer. Not long ago, if a customer wanted to purchase an item, they had to go to a store when the store was open. No longer the case, since a customer can go online and find the item, check the reviews, find the lowest cost automatically, purchase it, and have it delivered to their doorstep in a couple of hours or a couple of days. More than any other time in history, the customer has more information about the product, the vendor, and the marketplace, and exerts more control over the interaction. Most companies have been slow to adapt to this new world. It isn't enough to throw up a website, purchase an ecommerce capability, and buy a few ads on a social media channel. Meeting the customer where they are at requires a clear understanding of how the world has shifted. Some of the factors affecting the awareness of customer control include:

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» Be where your customers are. Where there were once only one or two channels to engage customers with, now there are multiple channels — and multiple variations of multiple channels. And customers expect companies to be on the channels that the customer prefers. Opening new channels for customers requires investments in time, resources, and people. Yet this is where their customers are, and where their customers want the company to be. It becomes a cost-benefit analysis for the customer: if one company is not on the channel they want, do they switch channels, or to another company that is?

» Don't waste time. Customers and consumers are oversubscribed. Their days are filled with more tasks than they can get done in the allotted time, and more are getting added. Time has become a very valuable and non-renewable resource for customers. It falls on companies to realize this and architect customer experiences and customer engagements that meet the needs and requirements of the customer while being as efficient as possible. This means reducing unnecessary steps, redundancies, and delays. If not, the customer may choose to go somewhere else.

» Customer experience is about people. In the end, whether B2B or B2C, the customer on the other end of the interaction is a person with expectations on how they should be treated. Some of these expectations are going to be appropriate and others not. The customer comes into the relationship with several factors that affect how they perceive interactions with the company, but it’s up to the company to employ strategies, business processes, and technologies that acknowledge the person on the other end.

Optimizing to Keep Pace with Your Customers For companies to keep pace with where consumers and customers are going today, companies need to rethink what the customer relationship is and how to optimize their customer-facing strategies, business processes, and technologies across the stages of the customer journey to change the interaction with a customer from a transaction into a relationship. To accomplish this, companies need to consider the following:

» Eliminate barriers. A constant refrain from management consultants is the elimination of internal corporate silos to improve organizational efficiency. However, when it comes to customers and the customer experience, it isn’t about internal efficiency as much as it is about removing internal barriers that impede the customer progressing along the customer journey. These barriers can be business policies or processes that keep an employee from effectively assisting a customer. They can be a corporate unwillingness to invest in the channels where their customers already are. To effectively do this requires an organization to take a hard look at how the customer experience journey looks from the customer’s perspective and eliminate those internal barriers that become barriers for a customer.

» Remain agile. Tomorrow’s customers will be different from today’s. They will have different wants and desires. They will have different channel preferences, and they will have different expectations about what engagement on those channels will look like. They will have different ideas and concepts about what customer support and service is like, where it happens, and what the outcome of that support is. The company that will be successful in providing a differentiated customer experience will pay attention to how their customer segments are shifting today and where they will likely be tomorrow, and then adjust their customer-facing strategies for where the customer is and where they will be, not where they currently are.

» Data is the currency of the experience. The key to providing a good experience for a customer is understanding the customer — and understanding only comes through data. Companies collect immense amounts of data bout their

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customers and potential customers, yet only a small portion of it is used to provide a personalized and empathetic customer experience. Too often it is held in disparate databases and systems that are not integrated across the enterprise and support a positive experience. Organizations need to rationalize their different databases and systems that hold customer data into an integrated customer data platform and marry this with externally sourced data about the customer and their cohort to create a truly personalized experience.

» Technology as an enabler. Technology has always been a key component of the customer experience. As consumers and customers dive deeper into the technology pool, it will only become more and more important that companies adopt technologies that engage and support the customer experience. This includes those tools and technologies that customers directly interact with, such as chatbots or web pages. Also, those technologies that employees use in their direct engagement with customers from customer relationship management systems to email outreach, and those systems that seem removed from the customer interaction but yet impact the customer experience, such as finance and billing systems.

Considering DXC Customer experience has transformed from merely being a nice -to-have to a competitive differentiator in an increasingly competitive set of markets. But to transform how a company provides a differentiated experience requires an integrated solution that includes strategy, business processes, and technology. DXC is an end-to-end IT services firm that specializes in delivering solutions that digitally transform organizations including the experience that end-user companies provide to their customers. Specific to improving the customer experience, DXC's solutions generally fall into two BPS services areas:

» Customer Experience efforts. This area within DXC focuses on transforming the ways in which an organization interacts and engages with customers through best-in-class business practices, improving business processes, applying appropriate and leading technologies, and improving the capabilities of the organizational workforce.

» Agile Process Automation efforts. Technology innovation has provided organizations with the ability to intelligently automate many business processes. Through cloud and robotic process automation, backed by artificial intelligence, DXC can help companies reduce business disruptions and process breakdowns, diminish the number of human errors, and enhance how the organization engages with the customer.

Specific solutions that DXC offers for organizations looking to digitally transform their customer experience include:

» Consulting Services. With the fast-changing nature of technology and an ever-shifting market, it is difficult for companies maintain their current base while making the necessary changes, including improving the customer experience to remain competitive in the future. That is why those companies that are successful in making this change generally have another firm with experience in helping organizations become more digital standing next to them. DXC consulting services helps companies understand the bigger picture of digital transformation of which the customer experience is a component, creating a foundation for a successful digital transformation, the pitfalls in making the change, and how to digitally enable themselves without killing the business.

» CX Transformation Services. DXC Transformation Services focuses on understanding the needs of the end customer, defining what that experience needs to look like to meet the needs of the business, the employee, and the customer, and then creating and supporting the implementation of strategies and technologies that accomplish that outcome. This includes assessing changes that will provide rapid improvements and give the organization a

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foundation of success to build on, maturity assessments that benchmark against best in class customer operations, and automation assessments that identify ways that customer interactions can be automated resulting in an improved customer experience and reduced costs.

» Contact Center Transformation. Contact centers are often one of the primary connection and engagement points between an organization and a customer. They can also be one of the biggest problem areas between the organization and the customer because of agent attrition, lack of product knowledge, poor integration of data from multiple sources, the inability to solve the customer issue, and more. DXC's Contact Center Transformation solution focuses on digitally transforming the call center and optimizing both the employee and the customer experience. This includes advising clients on best-in-class strategies, assessing and optimizing contact center operations globally, implementing solutions that integrate digital, social, and mobile channels, and the ability to deliver cutting edge technology via the cloud and Software-as-a-Service models.

» CX Digital Agent Services. It is critical to meet your customers where they are, and sometimes it is better for a customer to be able to directly interact with an organization through a digital agent, chatbot, or other self-service channel that can provide the personalized experience that customers expect. DXC can provide a full suite of customer-facing intelligent digital agents that are integrated with organizational systems that support multi-channel customer self-service.

» UX/UI Design Services. Providing a good experience first requires designing a good experience. And since most experiences now take place through a digital device or application, that means designing a user-centered interface and/or experience that supports customers in accomplishing their goals and business value for the organization. DXC supports these efforts through their experience design capabilities including uncovering customer needs and requirement, creating implementable experience strategies, conducting visualization workshops, and crafting UX/UI experience designs that empower users and creates value for the organization.

Challenges The challenges that the industry currently faces in the expanding customer experience and customer support market include:

» Who owns the customer experience? Customer experience is more of a business strategy than a department or a function or a technology. Because of this it is hard to nail down what role in a company is responsible for customer experience. In some companies it is the CMO, in others it is the head of customer service, and others have chief customer experience officer. That creates the challenge of what is a customer experience solution? In a market where a sales enablement tool, a CRM solution, and a customer intelligence solution can all be labeled customer experience solutions, it becomes more difficult to present the right solution to the right business owner that results in a better customer experience.

» Ever-changing technology landscape. As previously discussed, the increasing rate of change among consumers and customers means that solution providers for the companies that service those customers need to be continually and consistently checking the market, analyzing trends, investing in R&D, and bringing new capabilities to market that will allow the provider’s customers to remain on par with consumers.

» Customer privacy and consent. The recent implementation of the EU General Data Protection Regulation (GDPR) gives consumers more control over what data is collected about them, how that data is maintained, and how that

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data is used. Yet this same data is important to correctly market to a customer, identify the right product for them, and then support them after the sale. GDPR is likely only the initial foray into giving consumers more power over their data, and companies that provide customer experience solutions will have to stay in front of the privacy curve by providing solutions that thread that narrow space between how consumers what their data used and use that same data to provide the experience customer expect.

Conclusion To survive the ever-more competitive market, businesses need to transform the experience they offer to their customers. Yet few have the necessary expertise internally to undertake a transformation effort that focuses on transforming business processes, technologies, and people to provide that differentiated experience customers now expect. And when organizations do try it on their own, the result for both the business and the customer is often less than what was expected or needed. Organizations need to understand that there is nothing simple about providing a good customer experience, and that it requires continuous learning and transformation supported by partners with expertise in renovating the different components of the customer experience.

MESSAGE FROM THE SPONSOR

DXC Helps Organizations Provide a Better Customer Experience and Business Bottom Line. Customer experience (CX) has evolved from being a performance indicator to drive revenue to the key competitive differentiator for a company’s success. In fact, 77.5%* of companies recognize CX as the most important strategic performance measure of their business. (* Dimension Data Global Contact Centre Benchmarking Report 2016) As the world's leading independent, end-to-end IT services company, DXC Technology leads digital transformations and CX Improvement efforts for clients by modernizing and integrating their mainstream IT, and by deploying digital solutions at scale to produce better customer experiences and business outcomes. The company’s technology independence, global talent and extensive partner network enable 6,000 private and public sector clients in 70 countries to thrive on change.

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About the analyst:

Alan Webber, Research Director Digital Strategy & Customer Experience Alan Webber is Research Director for Digital Strategy and Customer Experience. In this role, Alan leads IDC's Worldwide Customer Experience research program as well as supporting IDC's Chief Marketing Officer research efforts. Specific areas of research interest for Alan are the impact that technology changes have on how business and customers engage and interact, the digital transformation of the customer experience, and the impact of algorithms and analytics.

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