Once and for all — what are the steps a company must take to master digital experience (DX)?

Despite all of the advice-giving, plotting and planning and hand-wringing over digital transformation, the truth is many companies are still struggling with it.

So sometimes you have to go a bit outlier in your explanations.

Take the oft-repeated advice that investing in technology is crucial for DX. Well, duh. But tweak that advice a bit and suddenly things fall into place for a company.

Cambridge, Mass-based Pegasystems CTO Don Schuerman explained it like this: "Technology is important, but what is key is whether your executives get just how fast new technologies can appear and become disruptive."

Consider Pokémon Go, a mobile game that was released on July 5 and within weeks is seemingly everywhere. A quick look at Wikipedia will give you the rundown of the location-based, augmented reality game. Some tech publications have released primers on how it works and its existential meaning for the industry

So here's Schuerman's DX test: Does your team instantly grasp why Pokémon Go has become so popular so quickly — and can it, if it wanted to, integrate the game into a digital experience? And if it doesn't want to, why?

Okay, so maybe virtual reality isn't your company's particular thing right now.  

But the nuts and bolts of DX success should be — as well as, even more importantly, why you are pursuing it. "At the end of the day digital transformation is just a means to an end, whether that end is an improved customer experience or higher revenues," Schuerman said.

A (Cocky?) Sense of Optimism

At is happens, DX is on a lot of executives' minds and they are feeling pretty cocky about their abilities, according to a study [PDF] sponsored by Pega and conducted by The Economist Intelligence Unit (EIU).

The study surveyed 282 executives from such industries as healthcare, financial services, biotech, pharmaceutical and telecommunications.

More than three-quarters (77 percent) of respondents to the EIU survey "agree strongly" or "somewhat" that digital transformation is their top strategic priority for 2016.

Respondents also agreed that the failure to achieve this goal is poor financial performance.

The report noted that the majority — 69 percent — of executives were highly confident in their digital transformation plans, with 69 percent expecting to achieve their digital goals set for this year.

How Failure Happens

All of which is well and good. But here and there in the report, some of the responses offer hints of how a DX strategy could wind up, if not failing, then not performing as well as expected.  

The survey found that operational objectives, such as process optimization and organizational agility, are more common than employee-focused concerns. For example, only 14 percent of respondents count improved employee engagement among their digital transformation objectives, the report states.

"This suggests that companies may be neglecting the impact digital transformation could have on their employees' working experience, and therefore their productivity and loyalty. This operational focus helps to explain why significantly more respondents expect their organization to invest heavily in big data and analytics (58 percent) this year than in any other digital technology, including mobile computing (36 percent) and software as a service, or SaaS (29 percent)."

Or this:

Only 25 percent of respondents were able to identify "areas where we face strong competitive pressure" as a major influence on their digital transformation priorities. "This suggests that business leaders see digitally driven change as more of an opportunity than a threat."

Not to knock the executives in the survey, but such oversights can become larger than life in a DX strategy.

Accenture Interactive Has Bad News

A separate study commissioned by Accenture Interactive and released last month, Expectations versus Experience: The Good, The Bad, The Opportunity finds that most brands are falling short in delivering digital customer experiences that exceed their customers’ expectations. The study was based on a survey of 702 customer experience decision-makers from companies in 14 countries.

While 52 percent of all respondents think they're ahead of their competitors at providing digital customer experiences, some 67 percent stated they "meet" these expectations (spoiler alert: merely meeting expectations is no longer good enough). And only 7 percent said their company exceeds the expectations of their actual customers.

So are the discrepancies hinted at in the Pega-EUI study to blame here? Well possibly — DX is, if you haven’t understood this by now, an incredibly nuanced discipline. Accenture's study, however, has identified another culprit. According to the report:

The reality is that businesses often think "inside out" and take customer experience initiatives without consulting customers directly. While 81 percent of all respondents believe that it is important to involve customers in customer experience efforts, only 57 percent actually take this "outside-in" perspective. The findings show that many companies fail at measuring what they know they should, too. For example, 90 percent see value in churn metrics, but less than 40 percent capture them.

There were some other reasons as well, according to the Accenture report: They are not taking a comprehensive approach to digital customer experience. They don’t have the right tech skills in house (agile/lean is particularly in short supply). They haven’t learned how to get the most out of their analytics applications — or they don’t have the right analytics application in the first place.

Finally, many of these companies really do think that being middle-of-the-road is okay. That is, they are not horribly bad at digital customer experience but they are not exceptionally good either — and that should be good enough for their customers.

Living Services Comes Next

If you in fact are exceeding your customers' expectations and thus are feeling smug about your company's place in the DX universe right now, stop right now. 

The high performers identified in the Accenture report are able to stay ahead of the competition now. But many are likely to sink when the next wave of customer experience disruption hits, a development that Accenture calls Living Services and it defines as "smart digital services that leverage the Internet of Things (IoT) to wrap around the consumer and respond to them in real-time according to their individual needs and environments."

Examples of this new phase are already here.

A simple one is the way Paypal has plugged itself into a wide number of retailers' sites and their point-of-sales.

A more elaborate one is a notebook by Moleskine designed for Livescribe smartpens and the Livescribe+ app, with each page containing a dot pattern that makes handwritten notes appear in digital form with surprising speed and accuracy. 

"The next wave of digital services will completely transform customer experience as we know it," said Anatoly Roytman, managing director of Accenture Interactive Europe, Africa, Middle East and Latin America.

Businesses will have to become even more digitally savvy in order to take advantage of it, he added.

Which means passing the Pokémon Go test is only the beginning.

Title image "Pokemon Go" (CC BY-SA 2.0) by steevithak