A lot of organizations pay lip service to soft values like customer experience, risk and collaboration.
But very few projects get the green light entirely on these types of justifications. There are a couple of reasons why.
The most important one is that every organization has hundreds of potential investments they can make with their time and money. Executives would be foolish to not focus their investments in areas with direct payback within a stated time.
The second reason soft benefits often fail to justify investment is that organizations do not have good metrics for what they claim to be impacting.
How do we quantify our current customer experience? What would a significant impact to that experience be? How are we going to measure that? Some organizations do have discipline around defining and collecting these data points. But a vast majority do not.
DX Can Decrease Costs, Boost Revenue
Thousands of good project proposals have been rejected because they have failed to provide a solid justification for the return on investment that they expect.
But digital transformation offers an opportunity to really impact the bottom line. There can be a measurable decrease to costs and increase to revenue.
Before we dive into the details I want to define clearly what I mean by “digital transformation.” This has become a buzzword in the industry in the worst way. Everyone uses it to mean whatever they want it to mean.
When I reference it, I am using a very clear definition:
- Reimagining a business process as digital first/born digital or rethinking service offerings to find ways to deliver them 100 percent digitally, cradle to grave
- This goes beyond simply digitizing paper and automating tasks associated with a business process
Digital transformation is not simply recreating a manual process in a digital environment or even automating that process. It is fundamentally rethinking how we can execute that process differently because it is 100 percent digital. That is very aspirational for 99% of us. But if we think about the goal clearly then we can describe the stages of maturity as we move towards that goal.
4 Stages of DX Maturity
There are four stages of maturity on the way to full-blown digital transformation.
The encouraging news is that there are benefits to be gained each step along the way. You don’t need to jump from level 1 to level 4 to find a good business case.
In fact, I would suggest that you don’t try to leapfrog these steps for your current processes. It may be that you have a new product or service that you can release and support in a born digital environment.
But for legacy stuff it is much better to mature incrementally, taking baby steps, rather than trying to play leap frog. The reason for this is that the impact on the business is too drastic and tends to be rejected. Successful transitions ease the business into an increasingly digital and increasingly automated environment instead of springing it on them whole cloth.
This is slow but has been proved successful by real life organizations who are dealing with legacy processes and infrastructure. One of the reasons the FinTech revolution has attracted so much participation from top talent in the banking and financial services area is that many executives think it would be easier to do away with all of the legacy stuff and start from scratch.
DX Connects the Dots
Digital transformation pulls together capabilities that normally managed separately. Many of the capabilities below have business, tech, and compliance owners. So bringing them together can be a task in itself.
Again you don’t need to jump into this with both feet. You can think about capabilities that naturally support each other and where you are going to get the biggest bang for your buck.
For example, capture is a very mature technological capability but chances are you are not getting all of the value you could from your current capture investment.
Trends in capture have been to move the capture of information as far upstream as possible, in many cases having the customer scan their own documents with a cell phone.
But all of the good capture tools can also grab electronic files like email with attachments or electronic fax. Thinking about your capture ability to span all types of information regardless of channel or form is a big opportunity for getting an ROI on a simple “digital” project.
The ROI in this case comes from moving digitization forward in the process and keeping that information digital. Many organizations have nice looking digital capture set-ups and then process the information as paper during underwriting or adjudication or processing and then finally scan the completed document for long term storage.
We’ve written a lot about proving out the business case for capture and the numbers are very favorable for moving that capability as far up the process as you are able.
Enhancing Document Capture
But we can also think about the intersection of two capabilities. Let’s add Customer Communication Management or Forms Management to Capture.
The example works with either capability. A lot of the trouble we have in auto-recognition during the capture process happens with forms or communications that were designed by our own organization.
There are two simple fixes that can reduce document processing time and increase our pull-through rates. The first is to design the documents to be more capture friendly. There are lots of best practices on the web for that.
The second is to begin using 2D barcodes so that your capture environment doesn’t need to do any of the OCR/ICR work. It simply scans the barcode and inputs the data directly and save a dumb image of the form for workflow and archiving.
Digital Experience Is Actionable
As you move along the maturity process you can focus on any specific capability for digital or you can begin to bundle these together. In either case the impact is to reduce processing times, calls to customer support, and reallocation of head count, etc.
It may be that we can prove a solid justification for digitizing a process in our organization and still not get approved.
But at least it won’t be because we weren’t thinking about the value and impact of the project.
Sometimes there are just more urgent priorities. But the exciting aspect of digital transformation is that for many of the processes that we want to impact there are defined metrics to measure and hard costs that can be reduced.