A ROADMAP TO DIGITAL BUSINESS TRANSFORMATION
To become Future Ready, a company must transform on two dimensions: customer experience and operational efficiency. Figure 1 describes “traditional” and “transformed” states, and figure 2 illustrates the four pathways for the journey. Moving up the vertical axis increases the customer experience, measured by NPS or similar metrics. Moving right along the horizontal axis improves the efficiency of the company, measured by cost-to-income ratio, net margin, or similar metrics.
Silos and Spaghetti
Most large companies have traditional customer experience and operations, and start in the bottom left quadrant. These companies have built up products and services for many years, resulting in product siloes and a complex landscape of business processes, systems, and data that produce a fragmented and frustrating customer experience. Good company performance typically results from heroics by employees who manage to deliver decent customer experience despite overwhelming odds. For example, we watched the teller in a bank branch work with an elderly customer who wanted to change her address on her six different products. The number of keystrokes was dizzying, and it was astounding that the process took only twenty minutes. Yet throughout this horrendous process the teller chatted engagingly with the customer about the local sports team. Amazing heroics—but not scalable. In our survey, 51% of companies were in the “Siloes and Spaghetti” quadrant. These companies had the worst performance, averaging 5 percent- age points of margin below their industry average.