A global financial services firm we worked with really seemed to get the digital message. They hired a chief digital officer who led many locally successful projects to improve the customer experience. These included making it easier to move from in-person to online for certain tasks, plus targeted offers based on customer data. They felt confident they were creating great customer value. But there was a problem. Those local innovations ended up adding more complexity to the existing fragmented business processes, systems, and data. Although the customer experience often improved — and in some cases, revenue increased — the rise in the cost-to-serve eclipsed the gains and added other risks like cybersecurity and system crashes.
Is Your Company Seizing Its Digital Value?
The ways in which companies can create and capture value have changed profoundly. Most aren’t keeping up.
October 21, 2022
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Summary.
In the digital era, how firms create and capture value has changed profoundly. But with digital transformation, many firms are leaving substantial value on the table, getting caught up in “doing” digital transformation rather than staying focused on how they will create and capture value with digital. To do this, first companies need to understand the three different types of digital value: value from customers (cross-selling, increased loyalty, great customer experience); value from operations (increased efficiency, modularity and reuse of components, automating processes); and value from ecosystems (leveraging partners for both access to more customers and range of products and services). With these types of value in mind, firms can then take action to create digital value by: identifying domain opportunities; building mutually-reinforcing capabilities; tracking digital value with a dashboard; recruiting digital partners; and investing in digital savviness of everyone at the firm. Companies that do this will become truly “future ready.”