A new world is taking shape. It’s one dominated by digital engagement, where competitive differentiation is increasingly determined by a business’s ability to embrace software-driven business models. From taxis and travel to banking and retail, the foundation of almost every industry is undergoing profound change and revitalisation. Software has levelled the playing field and disruption is the norm.
Suddenly, companies are being advised to transform themselves digitally or suffer dire consequences. CIOs — and, increasingly, other C-level executives — are given charters to ‘go mobile,’ ‘build apps,’ ‘get in the cloud,’ and ‘use big data.’ Where to start and how to engage others around your aspiration can be a challenge.
What’s different now?
Businesses have always been incorporating emerging technologies to lower costs and increase efficiency. Until recently, the primary application of digital technology has been to support business rather than to actively drive it. IT departments were built to increase the effectiveness of the functions of the existing pillars of the business — sales, marketing, product development, HR, and finance. Software was viewed primarily as a productivity tool rather than as a core component of the business’s DNA.
The convergence of the Internet, mobile devices, and pervasive connectivity has fundamentally changed the business relationship with digital technology. Any business can now engage directly with customers anywhere in real-time through Internet-connected applications and social media — and vice versa. There are now no intermediaries between the company and the customer and it is this two-way engagement that is turning the traditional business world on its head.
Where completeness of application functionality was once the prime technology metric, a continuously evolving user-centric experience is now paramount. As the most direct conduit between a company and its customers, technology must now bear the weight of responsibility for the brand on its shoulders. A company’s product may not be technology, but its brand will be represented, communicated, and judged through technology.
The traditional IT function that has served business effectively for decades is not equipped for these new responsibilities. The answer isn’t to simply enhance IT with new capabilities; it’s to build a new operating model for business that puts technology — specifically software — at the very heart of the business itself.
Every business is in the software and service business
The changes needed to embrace software’s new role in business are transformational, not incremental. Software must now be designed, built, and operated with a primary and critical focus on the business’s customers and their experiences. In other words, every business must also become a software business, regardless of the sector in which it operates.
Launching a website or an app is just the beginning of an ongoing relationship. Customers expect you to keep your sites and apps operating smoothly and securely, 24x7 and will judge your company through their digital experiences, so consider:
- Can they get to the information or functionality quickly and easily?
- Is the user interface simple and intuitive?
- Is the software responsive and free of defects?
- Is it available on all necessary devices and web browsers?
- Does it integrate seamlessly with social media channels?
Put simply, how these questions get answered will determine the success or failure of your brand.
Customer Engagement through Software
A live, Internet-connected application allows a deeper understanding of a customer as an individual because the flow of data is ongoing and bidirectional. Any aspect of the user journey through the software experience can be recorded and analysed to gain insights into user preferences, behaviour, and needs. Each customer is understood as a “market of one,” thus enabling experiences to be individually tailored.
Critically, data gained can be the source of deep insights to inform the wider business across every dimension. The feedback loop is the core mechanism for a completely new kind of customer intimacy — one that gives you the ability to shape your business in close partnership with your customers.
Software’s potential can only be realised by working beyond traditional business functions – sales, marketing, technology, product - and activities. In a real sense, software must be the hub around which all aspects of modern business come together. Any gaps in collaboration around the feedback loop with customers will mean lost engagement opportunities, and may damage the software experience.
Building a modern business with software at the centre
The ability to deliver customer-facing, software-based experiences is an entirely new capability that you may need to build from the ground up. You will need to create software execution competency — a kind of modern software factory — that will enable you to continuously deliver software experiences at scale to your customers. You will need to revisit your priorities and shift your investments. You will need to enable a more efficient and collaborative operating model optimised for both speed and customer value. And you will need to create feedback loops so you can provide your business with a steady flow of actionable insights.
The good news is you don’t have to change all at once; transformation is a messy process and will happen naturally. Your goals are to uncover the clarity that comes from knowing your customers through the software you build, and to create the right environment for continuous improvement, discovery, and experimentation.
Welcome to your new operating environment
If you adopt a simple strategic and technological framework and identify some obvious first steps, this will set a direction that will continue to guide you. The road to the future starts with the creation of the software factory. Software development competency must be deeply rooted in customer intimacy gained through digital feedback loops, applied analytics, and an agile and efficient software development process. The muscle and flexibility this offers can translate customer needs into delivered experience.
Your old system will be pushed to its limits as linear business practices intersect with nonlinear technological change. However, the longer any organisation holds on to old operating models, the harder it will be to make the transition to a truly digital world.
This was adapted from Otto Berkes’ new book Digitally Remastered
Image Credit: Everything Possible / Shutterstock