Front Office Digitisation Critical to Customer Experience, Satisfaction and Growth

CUSTOMER EXPERIENCE, satisfaction and engagement is storming the CIO Agenda. Is the customer the CIO’s new boss?

CUSTOMER EXPERIENCE, satisfaction and engagement is storming the CIO Agenda. A study compiled by the IBM Institute for Business Value found that 60% of CIOs are focusing on improving customer relationships and customer experience. With the rise of social media, digital transformation and new business models, is the customer “the CIO’s new boss?”

Customer Experience: The CIO's new boss

PRNewsFoto/IBM – Infographic Customer Experience: The CIO’s New Boss: Customers

The IBM Institute for Business Value study is based on interviews with 4,000 C-Level executives (1,600 CIOs) across multiple geographies and industries. Peter Korsten, global leader, IBM Institute for Business Value said “the study reveals the emerging reality that there is no longer any real distinction between the customer experience and contemporary business strategy. The quality and nature of the front-end experience has become the point of entry to the most valuable information any enterprise can possess — information about its customers, employees, or any other relevant constituent group.”

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Customer Experience, Analytics and the Digitisation of the Front Office

IT has ‘two-speeds’ in modern businesses. Commodity IT or utility IT is slow moving, but reliable within the back office. Digital speed IT is differentiating, disruptive and transformative. It is what performing businesses need to drive their front office capabilities. CIOs understand the pressures and opportunity of customer centricity in a digital social world. IBM’s report highlights that 82% of CIOs are planning investments in front office digitisation.

Customer analytics, social engagement, sentiment analysis, reputation and brand management and digital marketing all play in this space. The CIO Agenda is focusing less on back office IT and more on digital strategy in the front office. The CIO needs to ensure that Big Data analytics and other customer engagement technologies are ready for use by the CMO (Chief Marketing Officer) and other customer engagement functions.

For IT functions to remain relevant they need to respond quickly to this ‘two-speed’ world. 66% of CIOs said that they had their ‘technology basics’ under control. This allows the more advanced to focus on customer experience and engagement through the digitised front office.

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Customer Experience and Cloud Computing

Customer influence continues to rise and over 50% of CxOs said that improving internal and external collaboration and removing communications barriers were key focus areas.Cloud Computing is rising further on the CIO Agenda as CIOs recognise the potential of Cloud platforms to enable smarter customer engagement.

The Immense Power of the Customer

Businesses are recognising the immense power of the customer in a social world and an increasing demand to treat ‘the customer as an individual’. Collaborating with customers and recognising their influence is critical and drives the need for more openness and trust.The power of the customer is being amplified by social media. As much as this is beneficial, there is a undeniable reality that as that power rises, so too do expectations and intolerance to poor service.

The smart business is thinking about customer engagement and collaboration and harnessing the power of the customer in strategic decision making.

Open Innovation and Digital Strategy

The CMO understands the need to overhaul customer engagement, putting responsive and smart digital technology offerings ‘centre stage’. CIOs wrestling with digital strategy and front office digitisation also understand that they need to better employ external innovation.

This is creating exciting new partnerships and market opportunities. It is introducing new (sometimes surprising) participants to established markets. Open Innovation will disrupt established markets and businesses would be well advised to watch out for ‘left-field’ competitors.

Customer Engagement and Social Media Strategy

The CMO is very much at the vanguard of customer engagement and digital strategy. The CIOs focus is shifting from the traditional IT function to the fast-moving world of digital and social. IBM’s report found that ‘lack of a cohesive social media plan’ was a significant impediment to realising that strategy. Mobile, multi-channel engagement and more customer experience management are key areas of focus in this area.

Customer engagement through digital channels remains a key focus for growth. 57% of CEOs anticipate that digital channels will become a primary communication means over the next 5 years. Engaging customers in social business is a major deficiency for many companies and a strong CMO is needed to meet this challenge.

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The Customer in Control

It is hard to argue with the logic that the ‘business that best knows its customer will flourish’. This is timeless business sense, but it is also dangerously incomplete. Customer preferences are fickle and businesses will need to partner and leverage external innovation to keep pace with rapidly moving customer demands. This underpins the need to get ‘digital speed IT’ working in your business – and fast. A 360 degree view of the customer and perfect customer engagement is only truly useful if the business can respond quickly to the opportunity or threat.

Some CxOs are supportive of even greater customer engagement with the creation of Customer Advisory Boards. These go much further than traditional focus groups. Rather than product testing, Customer Advisory Boards would give the customer an influential voice in the formulation of business strategy. More than half of CEOs interviewed said that customers had a major influence on their business strategy. A third of CEOs also worried that their C-Level colleagues were ‘out of touch’ with customers.

About the IBM 2013 Global C-Suite Study

  • IBM conducted its in-person analysis with more than 4,000 C-suite leaders by using a global team of business strategists, consultants, data scientists and statisticians. More information about the IBM Institute for Business Value (IBV) can be found here.
  • Access the full CIO Study findings here
  • Download the IBM IBV app on your Android or iOS tablet.  
  • Join the conversation on Twitter at #CSuiteStudy and #IBM. You can follow the IBM Institute for Business Value on Twitter at @IBMIBV

Further Reading on Customer Experience

By Steve Nimmons

Steve is a Certified European Engineer, Chartered Engineer, Chartered Fellow of the British Computer Society, Fellow of the Institution of Engineering and Technology, Royal Society of Arts, Linnean Society and Society of Antiquaries of Scotland. He is an Electric Circle Patron of the Royal Institution of Great Britain, a Liveryman and Freeman of London and serves on numerous industry panels. He is a member of Chatham House, the Royal United Services Institute and the Chartered Institute of Journalists.

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