Why You Need a Digital Experience Platform: A No-Nonsense Approach to Digital Transformation
Covid-19 certainly was 2020’s dark celebrity. The epidemic triggered revolutionary changes to the ways we worked, studied, and handled daily duties.
Corporate life has been equally affected. Companies might have seemed well-equipped to face the challenges of the new reality. For many years, they had been conducting their digital transformation, launching products, delivering on projects, implementing organizational changes, and investing enormous resources. And yet, in so many cases, the pandemic has painfully exposed the real efficiency of corporate efforts.
A User Perspective of Digital Solutions
How often do we, as digital solution users, get tripped up by frustrating problems in our purchasing or service journeys? These may involve:
- Chaotic shifts among multiple systems designed over many years by various departments and vendors, with no holistic vision in mind.
- A low-quality customer experience resulting from a lack of information structure and GUI coherence, incongruent copy (different names may be used to signify the same things), and unfriendly, overcomplicated language.
- A lack of digitized key processes and reliance on traditional procedures and methodology.
Management’s Perspective of Digital Solutions
In our work with large companies' management boards, we can also see the other side of the coin. Today's corporate digital ecosystem is a result of numerous digital initiatives that are frequently performed at different times and by different departments. Digital transformation may be reduced to implementing one or several IT products in silos to handle the isolated problems of particular departments. As a result:
Digital efforts are doubled, i.e. multiple systems are developed to address very similar issues.
Business becomes dependent on IT. The above systems, usually either purchased or designed by IT, do not account for crucial business needs – especially those of marketing, which should ensure companies' market responsiveness.
Innovation and expansion are sluggish, as this kind of ecosystem is not readily scalable to new markets, countries, or digital initiatives.
Digital Experience Platforms: A New Approach to Digital Transformation
The current situation calls for redefining the very nature of digital transformation. In my view, its nature is far simpler and more down-to-earth than is often believed:
The very essence of the shift is developing a solution that places the customer in the center. We should ensure a consistent and personalized experience at every stage of the customer journey, integrating the entire organization’s systems and efforts into the pursuit of this common goal.
A whole new category of solutions known as Digital Experience Platforms (DXP) has been emerging to address these needs. DXP is a manifestation of a new digital company model, one in which the company and its processes are fully focused on providing the best possible customer experience. DXP has been called the "ERP of the digital world".
DXP may be viewed through a number of lenses:
- Architecture – in this model, DXP is most frequently a combination of CMS (WCM) class systems, e-commerce, marketing automation, and dedicated applications.
- Functionality – This perspective focuses on the stages of the user journey, in particular on the stage of building engagement through valuable content (portal, catalog, video), user onboarding to the destination platform, and the self-service stage.
- Channels – In this approach, DXP is an omnichannel platform supporting all user contact channels: online, call centers, branches, outlets, stores, sales representatives, and partners.
Depending on the industry and individual company specifics, a DXP solution will be a relevant combination of the above dimensions.
Which Companies Need a DXP?
There are a few indications that a company needs a DXP class solution. These include:
- A product or service where communication is difficult, i.e. the customer usually spends a lot of time on digital channels to compare offers.
- A complex user journey that involves the use of multiple contact channels in the purchasing, registration (onboarding), or service process.
- A mass market that justifies and calls for process digitalization and automation.
- Multiple user segments that require the creation of a personalized experience for every user and user group.
- Multiple sales and customer service channels in need of integration.
- Brand and digital marketing play a prominent role in company strategy.
- Numerous digital initiatives exist, e.g. across multiple brands, companies, or countries.
- International expansion.
DXP Signals a Paradigm Change
When the strategic decision of centering on users’ experience (i.e. end users, business partners, employees) is made, three deeply ingrained paradigms must be abandoned:
1. Working in Silos
A large majority of traditional organizations’ structures are silo-based. One silo (i.e. department, division, etc.) is responsible for marketing, another for sales of a particular category of products on a given market, another for customer service, etc. Each of the silos has its own goals and KPIs.
Usually, each of them would have their own digital solutions. Even if an integrating project is implemented, each of the silos has an unwritten right to "veto" the implementation. The project then tends to drag on and on, ending up in a series of unproductive compromises.
2. Focusing on ERP Systems
ERP systems, despite the value they contribute, may easily become a curse for digital transformation. The operational logic of an organization locked in them is necessary for creating user experience in front-end systems. It involves aspects like product information, pricing, order management, logistics, complaints, etc.
Companies find it difficult to share this data because they are reliant on big, external suppliers. They, in turn, are often prisoners to their own monolithic products, which are unfit for the challenges of the digital world. ERP systems must be opened by sharing relevant services and streamlined by lifting selected elements of the business logic out of their area – so that they can serve the entire digital ecosystem.
3. Preserving the Status Quo in the Business Model
Company digitalization is not merely about moving the existing business model to the digital world. Their very approach to doing business frequently needs to be revamped and tailored to the new reality. This can be clearly seen in companies operating on a B2B model, particularly those offering consumer products. Previously, the end user was not directly approachable; thus, the B2B model worked fine. However, today's end user is one click away. The situation presents new development opportunities for B2C and B2B2C models; at the same time, it poses a risk of cannibalizing the existing B2B model which lies at the core of all business operations. The business model needs a rethink.
DXP Implementation Benefits
Breaking away from the above paradigms and launching a new DXP class solution can bring about immense benefits to the company.
1. Increased Conversion, Retention, and Customer Loyalty
Let’s begin with the user, who will be offered a fully consistent experience throughout their entire journey. Irrelevant of whether they are searching for information, considering a purchase, making a transaction, or placing a complaint, users get to operate in an environment they see as familiar and understandable. The probability of a negative user experience declines drastically; according to PWC data, one such experience may turn off a third of all customers. What is more, a satisfied user tends to stay loyal. They are easier to retain and more likely to personally recommend the company.
2. Deeper Understanding of Customer Behavior
DXP tears down silos not only in terms of experience, but also in terms of a given customer group. Usually various teams use various analytical tools to measure an array of user behaviors that depend on the type of application used. DXP can give you complete visibility into user behavior, which allows you to understand the problems occurring in the user journey. In turn, this insight provides a base for effective user experience personalization and increased user loyalty.
3. Lower Digital Transformation Costs
A DXP class solution magnifies the efforts of the entire organization – including its numerous structures – to ensure the best possible user experience. The number of overlapping technological initiatives decreases; as a result, IT may reduce their number of projects and systems. Marketing gets a tool allowing for the relatively independent management of digital activity, thus taking even more of the load off IT's shoulders. Business can have a platform for expanding into new markets. A company can digitize subsequent areas of its activity in the most efficient way, without creating any additional technological silos.
Measuring DXP Implementation Outcomes
Most DXP implementation outcomes are easy to measure:
- Increased conversion and operational savings – A consistent, personalized, and trouble-free user journey always generates higher conversion. This ultimately leads to increased sales and savings due to the self-service user model; thus, pressure on sales and service structures is relieved. These are the most frequently measured company KPIs, which are also easy to compare across time.
- Increased customer satisfaction – Better customer experience translates into customer delight, leading to repeat business and personal recommendations. This can be measured with a number of customer experience metrics (e.g. net promoter score, customer satisfaction score, customer effort score), which can also be compared across time.
- Lower costs of digital transformation – Implementing DXP results in slashing the number of IT systems maintained and developed in the company. Consequently, the total cost of ownership (TCO) for DXP should be compared against the long-term TCO for the replaced applications. The costs of their potential integration with the entire digital ecosystem must also be taken into account, should they remain and continue to generate operational inefficiencies.
The most significant business result of implementing DXP is speeding up the digital transformation, for which the system acts both as a means to an end and an end in itself. Time spent in implementing such shifts has become extremely valuable.
Watch Out for the "DXP" Buzzword
Finally, a word of warning. DXP has become another trendy acronym. This category attracts developers of CMS class (WCM) systems, e-commerce, marketing automation, and CRM who want to extend their competencies into DXP. Still, these are very different solutions. It may happen that one of the DXP platforms will be an ideal match for the company's needs. However, in most cases, DXP will be created as a way of integrating several tools, including previously acquired solutions. Anyway, who would do digital transformation from scratch?