Episode #56: DCFTS 2, Understanding the Value of Digital Transformation
Change is hard. Which is why one of the biggest challenges in digital transformation is getting the various teams working together toward a common goal. In part 2 of our deep dive into a Digital Customer-First Transformation System, we look at how the Value Model can help you visualize use cases, and make sure your teams are aligned. Think of it as a treasure map that shows everyone the direct path from engagement, to strategic business value.
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The CXM experience. I’m Grad Conn CXO, chief experience officer at Sprinklr. And today we’re continuing our discussion of digital transformation, what we’ll call the Digital Customer-First Transformation System.
And before I get into it, I want to make a quick note about a show from the last week of 2020, where we were doing predictions, and were talking about the future of work. If you recall, one of my predictions is that part of the future of work would be a permanently shorter work week. Not sure that we would necessarily work less, but time in the office would be decreased, because it’s going to be difficult to get people to jump on the trains, planes, and automobiles that they have to use now to get to the office. And sure enough, just a few days ago, Google announced that they are doing two things. One, they’re extending their COVID office closures until September. I thought that was pretty interesting. People are getting pretty bullish. Cannes, for example, is back on at the end of June. So we’ll see probably a scattering of openings as we go through the year.
But they’re saying September. And as well, they provide this very interesting note, which is that employees will be expected to be within commuting distance of their local office, and to spend three days a week in the office. Lots of really interesting stuff there. One, they’re going to continue office, I think that makes a ton of sense, especially in an environment like Google where collaboration is important. Number two, three days. Very interesting. And that would be solidly on the predictions that we had on this very show just a couple weeks ago. And then they’re trying to pull the troops in too, because people are sort of scattering to the four winds right now. And they’re putting a signal flare out now that you’re going to need to be back within commuting distance of the local office that you were hired at. So that should be interesting to see people alter their plans. So you heard it here first, and then out it comes from Google. So, stay connected to the CXM Experience. and you’ll be a step ahead.
Alright, so we’re going to talk about digital transformation. So in our first show, where we introduced the DCFTS, we talked about the different models that are the multiple steps to digital transformations. There’s five core steps. There’s a value model, a capabilities model, maturity model, very, very powerful. Where are we right now on the maturity curve. An ROI model, also very powerful. How do we get our money out of this. A use case model, operations model, and a reference architecture model. And all that leads to a customer-first transformation.
The value of this stuff, and I’ve seen it work so many times. The value of this stuff, is that you’re able to align the stakeholders and other members of your management team, other groups in the company, other groups outside the company, agency partners, SI partners, stuff like that, around a common goal. And so often in transformation, it may look or appear like everyone just lit their hair on fire and ran out the door. Right? And typically, transformation projects tend to attract a lot of detractors. People love to talk about how it’s not gonna work, and disparage the careers of the people who are attempting at it. So having something in place that says, hey, we got a plan, we’ve all talked about this, or we’re aligned on it. And we’re going to be driving ROI and value for the company as a result of doing this allows people to stay on target. Think about Star Wars: stay on target, stay on target. Ah, maybe not that part.
Let’s talk a little bit about the first model, which is the value model. And we’re going to go through that and we’ll have all this posted on the blog. So both the CopernicanShift.com and Sprinklr blog, so you can take a look at it as well. It does aid to have the visuals. But I’ll give you a pretty nice overview now and you can understand where we’re going with it.
The value model is based on this very simple principle that all companies have three primary business objectives or PBOs. And they are to increase revenue, to reduce costs, and to manage risk. In some companies manage risk is extremely important, like say a bank. And other companies like say a retailer, increase revenue is extremely important. Some places it’s all three. A general rule of thumb is you can’t build a business by reducing costs. The only way to build a business is by increasing revenue. So that tends to be the primary focus, but you want to do it while managing costs. And you can have a fatal event if you don’t manage risk. So typically, there’s a few chips put on each one of those squares.
And so this basically acts as a map that illustrates the direct pathways from engagement to strategic business value. And basically what will happen is people will take the revenue cost and risk items, and they’ll define the outcomes. They’ll define the opportunities within each, the use cases, they’ll help make those things happen, and then define what to do. And I would say the value model really helps visualize all the typical use cases associated with customer engagement. How they’re connected and interrelated, and where they’re duplicate efforts or gaps in planning or execution. It’s a really great way to make sure you’ve covered all your bases, and you get people aligned to the idea of driving value with the transformation.
I would say that I have observed on many occasions, that the technology-lead transformation project has a slightly irritating tendency to devolve into a technology project and an architecture, and API’s and all that kind of stuff, it’s almost irresistible, because there’s so much work in getting this tech to simply work and connect and work together. And there’s a lot of legacy. And there’s a lot of tech debt. And so this helps you resist the temptation to be drawn into the executional minutiae of that process and instead, think a little bit about what you’re trying to deliver overall, from a business standpoint.
Another thing about the value model, which I think is really important is to outline different scenarios. So think about the model as having a value driver, say I want to increase revenue. The opportunity where there’s an opportunity for revenue to be driven, say from some from existing customers, for example. What the strategic use cases is that helps make that happen. And then what to do. And this is what I talked about a moment ago. What does that look like for the CMO? What does that look like for the director of digital marketing? What does that look like for the director of social? What’s it look like for the manager of public relations? What does that look like for the CIO? So persona-based value drivers are a critical part of this. And really thinking through how you’re driving value persona by persona is very important. I’ve seen it happen over and over again, where people do this generically. And no one really groks it. Or they do it just for the CMO, in which case, you’re leaving out core players, for whom things like career are really important. And you need to talk to that.
I’ll give you a few more examples. I’m going to start talking in the grow revenue area. So how do you grow revenue using modern channels? Well, the opportunity is to create experiences that drive customer engagement and action. So some of the use cases, which is get all your content personalized, make it channel specific and shareable. Another opportunity would be to shift marketing spend to digital to improve brand awareness and reach. Another one would be to build, grow, and nurture advocate communities in all digital channels. We talked a few days ago about what Subaru is doing with their Subaru advocates program. Very powerful program, very well done. And they’re using that to drive business and revenue. And then the “what to dos,” let’s say in content being personalized, you need to establish content performance benchmarks for partners and competitors. You need to optimize content planning, ideation sourcing, distribution, and targeting performance tracking. You need to enable disparate teams to reuse the content and repurpose it. And you need to leverage social insights to inform content creation.
I had an interesting call this morning with the world’s largest, I guess, CPG company. Very cool call. Very cool company and great group of people on the call. And we were talking about personalized advertising, like literally personalized advertising. Like the handle and the pictures of the individual are in a Twitter ad. And they loved it. And they’re very excited about it. The challenge, of course, is how do you manage that on a broad global basis across all the different content types you have? And what I’m also starting to see now, and where this starts to drive things is that, let’s say hey, we really want to do personalized content. I think that’s going to make a big difference. We’ve seen it work. Well, we’re gonna have 500,000 pieces of personalized content by the end of the year. Where does that live? You probably have a DAM, it’s probably not ready for this. Most people use Sprinklr for the front end, as a content management platform, and Sprinklr is the only leader for Forrester in CMPs. The only leader. And in Gartner we’re in the leader quadrant, for the Magic Quadrant. Only superseded by one company that actually creates content. So it’s a kind of a different thing than us. And we were seeing this product, our CMP, is now the fastest growing product at Sprinklr, which is pretty cool.
Really, this is what I love about the digital customer-first transformation system is that you start to now have business discussions, and immediately implications start to emerge around what you need to do from a technology standpoint, and how you need to think about it from an architecture standpoint.
I’ll stay in this revenue piece, you may want to drive revenue by doing innovating and service. So understand how people are feeling and then be able to get back to them really quickly. That’s a whole motion around a new type of customer service across modern channels, and really getting back to people in a very rapid way to use customer service as a strategic advantage. Think about what Zappos has done. And you could argue that Zappos’ core value and Zappos’ core differentiator is just insane customer service. That’s why people keep going back. So always think about that.
And then another one, which is obviously classic would be how do you find, reach, and sell to more buyers, and reduce your acquisition costs. So social selling, mining qualified leads, being able to find the right people. That’s something that I’ve been able to do very successfully, it’s a pretty interesting process. People tend to flag their intentions in these modern channels, and so you can go in and be helpful to them as they’re making a purchase decision.
So, it goes on. And I’ll encourage you to read it. I’ve covered revenue to a certain extent, in managing or reducing costs. You could improve productivity, you could reduce customer churn, and you can recruit talent more effectively. And then, in decreasing risk, you can secure your tech ecosystem, and prove your compliance and governance, rapidly respond and defuse crises, and protect your brand reputation. And so those all can be turned into sets of use cases and what to do next. And at the end of that discussion, with your team, everyone’s very clear on what we’re trying to get out of this transformation project. And that’s the key. At the end of it, everyone is lined up on a set of business outcomes that we’re driving for. And we’ve got them prioritized and we’ve got our focuses, right. Then we go to the next step.
So I’ll pick this up again tomorrow. And tomorrow we’ll be talking about another part of the transformation system, which will be the capabilities model — step two, and that should be fun. That’s a pretty interesting one as well. And until then, this is the CXM Experience. I am Grad Conn, CXO at Sprinklr. And I will see you next time.