DIGITAL TRANSFORMATION

PREDICTIONS
TOP 10 TRENDS YOU NEED TO KNOW

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Digital innovation is disrupting industries at lightning speed and
CEOs are feeling the pressure to deploy the right technologies as
1 Customer experience will remain all consuming
quickly as possible and with fixed budgets.
2 Focus will shift to optimizing operations
Digital transformation (DT) isn’t as simple as implementing one
specific tool or technology. Digital Transformation is a holistic
approach to modernizing every aspect of an organization. From
3 Prioritizing people will accelerate transformation

strategy to operations, technology to culture, Digital Transformation

requires businesses to rethink how they deliver value to their 4 Data-driven CX will expedite business action
customers.
5 Budgets won’t meet needs
Operations, products, and customer engagement can no longer
function in silos. Even though your business is managing disparate
units on the back end, the front end must deliver a seamless
6 Mobile means anywhere

customer experience (CX). When this happens, your business is

truly transformed. 7 Cloud maturity will fuel DT evolution

The sheer scope of a digital transformation can overwhelm 8 Integration will remain king
even the best intentions. But as with all great journeys, digital
transformation begins with a single step. Careful preparation
and consideration of each step in the transformation process –
9 “Smart” anything will differentiate

combined with an awareness of the impact on digital business

transformations – will minimize risk and maximize the rewards a 10 Customers will elevate the commerce experience
transformation brings. With that in mind, we have compiled the
top ten predictions you must be aware of as you move along your
digital transformation journey.

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 PREDICTION #1

Customer Experience Will

Remain All Consuming
Since 2010, the beginning of what is now called “The Age
of the Customer,” the balance of power has shifted from
manufacturing and distribution to the highly informed,

73% 60%
constantly connected customer. These consumers are
jumping between web, mobile apps, and offline engagements,
leveraging greater access to information. They do this not only
to understand what’s good for them, to find the best price, of businesses higher profits
or to learn where to get the products they want, but also to
claim that generated when
determine how brands and products are viewed in the market
and in their social circles. improving CX companies
is a strategic prioritize CX2
Simultaneously, consumers expect stellar experiences while
interacting with a brand, especially one they already know and
priority1
trust. This presents an opportunity for you to innovate, bringing
something new to your business and to your customers that
satisfies their unmet needs. This connection to customer
needs is why the best and most sustainable innovations are
inextricably linked to customer experience (CX).

For today’s consumer, the last best experience they had

anywhere becomes the minimum expectation for the
experience they want everywhere.

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 The last best experience a consumer
had anywhere becomes the minimum
expectation for the experience
they want everywhere.

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 CX and Your Brand
Your customer experience is your brand experience.
Understanding and delivering on your brand promises are
table stakes, and savvy brands are using CX as the key
differentiator to attract, engage, and retain customers. High-
performing brands also know that delivering on this brand
promise takes more than a great marketing strategy. The
entire business must be aligned – from vendors and partners,
to manufacturing, supply chain, and customer service. And,
although retailers and service industries have led the way,
the same customer-centered principles apply in financial
services, healthcare, and other industries.

Customer experience reaches beyond the user experience

you provide via a specific digital channel like your website or
an app. The customer experience is much larger than user
experience. It’s not just what happens digitally, or on the
screen. It’s what happens directly, indirectly, online, in the
store, and sometimes well after the sale.

Your brand is reflected in the tone and voice of your

messaging, the design patterns of user interfaces, and
the conversations customers have with your organization.
Today’s customer expects all of these things to work
together to provide a consistent and meaningful cross-
channel experience that is personally relevant. When you
successfully meet these expectations, you provide your
customers with a reason to return.

86% of consumers are willing to

pay more for a better CX3
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 PREDICTION # 2

Focus Will Shift to Optimizing Operations

For too long, digital transformation initiatives have focused solely on the next several years, focus on DevOps tactics like continuous
customer experience. But customer experience is just one half of a integration, automation, agile release of software, containerization,
successful digital transformation strategy. Yes, external experiences and service virtualization will explode. These modernized approaches
must change to deliver new channels and personalized service, but to development and operations enable rapid product launches and
internal operations and systems must also be transformed. Effective, responsiveness to new customer needs and channels – essential
modern, and digitized internal operations have countless internal pieces of an effective customer experience.
benefits – enabled innovation, cloud and mobile capabilities for lower
total cost of ownership, cost and time savings across the organization – Operational optimization will redefine digital leadership in 2017. Internal
but also an enhanced experience for customers. transformation of operating models will start to widen the gap even
further between digital predators and digital prey. Sustained digital
According to Forrester, 45% of digital predators are already tackling the excellence is not possible without operational transformation. Digital
operational excellence half of digital transformation – but only 18% of predators that led early in recent years with their front-end investments
digital prey have that focus.4 Even for digital predators, the hard work of will begin to lag and fall behind without optimizing operations.
operational excellence to power a digital transformation strategy is just
beginning, and 2017 is the tipping point. You should start to optimize operations by examining your business
for areas ripe for fundamental transformation. Which aspects of your
So how should you approach operational excellence? With the operating model cause the biggest pain points for your customers?
emergence of trends like DevOps, digital-first enterprises are beginning Reduced cost is a major benefit of operational excellence, but for digital
to shift operating models to better support digital initiatives. Over transformation, driving customer experience is the primary goal.

45% of digital predators are already

tackling the operational excellence
half of digital transformation – but only
18% of digital prey have that focus.4
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 PREDICTION # 3

Prioritizing People Will Accelerate Transformation

Digital transformations demand big, overarching commitments from Failure to address cultural and organizational challenges will
everyone within the enterprise. If people know and appreciate the be a detriment to your return on investment and stall your
importance of their roles within a transformation, this collective commitment digital transformation. Organizational change management is a
can withstand any stresses brought upon by wide-reaching change. structured approach for getting people ready, willing, and able
However, most organizations fear change and are not set up to allow for it, to accept and embrace new ways of working that are critical to
which puts digital transformations in direct opposition to cultural norms and future-state performance. Although the changes may be unique,
to the way a company is organized. a good strategy motivates willing individuals, encourages those
who have doubts, and aligns the motivation and encouragement
Looking at what a digital transformation is trying to accomplish, it’s easy to with the implementation.
see how culture and organization can impede progress. For example:
1. Transfer of investment from traditional marketing to digital marketing Over the past two years, digital transformation has begun to
2. Transfer of investment from a brick-and-mortar store to a digital store mature. It’s grown from being a lot of hype to being a set of
3. The need to foster innovation to address new competitors expectations. Hype usually involves shiny new toys and a lot
4. A customer-facing experience that forces individuals to change how they of dazzle. Transforming this hype into reality involves an entire
interact, track, and measure customer touch points company getting behind the changes that need to be made.
5. The need to open up organizational data and systems to third parties via
APIs or digital hooks

More organizations will begin to address the

challenges involving cultural and organizational
change and once the large obstacles are
removed, enterprises will be poised to drive
digital transformations forward.

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PREDICTION # 4

Data-Driven CX
Will Expedite
Business Action
To transform to a digital company, leaders must understand
the relationship between data, business outcomes, and
strategy, and how these impact the customer. Forrester
confirmed that more than 60 percent of executives identified
delivering a superior experience for customers and creating
new sources of customer value as important factors in
determining an organization’s success as a digital business.5

How does data help to optimize the customer experience and

positively affect business outcomes?

Historically, lagging indicators such as customer sales and

customer service requests were the driving factors for
customer satisfaction measurements. However, as you
shift to a digital transformation strategy, they can capitalize
on the power of predictive and cognitive analytics to better
understand the mindset of their customers and appropriately
engage. Companies like Disney and Amazon have embraced
the power of analytics to understand their customer activities
and create packages that are most appealing to them.

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 There are many digital transformation initiatives emerging
with a focus on data-driven, customer-centric business
models. Some of these include:

• Identifying trends around customer habits that are

indicative of their future needs

• Sentiment analysis on the voice of the customer,

leveraging unstructured data on social media

• Determining macro factors that influence customer

behavior such as the relationship between weather
patterns and retail clothing purchases

• Investigating and proactively planning for supply and

demand fluctuations to improve operational efficiency

• Proactively examining health patterns based on customer

behavior and defining programs that can avoid high-risk
medical conditions

To create an effective customer experience, business agility

and data validity are two important parameters. This strategy
involves a holistic view of enterprise and Big Data, taking
advantage of vast sources of previously untapped information
in the form of unstructured data. Fast and effective data
along with strong analytics are proven success factors which
will improve your ability to deliver personalized, contextual
communications and interactions.

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PREDICTION # 5

Budgets Won’t Meet Needs

Digital transformation has a significant upside for the bottom line of
your organization and can help increase revenue:
1. Improved DevOps can decrease time to market for key apps,
features, and sites.
2. Better customer experience can decrease customer churn.
3. An agile integration platform allows organizations to branch out
to new markets and partners.

According to Altimeter’s 2016 State of Digital Transformation study,

69% of responding companies said a lack of data or ROI to justify
the value of digital transformation is still holding them back from
taking steps toward digital relevance. This is a sizable increase from
Altimeter’s 2014 survey, where only 34% of respondents cited the lack
of data as a challenge.

Although we’re in an era of Big Data, companies still struggle to

capture, comprehend, and act on the insights available to them.
Business leaders want a business case. Creating a justification for
the overall digital transformation initiative as well as the individual
components within it is critical to getting buy-in. We recommend you
focus on four key things:
1. Current state and a variety of inputs
2. Vision for the future
3. Prioritized list of activities with key business value inputs
4. Roadmap based on the business value

The reality is that no organization will sign off on all aspects of a

strategy. However, if you have the data to back up the business value
of any one activity in your digital transformation strategy, then the
chances of funding it will increase.

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 Creating a justification for the overall
digital transformation initiative, as well
as the individual components within it, is
critical to getting buy-in from leadership.

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 PREDICTION # 6

Mobile Means Anywhere

The consumer mobile market has reached the point of saturation, which eliminate at least one of these steps allows customers to accomplish
has led many businesses to pull back on isolated mobile initiatives and tasks in the way that works for their individual needs. By embracing
instead focus on a singular, integrated customer experience. Companies mobile as a tool to provide a better experience in any point of the sales
now realize that the best strategy isn’t to make a website mobile cycle, companies are increasing the bottom line.
responsive or build a cool app just because it’s cool. The best strategy is
to give customers a great experience using the tools available. Additionally, a customer experience strategy is all encompassing,
focusing on everything the customer encounters. A mobile strategy is
When planning a customer experience, it’s crucial to consider mobile as a component of that all-encompassing approach that can be molded to
one component of a holistic digital transformation and to recognize how solve an array of needs.
mobile fits into the context of a larger customer experience strategy.
Think of this: mobile is more than just a phone app available in the
Customer experience is more than providing the same experience app store. Mobile is tablets, watches, medical devices, beacons,
across all touchpoints (an approach often referred to as omni-channel). GPS, geo-fencing, home automation (“smart homes”), automotive
As you know, an effective customer experience goes beyond providing a connectivity, and so much more. It’s the ability to access data
consistent experience; it provides features and capabilities that offer the whenever, and wherever.
most value to the user.
A true mobile strategy looks at the entire mobile ecosystem to
The smartest companies are giving their customers a way to complete determine the right solution for users while simultaneously considering
tasks anywhere. Consider a power company that incorporates a mobile the effort it takes to create the end product. Skipping this mobile
solution to allow customers to pay a bill from a phone. The complete strategy step results in what businesses are seeing now, which is the
customer experience may include many touchpoints such as phone, frustration that comes along with releasing an app without taking the
mail, and a physical office, but incorporating a mobile component to time to build something that adds value.

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 When taking a step back, you may realize that your business
has morphed into a giant web of disjointed, cobbled-together
processes that don’t work for the users. When this happens,
mobile is the holistic solution and can play an integral part in the
overall customer experience, even if your customers are internal.

Think of how mobile can solve these problems:

• Sales and distributor enablement
• Product information, quotes, and proposals
• Logistics
• Employee/team collaboration
• Facility mapping
• Workflow planning (scheduling, time tracking)
• Service requests
• Customer bill payment
• Medical records and appointment scheduling

Instead of just building an app for the sake of having an app,

think about how your solution could solve real problems. By
addressing these needs with a complete mobile strategy, your
business can cut costs and increase efficiencies.

Creating a complete mobile solution involves more than just

building a mobile app because it feels like the thing to do. It
requires careful strategy to determine what sort of solution
is right for your needs. It means thoughtfully designing and
developing a tool that will solve challenges and thinking of
mobile as a holistic approach, not as just another piece to add to
an already complicated system. The reality is, when done right,
mobile creates a better business model.

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PREDICTION #7

Cloud Maturity Will Fuel DT Evolution

Many infrastructure and operations readiness in order to maximize
(I&O) technology investments fail to investment. Savvy technology
deliver true business value. A business leaders understand that cloud plays a
technology agenda emphasizes critical part in an organization’s drive
investments to power core business to affect external change on the
systems in addition to customer-facing market and influence the way work
applications. This develops competitive gets done internally, regardless of
advantages that propel your business business function.
forward. Few I&O investments are as
critical to that as cloud computing. I&O Besides boosting operational
leaders invest in cloud because it is: efficiencies, cloud enables
digital transformation by allowing
FAST organizations to compete on
Use cloud to accelerate the development innovation. Many DevOps teams have
of technology-enabled services in adopted a hybrid cloud strategy (a
minutes, not days or weeks. Make combination of public and private cloud
changes to these services just as quickly. solutions) enabling more effective and
automated technology development,
EMPOWERING management, and deployment.
The business gets self-service solutions DevOps in the cloud dictates a new
that don’t require the specialized skills approach to cloud development,
of technologists. including continuous integration and
continuous development tools for
ECONOMICAL rapid innovation.
Cloud is not always cheaper, but its
transparency and flexibility can help For the foreseeable future,
to avoid costly, long-lasting capital organizations will continue moving
expenditures. Pay only for what you to the cloud in order to remain
need, when you need it. agile, relinquish the need to update
software and hardware solutions, and
Successful adoption of cloud requires provide the fuel to accelerate their
careful organizational assessment, digital transformation initiatives.
inventory of skills, and employee

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 One example of a company leveraging the cloud is CPI
Card Group. CPI Card Group’s on-premises systems
required users to spend too much time developing
reports for individual locations and entities since reports
had to be built and sent out separately. In addition,
reports were difficult to replicate and data was not
easily shared across the business. The company
needed a scalable reporting platform making the
transition to the cloud straightforward and supporting
future growth as part of a broader enterprise cloud
transformation strategy.

We implemented a cloud service technology that is

fully compatible with financial reporting, HR, ERP and
CRM systems. CPI Card Group now has an interactive
and real-time management dashboard making corporate
data easier to access while supporting cross-enterprise
information analysis.

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 PREDICTION # 8

Integration Will Remain King

Delivering a great customer experience requires three key things: adjusted to align with digital transformation goals, so too must you
• The right data about that customer adjust your integration strategy to digital.
• The right transactions in critical moments
• A seamless journey Moving beyond touchpoints to an omni-channel experience is what will
retain customers in 2017 and beyond. Investment in effective integration
All three of these elements drive the need for integration. breaks down barriers between countless device channels.
In 2017, the building excitement around technologies like APIs and
microservices will manifest as a business imperative. Legacy monoliths For your customers, a modern integration architecture has the
and enterprise services buses that trap essential, valuable data, will no following benefits:
longer be tolerable in the face of ever-heightening customer expectations. • Real-time analytics with the right insights at the right time
• A smooth fast experience through streamlined interoperability
When you think about digital transformation, your focus may tend to
• New and faster product and services launches with faster time
be on front-end systems. However, delivering a personalized customer
to market
experience requires data, transactions, and content from back-end
systems to be seamlessly integrated. As front-end strategies have • Omni-channel seamlessness

“Integration becomes
the strategy that enables
rapid iteration and leads
to digital mastery.”6
- FORRESTER

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One example of a company modernizing its integration
architecture is TCF Bank. TCF, a Minnesota-based national
bank holding company with almost 400 branches, is
undergoing a massive digital transformation to be relevant to
its customers anywhere, anytime, and on any device.

To achieve its commitment to providing the best customer

experience possible, TCF has worked to improve its
digital banking capabilities through the establishment,
modernization, and integration of IT systems that support and
enable its online and mobile banking operations. This involves
massive internal change to shift from a legacy mainframe
to a microservices approach to integration, enabling data
accessibility for marketing and customer analytics, speed to
market, and an agile approach to customer demands. These
customer-facing benefits are not possible without a modern
integration platform.

Focus will continue to extend beyond external customer

experience to back-end integration as the critical component
to successful digital transformations strategies. Integration
of your data, transactions, and content create this pipeline of
customer insight and internal innovation.

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 PREDICTION # 9

“Smart” Anything
The evolution of technologies such as artificial intelligence (AI),
chatbots, and the Internet of Things (IoT) are transforming the way we
live and the way companies operate.

Creating a world-class customer experience for every user in every

outlet requires more than just simply adding people. You need smart
assistance to create those experiences in an efficient and effective
manner. Let’s explore a few tools that can help deliver an outstanding
customer experience.

AI AND CHATBOTS
These have tremendous potential to transform both the customer
experience and other aspects of a company. Using these alongside
your customer service reps can cut down on the time it takes to
answer calls and still provide a better experience.

INTERNET OF THINGS
The promise of IoT is phenomenal, from smart printers to smart
utility meters and everything in between. Smart devices that
relay information have huge implications for healthcare, high-tech
manufacturing, and almost every other industry.

CONTEXTUAL INTELLIGENCE
Contextual intelligence takes insight and makes use of it. In other
words, the volumes of data will drive better use of data in context.
Almost every major software vendor can make use of contextual
intelligence to power their users and help them identify what works
and what doesn’t work. Contextual intelligence will improve the By 2020, at least 65% of
efficiency of business owners everywhere.
companies (up from 33% today)
Increased capabilities to both gather and use data to create a better that have adopted IoT will utilize
customer experience has improved to the point where smart tools will
become a must-have capability to stay competitive in the marketplace. an IoT platform suite.7
- GARTNER
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 PREDICTION #10

Customers Will
Elevate the Commerce
Experience
Economic growth has historically influenced digital commerce.
However, the evolution of the connected world and customer
has raised the bar for consumer expectations.

As consumers continue to flock to the convenience of online

shopping, brands that operate in eCommerce are under
more pressure to deliver engaging, well-designed, and
frictionless experiences across all channels. Staying ahead
of commerce trends can establish a solid foundation for
digital transformation. Here is a look at some of the top digital
transformation initiatives for commerce:

GOOGLE SEARCH IMPACTS MOBILE COMMERCE

Google recently announced that primary ranking emphasis
will be placed on the mobile versions of websites. Ultimately,
companies must accelerate initiatives to build mobile-first,
responsive designs and make this a priority for 2017 if they
want to maintain and enhance overall organic ranking.

Commerce platforms that offer mobile-optimized templates

can jump-start the process, and provide a quick way to
respond to this change.
78% of consumers believe
IOT AND OMNI-CHANNEL ACCELERATE
organizations that provide custom CUSTOMER EXPECTATIONS
content are interested in building The proliferation of connected devices has initiated endless
channel opportunities to engage and sell to customers.
good relationships with them.
– TMG CUSTOM MEDIA
DIGITAL TRANSFORMATION PREDICTIONS: TOP 10 TRENDS YOU NEED TO KNOW / 19
 The content and user experience of those devices are driving new commerce challenges rather than focusing on opportunities that will set
commerce rules of engagement. them apart from the competition.

Consequently, the expectation of brands to adapt to these various The ultimate goal of personalization in eCommerce is to not only deliver
channels is accelerating. Agile development processes, Software-as- contextually relevant messages and offers, but also use data and
a-Service, and virtually limitless cloud infrastructure have evolved to customer insights to provide a personalized, unified customer journey.
deliver capabilities faster and more frequently – all in an attempt to help
brands keep pace with consumer expectations. APIS ARE CREATING HEADLESS COMMERCE
Most eCommerce platforms cannot keep up with increasing demands
DATA IS DRIVING PERSONALIZATION to leverage content to sell products and services. And, most content
Higher levels of personalization and engagement are essential for management systems cannot handle the complexity of commerce
establishing customer loyalty. While connected content and commerce transactions.
systems can engage customers, you must also have access to the
customer insights that will allow you to decide where and how to APIs and rest services are creating “headless commerce” so
optimize your existing digital strategy. sophisticated content creation and management will drive online
marketing and digital commerce sales.
Real-time website analytics can identify customer experience issues,
and allow you to experiment with different content, layouts, and Whether you’re a “pure-play” or “click-and-mortar” eCommerce seller,
offerings to increase conversion rates and provide the best ROI. using APIs to merge commerce and content systems will lead to
more frictionless commerce and, ultimately, a vastly improved online
However, many companies are preoccupied with solving existing digital shopping experience.

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 Next Steps
Digital transformation is an ongoing process where you
will create your own blueprint. The tools and techniques
that work for your business are unique to you. This is both
daunting and exciting. You are in a position to dramatically
change the experience customers have with your brand.
How will you use operations to improve the customer
experience? What about mobile? How will your shopping
experience change? And how will you do all of this without
breaking the bank?

By putting a laser focus on your specific pain points, you

can take steps to transform each of your business systems.

Go back through this guide and think about how

each prediction could impact your business. Digital
transformations involve far-reaching realignment
of technology and business models to improve customer
engagement. They require patience, resources, and
institutional support across an enterprise, and they
are necessary for success in our digital age. Careful
consideration and preparation of each step in the digital
business transformation process help ensure a successful
transformation that benefits your entire organization and
your customers.

SOURCES:
1. Forrester, Forrester’s CX Index Ranks the Brands that Deliver the Best Customer
Experience
2. Gartner, Leading on the Edge of Chaos
3. CMO Council, Can We Future-Proof Customer Engagement?
4. Forrester, Predictions 2017: In Digital Transformation, The Hard Work of Operational
Excellence Begins
5. Forrester, The Key Success Factors of Digital Business Strategy, 2016
6. Forrester, The Integration Imperative of Digital Experiences
7. Gartner, Use the IoT Platform Reference Model to Plan Your IoT Business Solutions

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 Contributors
Michael Porter
Jim Hertzfeld
David Chapman
John Ambrose
Stephanie Banks
Michael DeNunzio
Elizabeth Dias
Stephanie Gallina
Anna-Claire Gibson
Alexandra Haefele
Katherine Harding
Melissa Kaatman
Noelle Reinhold
Sharon Suchoval
Kate Tuttle

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