This week we had the opportunity to bring together for a coffee in our office Christina Hirsch, Customer Experience Director of Vodafone Germany and Alexander Wittkow, Partner & Digital Transformation Lead at Lupus & Company, to discuss about Digitalisation and Customer Centricity.
Alexander: First of all, let’s start from the basics: what is digital transformation? The way I view it is that new digital technologies are the trigger of a fundamental transformation that causes the need to change our culture, management methods and processes. The biggest benefit is a substantial boost in efficiency which is caused on speed, automation and accuracy. Speed because we are able to do things in a fraction of the previous time, which gives us the option to use time for other things. Automation because it gives the possibility to get rid of unloved work; and accuracy because it gives us the option to measure the input and output more exactly and understand how we can improve a lot better – especially to best serve our customers.
What about you Christina? How would you define digital transformation and what are the biggest benefits you see?
Christina: Thank you for the introduction, Alex. Well, for me, Digital Transformation is first and foremost a thing that is happening to the entire society. Imagine how much our life was changed by internet and smartphones and it continues to change. This is at least as powerful as the invention of letterpress printing or teaching everybody to read and write. It is like a big wave that changes everything, including the way we work. Now, coming to digital transformation of companies it is a new mindset of approaching things. I have dealt with various complex and lengthy waterfall IT projects. Typically, those projects are a black box and the real discussion starts when UI and functional changes become visible. It becomes really frustrating when you develop a project for two years and then find out at the test stage that the requirements of your customers and stakeholders have shifted.
Working digital to me is the opposite of this, it involves first doing demos and tests, and building only what is customer-proof.
Show the progress and share very transparently what works and what not. This also means discussing the benefits and adjusting priorities and targets on the way, rather than being rigid over lengthy periods of time.
Alexander: And how do you see the process of digital transformation? Is it more of a technological or cultural process, from your perspective?
Christina: Vodafone is a high tech company, so we go nowhere without technology. But the tough nut is the culture. Everyone has to go beyond their own imagination. Myths and beliefs that have been around for decades can be falsified in seconds once they are tested and measured. Silos must be cracked to work on joint solutions. On the technology side, the preamble to digitizing can be a lot of housekeeping. Digital transformation lifts messy processes and workarounds that need to get in shape first. To get started, I guess 50% of the work is building functions to enable digital customer journeys, 30% is the mindset and 20% are the new shiny online interfaces. In a more mature stage, it changes and becomes less about building functions and more about customer journeys obviously.
Alexander: I agree. We also have to keep in mind that technology is changing faster than we often are able (or willing) to adapt our processes and culture: this causes a variety of challenges – from the way we interact with digital touchpoints to the way we manage our companies and societies. The most difficult topic in my eyes is to accept that things are changing: the speed of change is enormous and for a lot people it is hard to accept that things are now turned upside down. For example, the fact that in digital areas teams can only hold the needed speed if they are equipped with end-to-end responsibility. This is an often-seen problem: many of our management systems do not allow this kind of decision taking, whereas those who are currently winning in competition are the ones who have installed a product ownership within the teams and the ability to collect and interpret all kinds of data or customer insights. This brings me to my next question: in your eyes, what is the biggest challenge to digital transformation?
Christina: The biggest challenge is that it looks so easy on paper, a great seduction to set high ambitions and short timelines, but meeting these expectations can be very tough and even kill motivation. I discuss this a lot with peers from the bank and insurance industry and we all face similar challenges. Companies that have been successful prior to 2000/05 have a different IT infrastructure. Data layers and APIs have to be built to enable data analytics and digital functions. This means replacing huge technology chunks or adding functions they were not built for. So digital transformation partially relies on IT transformation which is also quite complex.
But I would also like to mention that the famous digital winners typically have shorter responsibility chains in their business models. They connect people and infrastructure, but they don’t own it. No need to deal with the details around warranty cases, fixing cars or cleaning hotel rooms. Quality is limited to the digital interface, evaluation outsourced to the users. Companies who own the entire value chain have a different level of complexity. Imagine we would give single cellphone sites to the owners of the land they stand on. Customers could rank if the coverage was good and just avoid the location if they don’t like it. Not even thinking about regulation, that would be pure nonsense.
Alexander: You’re absolutely right Christina, the ability to collect more data points and measure them more exactly and more often is a key driver of the ongoing transformation process. That’s why I see KPIs as one of the main pillars for digital transformation: KPIs make us understand the current status and define a target, giving us more transparency about our products, customers – and also our own work.
Being transparent as a working team, team member and individual is great if you are confident, love what you do and have success. But if not all of this is the case, transparency can cause resistance and fear. So the lower the identification with the product and the real will of the employees to optimize it, the lower the chances are for digital transformation initiatives to succeed.
Before implementing digital methods, I believe you need to make sure that people are really motivated to improve things. Only then the advantages of a digital transformation will pay off.
Off the back of this, what do you think is a suitable way to drive the effective implementation of digital transformation without compromising operational processes, efficiency, and effectiveness?
Christina: I totally believe in KPIs as well, don’t get me wrong, but they have to be chosen carefully. I am a big fan of adding a ‘definition of done’ to all tasks, in addition to generic KPIs. For organizations I recommend testing what works in digital workstyle and discuss failure very openly. Deciding what is suitable to start squads is critical. For example, we were very successful in improving parts of our online sales journeys and building a new UI for call-center agents. Both cases have been addressed before and got stuck in complexity. In the squads, we had the right people, great passion, a x-functional team and empowerment. Results are impressive and KPIs can be measured in terms of transparency, transaction times, conversion rates and time and interaction to be invested by us and the customer. So it is about suitable tasks and a great team, and the KPIs are not so new.
Alexander: Your example here of improving online sales journeys reminds me of another case you mentioned in a previous conversation: that some key projects at the moment revolve around developing digital self-service for your customers. This seems like quite a shift from customers being ‘guided’ through the customer journey by Vodafone or your customer care and customer service agents; to an environment in which the customer is capable of guiding themselves through this journey.
Considering this, what needs to be changed to enable a digital self-service environment to work? Especially considering differing levels of digital capabilities of customers?
Christina: Bad news, there is no ‘one size fits all’ approach. We go through customer intents case by case, build target journeys and start filling them with selfcare functions. Priorities are on intents with volume, elimination of complexity and frequency of interaction. For example, in our digital onboarding journey, we proactively give status updates and details on arrivals of a technician. Being informed raises the confidence and helps us reduce the number of failed appointments. Customers have a digital experience from day one and we are at their side to help.
Alexander: This leads me to my last question: how much is CX driven by digital at Vodafone Germany and are there specific differences between the channels at Vodafone when it comes to digital transformation?
Christina: to answer the first half of that question, the whole idea about a digital company is to be centered around CX. We are brothers and sisters. For example, applying Service Design Thinking – which is clearly a digital methodology – makes more difference for CX than chasing after NPS values. The NPS is still valid and important to us, but it is rather a direction sign. Changing the way of finding solutions from inside-out to outside-in makes the real difference. We have to think in journeys and in terms of how to guide the customer between channels. That is quite different to optimizing process snippets within silos, which is what happened in the past.
This means that absolutely, there will be – and there are – differences between the channels when it comes to digital transformation. There will always be the good old call-center and our large footprint of shops for personal assistance. But now, there is also WhatsApp, which we launched as first European operator with a comprehensive service approach. WhatsApp is used on more than 90% of Germany’s Smartphones. I believe this will be larger than call-center in the future because it is so convenient, again for both customers and agents. Nevertheless, I really prefer thinking in journeys and guiding the customer to the easiest and best channel for each intent.
If you’d like to hear more from Christina about the relationship between CX, Digital and the customer journey at Vodafone; or have a chat on the complexities of digital transformation with Alex, join them both at the Savant eCommerce Berlin on 5 & 6 February 2019.