The Apparently Obscure Connection Between the Digital Experience and Operational Transformation

Mar 27, 2022

Welcome to The Digital Experience Report, your source for news, analysis, and insights on the ExTech (Experience Technologies) market and all things related to the Digital Experience.

In this report, we examine the critical relationship between the digital experience and operational transformation brought to a head by a conversation with Mark McGregor. We also share new research from Pew examining the public's view of AI and human augmentation, and a new report from McKinsey on customer experience pitfalls. Plus news from Anaplan, Kore.ai, Cascade, Glia, Espressive, Ivanti, Dialpad, Nexthink, Qualitrics, Talkdesk, HPE GreenLake, 3CLogic, Emplifi, ServiceNow, Sinequa, Khoros, Survey Dynamix (now Mindful Feedback), and Shindig.

The Apparently Obscure Connection Between the Digital Experience and Operational Transformation

Last week, I gave Adobe a little tough love as I expressed my frustration that it wasn’t going far enough as it articulated its vision of the digital experience and its role in the enterprise.

“I see the digital experience as the totality of the customer journey from awareness through consumption and their lifelong engagement — long past the sale,” I said in last week’s report. “And from that perspective, the marketing and purchasing parts, while critical, are a relatively small part of the customer experience.”

While I went on to explain the important relationship between the customer, employee, and ecosystem experience and that Adobe also supported parts of them, I stopped there. I didn’t dig into one other critical dimension of the digital experience that comes into play once you see it as something that extends throughout the entire life of a customer engagement.

Ironically, it’s a part of this story that has been bubbling up in nearly every conversation I’ve been having recently with enterprise executives and industry thought leaders. I’d even go so far as to say it’s an axiom — just one that most purveyors of “digital experience technology” are ignoring: you can’t deliver a winning digital experience without transforming operations.

Service, Pain, and Zones of Customer Excellence

This topic came to a head for me this week during an off-chance discussion with industry thought leader Mark McGregor.

McGregor is the former VP of Marketing for Signavio and a former research director at Gartner (among other roles). As a result, he is tuned into the relationship between the experience and the operational model that underpins it.

During our conversation, he shared with me an article he published on LinkedIn almost three years ago, entitled Are You in the Zone for Success. In it, he makes the case that rather than chasing a “customer experience,” organizations should be seeking to deliver “customer excellence” — and that the customer’s perception of that excellence was a derivative of the “service” that an organization provided and the level of “pain” a customer had to endure during the transaction.

The point was that even if you delivered fabulous service, if the overall experience was painful, it wouldn't matter much.

He explained that he and his fellow developers of this concept preferred the term customer excellence to differentiate it from the perception that the customer experience was all about the service and interaction without giving the appropriate due to the underlying business process that supported it.

My translation of his approach is simply this: process and operations matter a lot in delivering a digital experience.

While I unquestionably agree with McGregor’s core premise, I think it unnecessarily complicates things. We don’t need another term to describe this situation — we simply need to put a stake in the ground and yell from every rooftop that a delightful experience rests on efficient operations. Period.

In fact, the effective coupling of the experience to efficiency gains may be the surest sign that you’re on the right track.

Winning By Improving the Experience and Efficiency Simultaneously

A few weeks ago, I spoke with a member of our DXO Council who is the CIO at a massive health system on the west coast.

I asked him how he saw the intersection between the experience and operations, and he explained that it was part of why he was pushing toward smart hospitals. He said that most healthcare organizations are looking at smart hospitals merely from a cost savings perspective.

On the other hand, he and his organization see it as a way to simultaneously reduce costs, improve care, and deliver a better patient experience. He deployed a technology that agnostically collects telemetry from clinical equipment and then applies algorithms and machine learning to predict and prevent equipment failures.

The ROI, he explained, was almost immediate in terms of cost savings from not having failed equipment cause procedures to be rescheduled. But the benefits to care quality and the patient experience were just as impactful.

He pointed out that the effort was not about sacrificing efficiency to deliver a better patient experience — it was about providing a better experience by improving efficiency.

A version of this story, in which the most significant experience wins are actually realized by improving the operational state to remove friction and thereby improve efficiency, continues to surface in almost every conversation I have with organizations using the digital experience to win in the market.

The Operational Transformation That Will Lie at the Heart of Your Experiential Wins

My frustration last week was that too many organizations equate the digital experience with marketing or the purchasing journey, rather than with the entirety of the customer’s interactions before and long after the sale.

Breaking through that mental roadblock is the essential first step. But the moment you accept the digital experience as something that persists throughout the customer's lifelong interaction, and then as something that transcends the organization to include the employee and ecosystem experience, something else will click. The connection between the experience and the operating model and business processes that support it will become instantly apparent.

Moreover, the intricate interconnection between the various technologies necessary to transform an organization around the digital experience becomes plain — and hopefully makes my view that we must look at all of them as a single ExTech Market seem obvious.

This interconnection and the need to address so many moving parts when crafting and delivering a delightful digital experience is what makes this process so tricky — and why it's easier for so many vendors and enterprises to simply apply it in the context of marketing.

But make no mistake about it, if you want to win in the experience economy, you'll need to break through this artificial mental barrier and invest in the operational transformation that will lie at the heart of the experiences that will make the difference.

The good news is that if you do it right, it will pay for itself.

Worth Reading

AI and Human Enhancement: Americans’ Openness Is Tempered by a Range of Concerns

New research by Pew sheds some light on how the public views various applications of Artificial Intelligence and human augmentation. And the results may surprise you. [Read the Research]

Six customer experience pitfalls to avoid

A new report by McKinsey explains that to successfully enhance customer experience, companies need to build the right organizational capabilities and culture to plan, execute, and sustain the transformation. [Read the Report]

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The Apparently Obscure Connection Between the Digital Experience and Operational Transformation