At MIT Center for Information Systems Research (CISR), they specialize in digital business transformation. From interviews, they identified two dimensions that companies are transforming on: customer experience and operational efficiency. Both are important for succeeding in the digital economy and remaining competitive. As they talked to companies about their transformations, they realized that companies were taking one of four pathways:
Companies following pathway 1 initially emphasize standardizing their core processes and building a digital platform with API-enabled business services. These companies automate and reduce inefficiencies, and work on reducing legacy systems and processes. This pathway takes time and is often less risky and disruptive than the other pathways. However, in order to meet customer demands, pathway 1 companies have to improve their customer experience.
Companies with a pressing strategic need to improve their customer experience across the entire enterprise often take pathway 2. They develop new methods—often bundling multiple products or services, building mobile apps and websites, and improving call centers—all with the goal of improving the customer experience. The biggest disadvantage to this pathway is that the new customer experience initiatives can create additional complexity, requiring employee heroics to deliver the product to the customer. The company then has to improve its platform to be able to deliver a seamless customer experience at a reasonable cost to serve.
Companies that have a less urgent need to improve their customer experience can follow pathway 3, a stair-steps, more incremental approach, by 1
rst addressing the customer experience with a project like implementing omni-channel capabilities, then improving operations by removing some legacy systems or creating an API layer and then repeating. The changing focus of projects requires a well-de ned road map if this approach is to succeed.
4. Companies that have determined that there is an uphill battle to transform the current organization can take pathway 4—create a new organization. This pathway allows a company to start fresh, with no legacy systems and processes (or siloes), and to develop a culture, customer base, workforce, and customer experience from scratch. This is a risky endeavor but may be the best solution given the circumstances. The biggest challenge is how, and whether, to eventually integrate the new enterprise into the existing company.