March 30, 2023

Navigating the Zone of Uncomfortable Debate: How to Identify Roadblocks in Your Digital Transformation

Digital transformation has become a buzzword in today's business world, and for good reason. Organisations must embrace new technologies and digital strategies to remain competitive and relevant.

However, achieving a successful digital transformation can be complex and involves much more than just implementing new technologies; it requires a deep understanding of the organisation's culture, processes, and goals. The aim is to create an efficient and effective business that provides the best possible service to its customers.

This begins with setting clear goals for the programme so that there is a view of what success looks like and there is clarity on the purpose of the work. Establishing a clear roadmap and timeline for implementation is important and a normal part of programme management.

However, it is also essential to recognise that digital transformation can be uncomfortable since it often involves challenging long-held beliefs or disrupting existing processes. A key challenge of a successful digital transformation process is actually achieving the changes intended. Just because a digital process is available doesn't mean a transformation occurs! This is why an effective digital transformation strategy needs to anticipate and work to manage 'roadblocks'.

Anticipating Roadblocks

Potential barriers to success must be identified and understood and then managed or eliminated.

Some of these potential 'roadblocks' may include:

•          Customer Effort: if a customer is willing to engage digitally, you need to ensure that the effort is kept to a minimum and is proportionate to the benefit they will receive. People will generally choose the path of least resistance, so if your service is too complicated, they may give up and go elsewhere, or revert to an old process.

•          Lack of Automation: what are called digital programmes are often based on multiple point solutions, or microservices, procured at different times, then ineffectively stitched together, often requiring manual processes for part.

For example, a web form front end may be part of the online process yet not fully connected with the back-office system. The lack of an automated process causes the interaction to revert to an administratively intensive, human-driven process when, for the simplest of transactions, the possibility of a straight-through process is a reality.

•          Broker 'Sabotage': where the distribution model is broker-led, it is inevitable that the relationship between the broker and their customer will be strong, and the broker will want to provide the best service possible. In aiming to serve their customer, the broker can disrupt or bypass the direct process.

The reality is that the best service may well be achieved by encouraging the customer to adopt the digital route and then enjoy the benefits of speed and great communication along the way.

•          Culture and Mindset: a path to true digital success is not just about technology. If you pit a closed mindset against a great system, guess which will win!

A successful, disruptive, transformative digital programme will be driven by the people. Their understanding and buy-in is critical, and the amount of work needed to communicate the change and benefits to all stakeholders should not be underestimated.

•          Lack of Ambition: have you ever heard of the expression "acceptable underperformance"?

This is where targets, stretch or otherwise, do not reflect the potential of the digital platform and process.

From experience, the natural level of engagement, assuming no barriers, is somewhere around 35%. That is, 35% of customers will interact digitally IF there are no barriers. Additionally, 95% of consequent telephone interactions can be converted into a digital channel with the promise of speed and visibility.

Exploit the technology to its full potential, make your targets ambitious, and understand and eliminate the barriers. 

 •         Strategy vs Tactics: overburdened IT functions often have different parts of the business clamouring for attention and resource. This has, and will, lead to short-term decisions being made and some very neat solutions being put into place but not joined up. These often 'look the part' and can provide an improved customer experience, but because they're not joined up, this can lead to duplicative work and zero cost benefit.

A strategic view would examine the end-to-end requirement on day one and have more chance of delivering an optimum solution.

•          Old Thinking: money lending has been around almost forever. The opportunity to drive change in an industry that is, to an extent, stuck in its ways is greater than ever, and the timing has never been better.

The Zone of Uncomfortable Debate

The diagram above represents the path of a typical digital implementation. Initially, some progress is made. Usage finds a natural level, and there may be some benefit with regard to operating costs.

At this stage, we often observe an invisible barrier, and the initial impetus slows or flattens out. This is the effect of the 'Zone of Uncomfortable Debate', affectionately known as the ZOUD.

The points covered above fall into this zone and prevent breakthrough performance in some way. But unless the "uncomfortable debate" takes place, ambitious goals, such as a 90% digital penetration leading to a 65% reduction in call-based communications, will not be met.

We all have Zones of Uncomfortable Debate. For effective transformation, these must be identified and managed decisively. Then we see a coordinated, driven organisation whose strategy can be based both on cost leadership AND differentiation - a great trick if you can pull it off.

If any of this sounds familiar and you would value some pointers - or maybe you are about to embark on a new initiative and are keen to get a solid start - get in touch.

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