By now, most executives know what characterizes a successfully digitized business: a relentless focus on customers, a consistent app-development effort, a talent for analytics. What they may not know is how many obstacles can appear along the way. At one large software firm, recalls a former executive, the results from a digital initiative looked promising: better leads resulting in a 15% increase in closings (upwards of $10 million a year); streamlined customer support, which shifted its focus from a call-center approach to a web-based user community (costs savings of $3.5 million a year); and an improved customer retention rate (as much as $300 million a year).
The hardest part of the transformation wasn’t building and integrating technology; it was changing the company’s traditional approach to software product management. “Companies love to say that they are customer-focused, but they still have to deal with the challenge of top-down mentalities and cultures,” says the former software executive. “It’s very hard to get bottom-up priorities from the customer and have product management in the middle standing up for what the customers say they want versus what the general manager of the unit says is important.” In other words, it’s hard to follow customers when someone keeps getting between you.
And while the company recognized the need to offer apps, at first it wasn’t sure what those apps should do. Rather, it learned what its apps shouldn’t do after creating two of them. One mistake was stuffing the app with reams of content. “A mobile website is more effective than an app for just reading content,” says the executive, adding that, “successful apps have to be task-based.” Indeed, the company now offers a highly successful app for project management.
To understand what customers were doing with its apps, the company put together a team of five analysts. The customer base was segmented according to name, geography and product. Analyzing that data should have “allowed them to see additional opportunities,” the executive says. But company management wasn’t clear on what direction to take; it shuffled the analytics team around, and then watched it dissolve to just a single member. The company also built user profiles, supplementing them with personalization technology, in anticipation of delivering targeted content. But a cost cutting move erased most of the content creators.
It takes time to achieve ROI on digital investments, and the urge to downsize hit the digital effort hard. Company management “just wasn’t willing to wait that long,” says the former executive. In the digital era, part of what needs to change-in addition to tools and processes-is any pre-existing mindset regarding timetables.