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Digital Transformation

29 June 2015
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Reading time: 3 minutes

In my previous blog posts I reviewed product, service and platform innovation and discussed the roles that Big Data and Data Analytics have in business innovation. Another interesting dimension that I have not yet paid any attention to, which will be the focus of this post, is innovation in User Experience. Sawhney et al¹ define user experience innovation as changing the way how customers interact with an organisation. The example he gives is moving phone conversations with call centres to self-service using a web portal.

There are a number of drivers for innovation in user experience. Organisations innovate the user experience in order to reduce costas the capital expenditure required to bring up a self-service portal is often one or two orders of magnitude lower than the operating expenditure required to run a call centre. Furthermore, a wellconstructed self-service portal would be available 24/7 while call centres (at least the on-shore ones that customers favour) are often not. It is also possible to deliver a better customer experience through a self-service portal than through a call centre as there are typically no waiting queues and the portal can provide feedback that is a lot harder to provide on calls in a consistent way.

Achieving this shift in user experience requires organisations to move from labour intensive business processes conducted in call centres, bank tills, airline check-in desks and the like, to online self-service processes that are supported by digital technology. User Experience innovation is driven by organisations through digital transformation, i.e. the changes associated with the application of digital technology in all aspects of human society that an organisation needs to embark on.

The pre-requisites needed for this digital transformation to occur are now available, as it is reasonable to assume that customers have access to desktops, laptops, tablets, or mobiles and these are now generally on a high-speed mobile and broadband network. Thus manufacturers and service providers are busy selling online self-service portal projects to their clients. But it need not stop here. Equating user experience and digital transformation with self-service portals would not be doing the subject justice, as user experience innovation can, and will, go a lot further.

The environment in which customers interact with organisations is increasingly enriched with a number of sensors that generate data. When the sensors are networked this data can be used to create a much more advanced User Experience. Some examples: Apple have used iBeacons in their flagship stores. They provide precise location information to iPhone and iPad apps via low-powered Bluetooth, which enables a wealth of User Experience innovation. They can be used to locate customers that retail staff wish to talk to, or they can also be used to aid the customer’s navigation within the retail environment and so on. Zuhlke built a mobile app for a vendor of medical gases, which interacts with the company’s gas cylinders to retrieve current, and predict future, fill level. The app then advises on the best moment for ordering further stock. We have built a customer information system that is deployed within Swiss railway carriages that uses GPS locations to provide information on punctuality of the rail service and also to show what connections are available to customers from which platforms, even before a train rolls into the station. Environmental sensors might also enable user experience that does not require any actual user interactions. One example would be smart electricity or gas meters that provide much more frequent usage data to utility providers for billing purposes. As a result they could enable completely new tariffs based on current rather than predicted usage.

Thus, User Experience Innovation and Digital Transformation will go far beyond building web portals and simple mobile apps. Such innovation will draw in a wealth of data from sensors to enrich the user experience that will generate value, as well as improve interaction across the boundary of organisations and their customers.

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¹Sawhney M, Wolcott R C, Arroniz I (2006): The 12 Different Ways for Companies to Innovate. In MIT Sloan Management ReviewVolume 47(3): page 75-82.

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