Embedding the Moment of Service into business transformation

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In today's fast-changing world, businesses cannot afford to remain stagnant amidst volatility, uncertainty, complexity, and ambiguity. In the face of continued disruption, organizations need to adjust their business models and prioritize areas that foster business transformation.

The need for businesses to build resilience and transform their operations must see organizations invest in digitalization to improve productivity, agility and drive excellence. At IFS, we have seen countless examples of businesses go through a period of evolution as they fight to differentiate and remain competitive against competitors. IFS’s latest research shows that the benefits of digital transformation still remain untapped, as organizations must scale and advance their approach to achieve advantage and create value.

An increasing number of organizations have realized that providing excellent service is crucial for standing out from competitors, adjusting their business strategies, and achieving long-term growth and profitability. Critically, for them to achieve success, a business must orchestrate its employees, clients, and resources to effectively provide service in the Moment of Service – this pivotal moment determines whether the business will satisfy or disappoint its customers based on how it interacts with them.

The journey to business transformation

It's evident that businesses are actively implementing digital transformation processes. Reportlinker.com's latest analysis projects that the global digital transformation market will experience a 21.1% compound annual growth rate (CAGR) from 2022 to 2027, resulting in a market size of USD 1,548.9 billion.

Yet, effective digital transformation, from a vendor perspective, first requires organizations to comprehend their customers and their concerns. They should have a clear understanding of what their customers require and what changes they need to implement as a business to meet those needs.

When it comes to business transformation projects, it's crucial to start by focusing on improving the customer experience and understanding what outcomes they're willing to pay for. This is the foundation of any customer-facing business and essential for achieving a return on investment and future growth. Both of which bring organizations closer to becoming an intelligent enterprise that supports the orchestration of its people, processes, assets and customers.

Using customer experience as the focus for business transformation

To enhance the customer experience and provide excellent service, companies need to pay attention to what their customers are saying. In the case of IFS, we have applied this throughout all elements of our organization, while our cloud-native product allows us to deliver constant improvements in response to our customer needs. Thus we can differentiate our offering to meet the growing needs of our valued customer base.

This is not only good business practice but also supported by research from Gartner, which shows that gathering feedback can boost upselling and cross-selling success rates by up to 20%. Organizations can use this feedback to align their transformation outcomes with what their customers value the most. Without this insight, investing significant amounts of money, resources, and time may have little to no impact on the business or customer experience.

Nevertheless, it is crucial for businesses to understand that transformation should not be considered a one-time project. Rather, it should be viewed as an ongoing process that adapts and evolves as they innovate and meet the ever-growing expectations of their customers.

The pandemic has fundamentally changed customer expectations, causing the biggest shift in the experience economy in history as customers have become accustomed to digitally facilitated remote interactions. Whether by choice or by force, businesses have had to accelerate their digital adoption to meet these customers' shifting customer requirements. Through actively listening to their customer, businesses can begin to strategically transition temporary fixes into long-term investments, driving efficiency and growth.

One of the keys to the success of business transformation is to understand and improve customer experience. However, businesses should also be aware of stakeholder engagement, which is another vital element.

Why stakeholder buy-in matters

Securing the support of internal stakeholders is a critical part of business transformation, but it's often a step that many organizations fail to prioritize. In terms of return on investment (ROI), customer experience and critical business priorities organizations must look to strike a balance – and invest proactively in their digital transformation. Not only will this promote executive buy-in for future digital initiatives, but it will also promote an improved employee experience.

Typically, when a new technology is introduced to the workplace, it doesn't alter the way employees operate; it simply digitizes an existing process. That might involve the business focusing on implementing process automation or applying AI to improve their operational efficiency. However, when it comes to purchasing cycles that involve both replacing parts and incorporating new technology, the most important aspect is embracing the process and business model changes.

Business transformation offers organizations a chance to fundamentally alter the way they function, and people are just as crucial to this transformation as technology.

The bigger picture of business transformation

Many organizations do, in fact, listen to their customers, employees, and the wider ecosystem in which they operate, in order to gain insight to fuel their transformation efforts. Unfortunately, however, many still don’t look at the bigger picture and are instead implementing ‘quick wins’ that don’t impact the customer experience or the long-term goals of the business.

This should not come as a surprise, the continued disruption organizations across industries have faced has increased firefighting against immediate challenges. For example, manufacturers' main obstacles, such as increasing labor costs, growing costs for raw materials, and supply chain issues, have distracted the industry from differentiating their operations. McKinsey has shown that investing in digital transformation during a downturn delivers the best results. While independently, these issues are of critical of importance to manufacturers – focusing on short-term issues caused by increased volatility, and waiting for the tide to change can mean missing vital opportunities to gain a competitive edge.

Macroeconomic disruption has shown businesses that customer expectations can rapidly change. Therefore, companies should avoid prioritizing short-term gains and ‘quick wins’ and instead focus on consistently listening to customers and delivering exceptional Moments of Service to stay ahead of competitors and thrive in the digital age.