Implementing Digital Architecture: A CIO and CDO Roadmap

by Ravi Kalakota

With digital, value is migrating from outmoded business models to new business designs that are better able to satisfy customers’ priorities.

As digital permeates every nook of business, firms will need diverse set of digital leadership. CIOs who step up to a digital leadership role can expect to contribute in a number of valuable ways, perhaps even assuming the über digital role with responsibility for all things digital. Those who can’t will be relegated to play subordinates to the emerging roles of Chief Digital, Data and Analytics Officer, or to the CMO, CFO, or COO, their portfolio limited to the infrastructure and corporate systems.

People have transformed how they consume information, research products and services, make purchasing decisions and share their views and experiences.

So in every boardroom, the buzzwords are flying – omni-channel, mobile-first, digital engagement, AI-first, digital transformation, Conversational AI, multi-screen engagement, millennial marketing, digital operating models, and so on.

Every leader has a semi-clear idea of what the digital strategy needs to be (Increase digital innovation; Improve customer experience by providing access through preferred channels; and drive cost efficiencies) — but there is very little clarity/consensus in terms of how to crisply translate the digital strategy into a next gen engagement architecture and create tangible ROI.

In other words, there is a growing “knowing–doing” gap emerging.

Knowing – Doing Execution Gap

We know that execution (the how) matters. Consumers — Gen Z to Boomers — now dictate how, when and where to interact with brands and corporations and their digital expectations continue to rise.

Today, online customers expect excellence. Users assume that their online experience will be rich, engaging, personal and available from whatever channel they choose. They want a seamless experience that works flawlessly each and everytime. A disappointing experience may lead to the permanent loss of customers and damage to the reputation on social media.

So what’s the agile digital architecture that can meet or exceed customer expectations? What is the architecture that integrates disconnected consumer touchpoints. Integrating across consumer touchpoints is the foundation of a successful brand strategy.

Executing Digital – The HOW

Do we have the right business and technical architecture to make our digital experience exceptional?
How effective are we at enabling relationships over transactions?
How efficient are we at converting transactions into social conversations?

To enable the evolving customer journey, corporations face the following challenges in executing digital customer engagement strategies:

Selling Across Different Channels — Consumers expect to be able to transact through multiple sales channels without losing functionality or experience, making it important that a corporation has a single view of its business and customers.
Making Transacting Simple, Seamless and Secure — Consumers expect every interaction to be quick, problem-free, intuitive and secure.
Keeping up with the Latest Technology and Innovating— Consumers expect an experience on par with that provided by the most innovative firms. For example, social as a design principle.
Building and Growing their Brand — In a world where consumers have more choices than ever before, a vibrant brand presence is increasingly important.
Managing their Business Anytime, Anywhere — To keep pace with consumer demands, brands or divisions need to be able to manage their business on the go using their mobile devices.
Scaling the Interactions/Transactions — As business grows, it must be able to handle increased traffic/interactions and ensure availability 24 hours a day, seven days a week.

Consumers have embraced data-driven personalization, fueling the era of “me — I want it easy; I want it now; I want it when i need it.” They want seamless experiences created specifically for them (ala Uber, AirBnb, Facebook), at the absolute right moment across various touchpoints. Sounds easy enough to do but for a large corporations with a lot of legacy apps extremely difficult to execute.

As a result, it’s getting harder to tell where marketing begins and ends in a world moving toward hyper-personalization. Marketing data/systems and enterprise data/systems are merging in new, exciting, and challenging ways. This is uncharted territory CIOs and CDOs must figure out how to navigate.

Consumers expect firms to know, respect and interact with them just as consistently in the digital as the offline world. This is a shift that will enable brands to go much broader, to be where the customer is truly experiencing the brand, extending sales and marketing reach to new areas of the customer journey.

EngagementModel

Digital Customer Engagement Architecture Elements

To meet digital consumer expectations new modern architecture is required. Putting “lipstick on the pig” approach is not going to be sufficient.

Traditionally, corporations have been forced to address their digital customer engagement needs through one of two means:

Complex Software Built for Enterprise. Software like SAP or Oracle that is expensive and complex, requires significant technical knowledge and training to install and maintain, and typically takes a long time to deploy.
Cobbled Together Patchwork. Whether a corporations is starting from scratch or building on top of legacy solutions, the process of piecing together a patchwork of disparate technologies is time consuming, complicated and costly. The result is an architecture that, by its nature, lacks full integration between the applications provided by the various vendors and may only be as good as its weakest component.

New digital platform and experience layers have to be put in place to offer new solutions for how digital advertising, marketing and commerce are created, managed, executed, measured and optimized. This new front office functionality provides analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management solutions, as well as video delivery and monetization.

Figure below illustrates the different platforms and technology elements that have be fused together to enable the digital strategy.

Requirements of a World-Class Digital Architecture

What consumers do has changed dramatically creating new requirements that require cutting across fiefdoms and silos.

Omni-Channel Platform. The architecture must enable the different divisions, marketers or brands to sell, service and engage across different sales channels, including web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops. The digital platform provides the different divisions, marketers or brands with a single view of their business, combining and synchronizing all their customer, inventory, order, product, payment and other data that originate in different sales channels.
Simplified Experience across Screens. The architecture must enable the different divisions, marketers or brands to engineer an intuitive user experience that requires no significant up-front training to implement and use. By integrating multiple channels into a single platform, the architecture must remove the complexities inherent in separate systems.
Latest Technologies, Seamlessly Integrated. The architecture must be designed to integrate the latest technologies needed to sell products and operate an omni-channel retail business from any device. High-availability, continuously deployed, multi-tenant architecture are core requirements. The objective is to enable the latest features and the newest innovations continuously without downtime.
Enterprise-Level Security, Scalability and Reliability. The architecture must offer security, scalability and reliability, while at the same time being easy to use and affordable.
Open Architecture with a Thriving API Ecosystem connectivity. The architecture must be able to integrate with a rich ecosystem of app developers, theme designers and other partners. This requires the architecture functionality to be highly extensible.

Summary

How to provide the digital layer on the physical world? How do you target customers who are stationary or mobile? When are they most likely to need the brand’s service or product? Are they likely to respond to Facebook, Twitter or in-app offers?

The breadth of tools purporting to improve customer digital experience threatens to overwhelm digital strategists. The savvy enterprise will build a solid but flexible architecture and roadmap that’s “right-sized” to their capacity to execute.

Leaders who care about agility will recognize that they need to support multi-vendor architectures, and not fall victim to the over-hyped claims of vendors.

Those who don’t adapt and evolve will fall by the way-side. Cisco’s John Chambers provided some fiery predictions about digital disruption at CiscoLive 2015.

“More than one-third of businesses today will not survive the next 10 years. The only ones that will survive will turn their companies into digital versions of themselves, and many of will fail trying.

40% of businesses in this room, unfortunately, will not exist in a meaningful way in 10 years. 70% of companies would “attempt” to go digital but only 30% of those would succeed.

If I’m not making you sweat, I should be. It will become a digital world that will change our life, our health, our education, our business models at the pace of change. Either we disrupt or we get disrupted.”

Chambers is echoing what’s going on in every boardroom… leadership is exhorting their teams to not “miss a market transition and create new digital business models.”