In this two-part series, we’ll explore the marketplace shift of digital transformation, and why it’s no longer enough for modernizing enterprises.
While demands for digital transformation are not new, there are new faces in the marketplace pursuing it—experienced, decades-old enterprises looking to compete with digital-born companies. These older enterprises are chasing after the gold standard, insisting upon Google-, Facebook-, and Amazon-like customer experiences. Automation initially sparked this progressive trend, but it was the pandemic that accelerated this radical—and permanent—marketplace shift. There is no reversing course as brick-and-mortar companies rush to decentralize and digitally adapt.
Hybrid customer experiences – an amalgamation of digital and physical connections —will be the way forward. Though many people are eager to return to in-person experiences, the immediacies and flexibilities of a decentralized, digital world are equally coveted. Communities are adapting to hybrid models of living, and this extends to enterprises, too. Customers and employees alike expect a hybrid offering that combines in-person and digital experiences. As such, enterprises cannot afford to ignore the baseline expectation and delivery of modernization.
Leaders of mature enterprises may view the demand to modernize as a sign that they need to overhaul core systems, but that takes a minimum of two years, if not three to four years. The multiyear timeline for replacement leaves enterprises vulnerable, unable to keep up with shifting demands and expectations, which is why the best solution is not to replace but rather to bridge the divide between modernized digital channels and legacy systems.
By starting with the customer experience, or a customer-to-core approach, an enterprise protects its best qualities. Not all enterprises are ready for sweeping digital transformation, and the customer-to-core approach relies on reverse engineering and on creating a bridge between legacy core systems and modernized digital channels. This allows leaders to reevaluate and assess operations without causing irreversible harm to the enterprise’s identity, and simultaneously creates the opportunity to address legacy ways of thinking.
For instance, Union Pacific Railroad, one of the largest transportation companies in the United States, is continuously innovating their IT delivery infrastructure and end-user experiences. Recognizing that their complex IT management system required customization, they made strategic investments to re-platform their aging, monolithic system with a distributed one so they could pivot at the speed of customer need.
Think Customer-to-Core, Not Core-to-Customer
The core-to-customer approach, in which enterprises replace or restructure systems first, is reactive based on the volume of demands for digital transformation. Healthy modern organizations understand the perennial relationship between legacy systems, modernization and market demands—that it’s not a solvable, one-time issue, but rather a proactive and ongoing approach to bridging those gaps. Enterprises sometimes conflate the volume of demand with an immediacy to transform, but there is a considerable risk of changing too quickly by replacing core systems. A rush to transform doesn’t guarantee scalability and a successful execution. It also fails to account for the hybrid customer experience by enabling a disconnect between modernized systems and legacy ways of thinking.
When replacing core systems, enterprises do away with the good as well as the bad, meaning that they run the risk of losing distinctive brand qualities and customer experiences. They often rush the result without first taking inventory or preserving what they do well. You also can’t remove people from the process of digital transformation.
Since every digital experience is personal and unique, true transformation requires a fundamental shift in thinking. It must acknowledge how experiences translate into the personal lives of both customers and employees. The customer-to-core approach puts people first and guarantees comprehensive modernization, so that enterprises can achieve the hybrid customer experience. Learn how PK innovates hybrid experiences that are both exceptional and fundamentally human at pkglobal.com.
In the next installment of the two-part series, Venugopal will unpack how leaders can overcome legacy technologies and ways of thinking to achieve true and lasting transformation.