Every Digital strategy is shaped and motivated by business need. The desire to improve the overall customer experience and achieve competitive differentiation is a principal driver of many Digital Transformation projects. 451 Research has found that when evaluating the top drivers for digital transformation, they can be arranged in the classic Maslow’s ‘hierarchy of needs’ format, where cost efficiency and customer experience form the foundation. Why? Because they are the most critical elements that organizations need for survival and growth.

Not until businesses tackle those critical foundational elements can they achieve strategic acceleration through the increased innovation and better decision-making, followed by the value-added benefits of improved revenue streams and competitive differentiation.

Figure 1. Achieving Strategic Acceleration and Value-Added Benefits

Our global study of enterprises around the world revealed the top three ways digital transformation is a catalyst for improved customer experience:

1. Create Frictionless Experiences. Experience, not price, will be the battleground of the future. 44% of respondents to our survey said that the desire to improve the customer experience is a key foundational element of their digital transformation. To deliver better experiences for customers, businesses will prioritize investments in more intelligent digital platforms as a way to augment their legacy systems of record with frictionless systems of engagement. True systems of frictionless engagement will enable organizations to be more proactive and responsive based on context. It’s critically important for companies not only to know their customers, but also to be able to orchestrate their experiences across the customer journey. Intelligent applications are really the only way to understand, contextualize and embed data to improve business processes.

2. Leverage Contextual Intelligence for Personalization. Turning data into meaningful intelligence is crucial. Optimized customer experiences require information that is updated constantly (e.g., transactions, events, context, interactions and behaviors) and then used to determine how to best engage with customers. 41% of respondents said they want to serve customers better through the use of prescriptive insight. The amount of data – especially unstructured data – is increasing exponentially, and will continue to grow with the proliferation of new connected devices powering consumer experiences, such as wearables, mobile devices, beacons and Wi-Fi. Customer intelligence platforms will need to be designed to provide personalization and seamless user ‘journeys.’ Analytics and monitoring tools for both applications and infrastructure will be necessary to optimize experiences in real time, and security and identity management tools will be essential to ensure success.

3. Boost Business Agility. Businesses are struggling to adjust to empowered customers who demand changes that businesses must embrace; the alternative is to ask customers to adapt to company processes or technology constraints and risk losing them. Additionally, new competitive threats are not only disrupting existing business models, but they are also providing speed to market, proven agility and superior experiences. While businesses are aware of the potential of digital technologies such as cloud, IoT and intelligent software, they realize that existing applications and infrastructure must first be optimized to respond to changing customer expectations. 52% of organizations worldwide see ‘modernizing the IT infrastructure’ as one of the most effective ways to strengthen agility. The goal is to embrace new digital technologies that are more agile and help ‘future proof’ their organizations.

This year will be the tipping point where businesses come to terms with the new reality that pricing and products are no longer enough – the customer experience is paramount. In response, organizations will leverage innovative technologies to fundamentally change the way they meet customer demands. They must digitally transform their businesses to attract, win, retain and support customers by taking advantage of the latest applications, analytics and infrastructure to deliver a differentiated experience. Doing so is not a luxury, but a necessity for survival.

Editor’s Note: You can review the full findings from the CenturyLink-commissioned survey with 451 Research in the Enterprise Digital Transformation Strategies report. To learn more about CenturyLink’s capabilities as a trusted transformation partner, visit this page or contact your CenturyLink account representative.

JOIN US FOR A LIVE WEBINAR ON RETAIL TRENDS FOR CX: Join us October 10, 2017 at 11:00 AM ET / 8:00 AM PT for a live webinar where 451 Research Analyst Sheryl Kingstone and CenturyLink Strategist Sudesh Girdhari will discuss the latest trends and insights coming out of the recently completed survey of global enterprises in the retail industry.   Learn More & Register Now

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