In FPOV’s recently released HUMALOGY® Trends Report, we discovered, among many other things, that only 10% of leaders believe their organizations have a digital halo.
This was one of the many statistics that stood out in our inaugural HUMALOGY® Trends Report, which polled thousands of leaders across various industries to understand how technology and digital tools impact organizations and individuals.
We define a digital halo as an organization that uses digital tools so effectively that constituents choose to use the organization’s services because of this effectiveness.
This means that only 10% of leaders feel that their organization delivers a digital experience so effectively that customers choose to use it. Most leaders we polled found their digital capabilities to be average, although 60% of leaders desired to be leading edge with the type of services they deliver.
This suggests that leaders understand they must be above their competition in the delivery of digital services, but that they are struggling with how to achieve this. 50% of leaders said that constituents might choose larger, or more digitally capable, institutions because of their digital capabilities.
Digital experience is increasingly important in both customer service and in back-office process efficiency. The recent pandemic accelerated a trend toward the use of digital tools in all facets of daily life, including in areas that were once conducted exclusively without digital tools.
When it comes to achieving a digital halo, one might consider customer experience. This could be the functionality of a mobile application, the ability of an organization to conduct online marketing, the way an organization uses data to harness insights to serve a customer better, or the attractiveness and utility of a website. Yes, these are all important. However, none of these are possible without the presence of a well-designed digital backbone.
We define the digital backbone as an organization’s core technology systems and how these systems fit into an organization. This not only includes traditional enterprise architecture but also the people, processes, and technology of an organization. Core systems that run the organization such as enterprise resource planning, database management systems, and customer relationship management tools are often the lifeblood of organizations. If they are outdated or inefficient, this can cause employee and customer frustration as well as competitive ineffectiveness.
Achieving a digital halo cannot be possible without a modernized digital backbone. The HUMALOGY® Trends Report discovered that only 5% of leaders believe their digital backbone is sufficient. Meanwhile, 26% admitted that their organization does not use half of the capabilities that their digital backbone offers them. 45% said that usage of any existing digital backbone is completely dependent on the team member’s willingness to use it.
Modernizing your digital backbone is not an easy process to undertake. It will likely take years, depending on the level of improvement required. Often, we are talking about legacy systems that may need to be replaced with something more modern. These systems, as mentioned above, are often the engine that runs an entire organization. Think about what it would be like to replace the entire engine of your car. Now, compare that to the digital infrastructure of your organization. A big project, indeed!
We break a major modernization project into five stages:
Stage 1: IDENTIFY & STRATEGIZE
In this stage, we must make an informed decision on whether the modernization could or should be undertaken. This is not a “prevailing winds,” “because our competitors are doing it,” type of decision. The decision to undertake a major modernization project needs to have fertile ground to be successful and flourish. This requires a deep dive into your people, processes, and technology to understand how receptive all these areas of your organization would be to this transformation.
Stage 2: MEMORIALIZE & REALIZE
Here, we need to understand what are the requirements that your organization has to modernize and how the current market capabilities can meet those requirements. We do this through understanding process inefficiencies (waste walks), existing issues, risks, and opportunities, and a comprehensive review of your current technology infrastructure (enterprise architecture), process owners, and processes.
Stage 3: SOLUTION & MODERNIZE
After uncovering the market capabilities, we must decide the best capability for the organization. This could be a decision to build a capability, but more than likely it will mean purchasing the capability or different capabilities of major software vendors, depending on the scope of the modernization project. This requires the development of an RFP based on requirements, scoring vendor responses, holding comprehensive vendor demos to test capabilities based on requirements, and ultimately selecting a vendor and negotiating the contract.
Stage 4: IMPLEMENT & MONETIZE
This stage of a modernization project is often the most overlooked. When an organization makes a major software decision, they can neglect implementation. It is easy to just plug it in and forget all the hard work it took to choose a vendor and sign the contract. For instance, our HUMALOGY® Trends Report found that a quarter of respondents only use half of the capabilities of the digital tools they have and nearly half said that usage is completely dependent on team members’ willingness to use the tools. This is why it is not only important to test the tool and ensure you have the right people using the tool, but that you are implementing the proper training, so your team members understand HOW to best use the new capability to improve their output and create a digital halo for customers.
Leaders understand that they need to develop a digital halo. Often, they struggle with how to get there. A flashy new mobile app or website redesign is nice. But sometimes, creating a digital halo goes deeper. You must dig into the guts of your organization, pull out some pipes, and replace them with new ones. It’s never fun to rip out the walls and replace the pipes in your house, but it’s even less fun experiencing water damage and mold from neglected leaky pipes.
Improving your organization’s digital backbone will ensure that your organization can effectively modernize and lay the groundwork toward developing a digital halo within your organization.
About the Author
Chad Noland is the Modernization Practice Lead for FPOV. Chad has spent much of his career serving as a liaison between the business customer and IT. Cultivating strong relationships with both the customer and IT development teams allows Chad to produce technology solutions in complex and volatile environments. Learn more about Chad Noland.