Digital transformation involves radically rethinking customer engagement, transforming from a product or asset orientation towards a service business, and deploying digital platforms architected for agility and change.

That’s the view of Pegasystems founder and CEO Alan Trefler who made the comments during the company’s virtual Pegaworld conference late last week.

According to Trefler, companies need to move from reactive thinking to pro-active and even pre-emptive thinking.

Pegasystems CEO Alan Trefler

“They must anticipate their customers’ individual needs and address them before they become problems. Otherwise customers go elsewhere and will be picked off by more nimble competitors.”

The shift from a product-based organisational model to a service-based one is necessary due to the need to deliver seamless and frictionless customer outcomes end to end.

“Think about traditional banking credit products, becoming multi-product credit management solutions with a credit card, the mortgage, the line of credit.  [They] all become fungible and optimized for the customer. [Think of]  car manufacturers, becoming full-service mobility providers, where a single monthly fee takes care of the car, the financing the maintenance, and the insurance.”

On the importance of digital platforms, he said, these need to be designed for open ecosystems and deployed across multi-cloud distributed environments.

“Platforms [must] able to weave together technologies from legacy data systems from Cloud-based AI services, all the way to the application developed in the house.”

And they need to do this while delivering customer, employee, and partner experiences that are streamlined and seamless, he said.

“These digital platforms won’t be the warmed-over ticketing systems relabeled as workflow, nor will they be rebranded CRM tools.”

Fundamental change

According to the Pega chief,  the winners in the future will be those who take a fundamentally different approach to their business architecture.

“Note that I’m saying, business architecture because this is way beyond technology. It is about where you define and operationalize your business logic, such that it properly empowers customer and business outcomes.  Both business and technology leaders must actively partner to ensure this architecture evolves in the right way to frame this right way.”

Trefler said he sees many organizations making the same mistake by starting top-down from their channels embedding their business and process logic into mobile apps,  chatbots, websites, and contact centers.

“This leads to disconnected and frustrating customer experiences. It also results in massive cost and time to change your customer experience. Think about the current crisis. Was it too painful or were you too slow to deploy a new customer message and your strategy to work across your channels.”

He called out the Commonwealth bank in Australia as a model of a more successful approach.

“Are you able to respond like the Commonwealth Bank of Australia, who deployed a set of empathetic offers across all its channels immediately weeks and months before other companies could even try. Organizations like CBA can move fast and stay ahead of customer needs because their business and customer logic isn’t embedded in each channel.”

He also described a second problem where companies start from the bottom, hoping that by rationalizing their systems and data they will “miraculously” become agile and efficient.

“However, your back end systems, even the new cloud-based ones are at their core pretty much just databases, built around your products or your lines of business. They have no concept of omnichannel customer journeys.”

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