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Blog posted by: Mark Smalley – IT management consultant and trainer, 01 March 2019.

‘Digital’ is about customer experience and value

For better and for worse, the societal, political and economic impact of information technology is unprecedented. As citizens and consumers, technology has made our life so much easier that it’s giving organizations a hard time. They can’t earn and maintain our loyalty if they don’t offer an attractive experience. So almost all organizations are now digital, in some way or another.

Technology makes it possible to engage and enable customers significantly differently. ‘Digital’ is a customer-centric value proposition that redefines a business — and sometimes even entire industries.

The more digital the organization, the higher the need for:

• strategically effective investment in digital technology
• quick return on the digital investment
• highly resilient digital products and services
• effective co-creation of value with their consumer.

Digital transformation and IT transformation go hand in hand

For many organizations, these higher needs trigger two kinds of transformation. Digital transformation changes what the organization does with digital technology. IT transformation changes how the organization provides digital products and services. These usually go hand in hand: digital transformation places higher demands on IT, so IT transformation is needed. In both cases, the operating model needs to change. Operating models are the blueprints for these transformations – they describe the building blocks of an organization and the relationships between them. They are visual depictions of how an organization provides their value propositions. Some parts of the transformation can be planned but others emerge organically – that’s the nature of complex organizations.

High velocity IT entails serious change in skills and attitude

An example of how high velocity IT asks more from practitioners is based on the important notion of co-creation of value between providers and consumers. With goods, value is created directly when the product changes hands. Services are different. Both provider and consumer have roles to play. With digital products and services, value is only realized when the users act on decisions that have been improved by the information they have derived from the digital products. If nobody acts, no value is realized. So, value is co-created by both parties. Because of the significant value of digital products, the service provider has to be more aware of what the consumer is feeling and doing, and has to react accordingly. This implies that practitioners have enough empathy to better understand the consumer. It also implies that they have enough authority, competence and confidence to give the consumer the right kind of experience.

And to makes things more challenging, the customer experience when dealing with people should not only be attractive in its own right but also consistent with the organization’s digital experience. Some organizations get it right, but many fail in either the physical or the digital experience. This disjointed experience leads to lost revenue and customers.

High velocity IT offers high returns, but demands high investment and high risk

Depending on how much faster the organization wants to move, this can entail high investment, cultural change and transformational risk. High velocity IT offers high returns, but this comes at a price – high investment and risk. Some organizations would like to increase the velocity but currently can’t justify the investment and risk. Other organizations don’t need the benefits of high velocity IT because the rest of the business operates – consciously – at a different pace. High velocity IT only makes sense when the digital part of the organization has to move at the same pace.

ITIL 4, the most recent ITIL update, aims to help organizations co-create value with their customers. ITIL 4 will also have specific content covering high velocity IT due to be released later in 2019.

Read Mark Smalley’s white paper, ITIL 4 and Fast Value Co-creation.