Transformation in sync: CTOs are breaking silos to inspire a new generation of customers
Today’s chief technology officers (CTOs) are channelling digital transformation efforts into improving the customer experience. But as new technologies such as virtual reality (VR) and the metaverse attract more and more attention, some are only just scratching the surface of what is possible.
New research from DBS suggests that risk aversion and talent shortages are curtailing the ambitions of too many CTOs, and that a more collaborative, cross-functional approach is key to resolving these challenges.
Better customer engagement translates into loyalty
DBS’s research, conducted with a range of senior executives across North America, Europe and Asia, reveals that almost three-quarters of CTOs are prioritising the customer experience in digital transformation. More than two-thirds say their business’ customer engagement has improved as a result of this activity.
Enhanced engagement has the potential to translate into increased spending and loyalty, says Jean Noel Lau Keng Lun, Senior Vice President Product Management at Accor.
“When customers visit the Accor website or app, the overall experience in terms of look, feel and ease of use should all be better than that of our competitors,” he says. “The way we showcase our hotels and the guest experience, including the value they are going to get from the room, have driven a significant improvement in our conversion rates.”
CTOs cross-functional approach to improving the customer experience
CTOs recognise that they should be focusing on what the customer wants and needs, rather than simply trying to push the technology to its limits. So they are working closely with colleagues across their organisations, breaking out of the technology silo to approach transformation more broadly. Around six in 10 believe that their organisation has successfully encouraged cross-functional collaboration, embedding a culture of innovation and change.
“It is about making sure that, when a customer clicks on a link, something is going to happen, and that data will flow from different systems across the company,” says Mike Hughes, Head of End-to-End Digital Commercial Excellence at energy company Schneider Electric. “We are learning about how to bring those systems together — and, therefore, how to pull the digital experience together.”
It would be misleading to suggest that improving the customer experience is straightforward. One barrier to success is that CTOs today are apprehensive about pushing transformation too far: 41 per cent in the DBS research characterise their approach as risk-averse, compared with 34 per cent of other executives. It may be that CTOs’ experience of earlier digitalisation projects makes them more sensitive to the reality of implementation challenges, or more concerned about achieving return on investment within a narrow timeframe.
To assuage such doubts, CTOs are working more closely with peers in finance, who can analyse potential digital initiatives and broader business-model change at the earliest stage of development.
The CFO for a global consumer products company points to his business’ recent shift from a wholesale model to one that is focused on direct-to-consumer sales. “Our finance team could quickly show why selling the same product directly to the consumer is a much stronger business case,” he explains. “And that was critical to this transformation.”
Effective technology needs effective talent
Another barrier that CTOs face, after fear of risk, is the skills gap. Nearly half (47 per cent) suggest that talent shortages have constrained their digital transformation activity, which is likely to intensify as organisations adopt new technologies. Amid fierce competition for the most highly skilled people, it is difficult to recruit and retain those with the expertise required for transformation.
Overcoming the skills challenge will not be easy. CTOs are making a start by building relationships with external partners and implementing talent retention initiatives, such as developing more flexible ways of working. They will need to do more, however, including upskilling their existing workforce and making the organisation a more attractive place to work.
CTOs are playing a growing role in customer engagement, and are eager to build on the progress they have made in digitalising people’s experience of the brand, but the way ahead is difficult. Where a CTO’s background in technology may once have made him or her the natural leader of any transformation project, success is coming to rely increasingly on a more collaborative, cross-functional approach.