Three-Quarters of Companies Say There’s a Gap Between What Customers Want and What Businesses Can Deliver
Digital transformation has failed to prepare most businesses to meet the demands of their customers. That’s the key finding of new research published by digital product consultancy Netcel and digital experience platform provider Optimizely, in partnership with London Research. Almost three-quarters of respondents (71%) agree there’s a gap between the digital experiences customers expect, and the ability of companies to meet those expectations.
This finding is published in Bridging the Digital Execution Gap. It also reveals that a big part of the problem is the persistent sense that digital transformation is a matter of changing to new technology, rather than changing the business to make best use of new technology.
Almost three-quarters of respondents (73%) said improving their overall technology infrastructure was a relevant area of digital transformation for their organization. This compares to 59% who said the ongoing evolution of the business to capitalize on digital opportunities was relevant.
Just under half (46%) said the same about the changing of organizational culture and behavior so that technology can be embraced.
Netcel’s strategy director Dom Graveson and CTO Justin Masters, the report’s authors, argue that in today’s rapidly evolving digital landscape, the gap between customer expectations and digital experience execution has become a critical challenge for organizations worldwide.
Many organizations are struggling to turn their digital ambitions into tangible, measurable benefits.
“Our hypothesis is that this gap is driven by uncertainty and deficiencies relating to strategic plans, the user experience, technology and tools, people and processes, and how data is used to measure and deliver high-performing digital products.”
Digital Transformation – Out. Digital Agility – In.
The report builds on previous research from Netcel, Optimizely and London Research in 2022. It was published as From Digital Transformation to Digital Evolution: Survival of the Quickest. It aimed to replace the idea of digital transformation with digital agility.
This describes a state of preparedness that allows businesses to evolve quickly and efficiently to take advantage of technology-driven changes in customer demand and competitor behavior. Graveson and Masters argue that focusing on transformation rather than agility is a key cause of the digital execution gap.
Neil Perkin, digital consultant and author of Agile Marketing, is quoted in the new report.
“Becoming a ‘digital business’ means being able to operate effectively in environments of high uncertainty,” he says. “Digital transformation is not a journey from A to B. Rather, it’s a transition to a new operating system, which itself is characterized by continuous change.”
The Digital Execution Gap in Context
The report puts the digital execution gap in the context of political and economic uncertainty, climate breakdown and falling customer confidence. Respondents said their three highest priorities are retaining customers, becoming more sustainable, and reducing costs.
As the authors observe, this probably doesn’t mean it feels like a good time to take risks. But it does create a suitable environment to build the foundation for digital agility.
This foundation, the report suggests, means thinking in terms of three elements:
- People – teams, skills, capabilities, personalities and culture;
- Process – tooling, methodologies, ways of working, governance and resources;
- Platform – CMS, data, CRM, integration and appropriate architecture.
“You can’t expect sustained success without a balanced combination of all three,” Graveson and Masters say. “But the magic comes from precisely the right blend. This will differ for every organization.”
The resulting business, they argue, will have a culture of experimentation. It will also have management and governance that encourages flexibility, and an overriding focus on the customer.
Measurement Matters
The authors also stress the importance of being able to measure the success of the business’s digital initiatives. Over half of respondents (52%) strongly agree they have baseline metrics in place to do this.
Slightly fewer agree they can map digital spend to ROI, or attribute impact on the organization to the value of each digital outcome (49%). Fewer still (46%) strongly agree they’re focused on measurement as part of a test-and-learn approach.
But looking at the metrics respondents use shows little change since 2022. The most important is customer experience, followed by operational efficiencies. Revenues, customer loyalty, and cost reduction make up the rest of the top five.
This suggests that organizations are still not focused enough on digital as a driver of business success. As the authors point out, a business doesn’t need a good customer experience for its own sake. It needs a good customer experience to deliver a desired business outcome.
The full report – Bridging the Digital Execution Gap; Keeping Pace with Customer Expectations, Technology Advances, and a Fast-Moving Economic Landscape – is now available for download.