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  • Madeline Weiss, Director

ZERO-BASED DIGITAL TRANSFORMATION DESIGN

Updated: May 30, 2023


“If I had asked people what they wanted, they would have said faster horses.” As you know, Henry Ford delivered automobiles instead of faster horses. Today’s equivalent of providing faster horses would be leveraging technological tools for incremental improvement over current offerings that would buy your company some time, but not necessarily longer-term competitive advantage.


Many of the researchers at last year’s Advanced Practices Council meetings cautioned against taking the faster horses approach in favor of zero-based design for digital transformation.


Scaling Machine Learning

Dr. Sam Ransbotham presented multiple examples of thinking differently about enhancing customer experience. Instead of using AI chatbots to answer customer questions, Fidelity, HSBC and Barclay recognized that customers prefer to speak to humans. While humans answer customer questions, they use AI to validate the customer’s credentials through assessing line latency (calling from California?) and matching voice prints with previous ones.


Developing a Digital Mindset

Dr. Didier Bonnet showed how Leyeju Smart Hotels in China have reinvented the customer experience to go beyond the typical technology-enabled conveniences such as check-in and coded door entry. Robots escort you to your room, where such functions as lighting and temperature control are voice controlled. He showed how some restaurants use technology to help customers meet the chef, learn about food provenance, and get nutritional details. QR codes on restaurant tables facilitate no-touch customer review of menus while the restaurant create clever entries that reuse recent leftovers.


Digital Resources and the Agile Organization

Dr. Gabriele Piccoli reported on companies that consistently question ways to make customer interactions faster, easier, and better. BBVA, a global Spanish financial group, combines all the data needed for the customer to get approved for an auto loan or mortgage on the spot. McDonalds created a meal-making digital capability for order taking and fulfillment via a digital interface. Each order goes to a cloud service on AWS infrastructure for evaluation and routing to the correct restaurant. The module manages all aspects of interaction with the customer (i.e., payment, delivery estimate). This digital capability goes beyond software to kitchen equipment and human labor.


Leading Turnarounds and Transformations

Dr. Lynda Applegate described how DTE Energy, a diversified energy company, and Vectorform, a software company, combined forces to create a technology-enabled offering to help customers on a grand scale: to create a cleaner planet. Their offering, named Powerlync, is a home energy management device that connects to the home’s electric meter to access energy consumption and rate information in real-time.


Unlocking New Digital Value Spaces

Dr. Didier Bonnet introduced three approaches for zero-based digital transformation design: transform the customer offering; transform customer engagement; and transform the reach of the offering. The customer offering can be transformed by gathering data digitally through sensors (e.g., driving patterns captured in automobiles) and through digital questionnaires (e.g., StitchFix, which sends clothing to customers through multiple phases of gathering feedback on each). Sephora transforms engagement by allowing customers to experiment with its products digitally. Vitality Health, a UK-based private medical insurance company, transforms reach through its ecosystem partners. Together, they provide products and services to customers geared to improving their health.


Zero-based digital transformation design begins with focusing on the customer. It then entails thinking differently about how the latest digital tools can be leveraged to enhance current customers’ experiences as well as how these tools and the data can be applied to create new products and services and possibly even new business models that are better positioned for future competitive advantage.

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