The ROI of modernization
“We’ve always done it this way.” The most dangerous phrase in the language is attributed to Dr. Grace Hopper. Relying on legacy products to attract, engage and retain customers may seem comfortable, but maintaining the status quo is risky.
What is modernization?
It’s often very glaring, but older technologies can introduce security risks and impose limitations. Modernization involves upgrading to new solutions to easily get the analytics needed to understand, experiment with and personalize the customer journey. Modernization is your ticket to helping your organization stand out and innovate in the experience economy. It also involves simplifying your internal processes and tech stack by consolidating and connecting disparate systems. So how do we justify the investment?
How does modernization drive Return on Investment (ROI)?
There are three key strategic options associated with modernization:
1. Gain more satisfied customers for the long term
According to McKinsey, 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when it doesn’t happen. McKinsey also found that personalization is especially effective at driving repeat purchases (78%) and referrals (78%). Personalization is no longer a nice-to-have, it’s a must-have.
Organizations handcuffed by legacy tech that limits their ability to get analytics, personalize and experiment will fall behind those that are leveraging robust data capabilities to pinpoint opportunities, activate and optimize at scale. Only a modern platform can unlock customer value. If you aren’t doing it, the reality is that your competitors are.
2. Give employees and partners an experience they love
Modernizing eases the load on internal teams. Moving on-premises solutions to the cloud lifts the burden of application management and support off your IT team, so they can focus on higher value activities. Giving your marketing and digital teams a clearer picture of your customer journey allows them to home in on things they love, like experimenting with how segmentation, A/B testing and personalization can affect conversions. Increasing team agility clears the way for a whole new level of collaboration, quality and accuracy that builds a strong brand for the long term.
3. Streamline your operations with smarter spending, security and ideas
Moving to the cloud doesn’t necessarily remove costs but it does let you run your operations smarter. Dollars locked into capital expenditures (CapEx) are less fluid that those earmarked for operating expenditures (OpeEx). It’s much more difficult to shift dollars to match demand in a CapEx model. Legacy applications can put you at risk for compliance violations. Automatic upgrades and patches in the cloud mean you’re always working with the latest version of software. Freeing your operations team from managing systems opens up potential for innovation. For example, the shift from maintenance to strategy can give your IT or operations decision makers more time to focus on the employee experience and customer experience (EX/CX) roadmap and related KPIs. From there, they can measure status and map out a desired future state with modernized infrastructure.
The right approach can help you gain all three! Embarking on modernization can help organizations tap into business trends to stand out in the experience economy. Your ROI goals for modern solutions allow your business to:
- Master customer empathy and understanding. Businesses need to understand their customers to improve decision-making, assess their satisfaction and uncover issues. Using AI/ML, natural language processing (NLP) and sentiment analysis to understand customer priorities, values, behaviors and emotions is key. Businesses need to take available data from contact center calls, surveys, social media, chatbot conversations and analyze it all at scale to understand customers and take action to improve experience.
- Increase focus on customer experience. Expectations are on the rise as customers interact with best-in-class experiences from CX leaders like Amazon, Netflix or Uber. Every industry must work on getting their customer experience up even though the benchmark may be another industry. The bar for digital delight is always being raised.
- Embrace total experience. Equal effort needs to be applied to both customer experience and employee experience. There is no CX without EX and no EX without CX.
- Evolve customer communications to become real time and omnichannel conversations. Engaging with customers through their channel of choice helps ensure better responsiveness and that communications become conversations as they become bidirectional.
- Move from silos to journeys. New technologies enable agile value stream teams to break down internal silos as they organize around customer journeys that deliver impactful, high-value experiences.
- Unify personalization and content for communications and experiences to improve brand consistency and results. The digital overload is increasing the need for experience and communication relevancy and consistency. Using first party data to hyper personalize content for experiences and communications has become a must to improve conversion rates and boost company results.
Start your modernization journey
Organizations that deliver modern, data-driven experiences can stand out from competitors in a crowded digital landscape.