The Way Forward: Digital Transformation… or Revolution?

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Posted By: Greg Ness
December 1st, 2020
5 minute read

Digital transformation projects often stall, and for a variety of reasons. Per a recent McKinsey survey, confusion and complexity top the list of challenges. Why? Maybe it’s too costly and complicated for disparate teams to transform years of technical debt into digital success. If so, could the traditional marketing platform/hub leaders be pointing us in the wrong direction? As we wrap up 2020 and look ahead to 2021, it’s time to think beyond digital transformation to a faster, more abrupt and customer-focused digital revolution, taking us from the costs of kluge to the speed and cost benefits of purpose-built omnichannel platforms.

2020: The Year of Digital Transformation or Stall?

A recent Gartner MQ report on multichannel marketing hubs cites complexity, specialized skill requirements and support issues as key shortcomings of the leaders. Not surprisingly, McKinsey found that many digital transformation projects stall. Why? Perhaps costly integrations and lock-in cobble schemes make digital transformation more confusing and costly.

This is nothing new to the tech industry. In fact, one of the most common tactics across multiple industries is for leaders to lock-in customers with layers of complexity and specializations that bind their futures to the experts on the company side who buy and manage them. The innovators then become bound to the status quo.

The market incumbents defend their position with the exact opposite strategy used to attain leadership status and create the next opening for the next innovative startup.

The irony: In 2020 we are seeing repeated transformation stalls in an industry… once dedicated to transformation. And the multichannel marketing hub leaders are a perfect example. Today they may stand for specialized, expensive and support-heavy cobbles of solutions purpose-built for the pre-digital reality that is coming to a rapid end.

Multichannel Marketing Hubs and Technical Debt

Today’s multichannel marketing hub leaders are wildly successful companies. While consumer experience tastes are quickly shifting to digital, the vendors behind some of the most widely deployed hubs are, IMHO, forcing their customers to ante up with higher costs and complexity for every new innovation.

A massive digital acceleration kicked off in Spring 2020 with remote work and online commerce, yet many organizations stalled. Digital transformation meant adding more modules to already complex assortments of older modules built for different requirements. Hence the reactions of those experiencing stalls, including insufficient resources and misalignment.

Perhaps that’s why very few market leaders survive massive disruptions. The short-term status quo is too lucrative for their employees, channel partners and shareholders. The customers lose by betting too much for too long on complex, outdated platforms purpose-built for entirely different missions.

Yet 2020 will change everything. Acceleration will become the table stakes for digital customer experience managers.

The martech digital revolution will closely track the current fintech revolution by simplifying and personalizing omnichannel engagement at scale and accelerating transformation. Yet that is the opposite of what the surveys suggest is happening.

Reflecting on more than twenty years in Silicon Valley, I predict stalled digital transformation projects will increase turnover in the c-suite, from CMOs to COOs; and the fortunes of the market leaders slowing transformation with complexity will sink into obscurity. New innovators will appear, as in fintech, that will make customer experience faster and easier and cheaper.

Marketing Automation Platforms, Easier but Mostly Email-based
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Marketing automation vendors have been more restrained when it comes to complexity. In one of my pre-IPO marketing gigs we had two people on our team dedicated to “extracting full value” out of our marketing automation platform and paid annually to get them re-certified.

Years later at another startup we chose a simpler platform which only needed one external consultant on a monthly basis to build the simplest reports (never mind some of the very cool funnel analytics they sold us on). We could choose from a growing certified ecosystem to help us along the way.

Most marketing automation platforms are not multichannel and still rely upon various types of static web pages (sometimes with considerable kluge) for “shallow” customer experience journeys. Email is getting tired and engaging with text and video really requires more knowledge of the individual, especially for high value customers.

Again, the burden is shifted to the customer to integrate more advanced capabilities and pay off the vendor’s technical debt. But do you want to engage your customers with email and static web pages as digital tastes evolve even faster in 2021? Probably not. So, you’re still looking at potential transformation stall.

IT versus Customer First Innovation

If you’re bogged down in the transformation have your team clarify the mission. Is it to extract more value out of smart historical investments or position yourself for a customer-centric approach that may require a forklift? How much more should you spend (and wait) to build every campaign or install yet another module?

If customer needs are driving the digital acceleration, shouldn’t sales, marketing and operations be among the drivers? Legacy retrofits are certainly an option, but ongoing tech debt should be balanced against the cost and agility benefits of deploying new purpose-built digital customer experience platforms.

The CIO Should Lead the Charge Forward… Not Backward

The CIO should be involved as a key leader and support a new platform if the business advantages over kluge are significant. The legacy platform may be already too complex and costly to transform. Some CIOs defend their team at any cost. And that might be part of the digital transformation problem. Why stall if you can soar?

The best way to accelerate is to focus on customer needs and expectations first without wasting time and money on costly legacy retrofits.

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Compare what you can build versus buy. Determine what gets you in the game as habits shift, so you can monetize while your competitors cobble tech-heavy legacy platforms and slowly fall behind.

Digital Transformation or Revolution?

Maybe thinking in terms of digital transformation is part of the problem. It is certainly what the leading vendors want. Transforming outdated systems into digital systems, however, may be too complex and expensive. Instead, maybe we should be thinking in terms of digital revolution? The choice in some areas may be clear: 1) purpose-built, elegant architectures built for omnichannel digital experiences versus 2) complex architectures which require specializations, integrations, certifications and heavy support costs to deliver yesterday’s experiences to increasingly demanding consumers.

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