Here’s a customer service scenario that’s becoming all too common from the Chief Product Officer’s point of view; we’ll use the digitalization of energy services as a model. Just the other day, I had a particular experience with an important process: the revision of the gas heating in my house. Every five years, the gas central heating system needs to undergo a legally mandated check. The five years are up, and hence, we are due for our visit from the local authority.
Subsequently, we received a visit from our friendly mayor’s office representative. She insisted that we were never home when the company needed to gain access for the checks. According to her, the company had tried on five different occasions to perform the service. Apparently, we should have received an SMS message announcing these visits. She asked me to check if we had indeed received any of these SMSs. I showed her my mobile phone to demonstrate that I had never received any such communication.
Suddenly, my phone pinged. Pulling it out, the company had sent me five SMSs all at once informing me that they wanted to visit. With the public official standing right in front of me, I called the first company back and provided them with my information. They then informed me that they did not have any information on me with that number. I asked them how they had managed to send me several text messages and the operator was not able to tell me. Now two weeks later, my heating system is still waiting for a revision. None of the companies is currently clear who must perform it and when this will happen.
What caused this circus? Clearly, it was digitalization efforts gone awry. The company or local authority will be sending a series of automated SMS messages or emails which the customer isn’t receiving. This could be happening for a number of reasons; a poorly managed database, missing information, bottlenecks in the data pipeline, or indeed, poor communication between colleagues internally.
Although digitalization is meant to make these processes seamless, if poorly executed, it can do exactly the opposite. Sometimes this will be the result of cost-saving digital projects, which aim to reduce the number of human operators or customer service agents. However, reducing the number of humans involved as a cost-saving exercise isn’t the only objective of digitalization projects; they’re also about streamlining the user experience or gaining the competitive edge. Either way, it’s essential they work – and this often stems from balancing the human and digital factors, I believe as a Chief Product Officer.
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The three key types of digitalization and their human element
Here’s another scenario to briefly illustrate what we’re discussing: yes, we can expect that many jobs will be different in a few years. One driver is the broader use of artificial intelligence. Labour-intensive tasks will be automated not only on the factory floor but also in offices. For example, why does a lawyer need to check a contract when an AI system can check these documents a lot quicker and more closely? Does that mean the lawyer will lose their job?
As Chief Product Officer, I consider: not likely, because what happens after the AI is done checking the contract? The contract still needs to be evaluated, negotiated and agreed upon before coming into effect. Certainly, the job will change and the way companies work will be quite different even from what we can envision today. But, we need to balance the human with the digital. We’ll begin by defining three key types of digitalization projects and their crucial human elements: cost-based, user experience, and competitive projects.
1. Cost-based digitization projects
Former German Chancellor Angela Merkel once said that whatever can get digitalized, will get digitalized. It is considered a significant step forward that now, in wealthy countries at least, most office workers are able to work from home. However, this is arguably a question of infrastructure rather than “real digitalization”. But what is real digitalization?
Real digitalization is when processes are fully automated and there is no need for an individual to interfere in said processes. However, contrary to Angela Merkel’s statement, this needs to be executed with some nuance. Really, it’s high-frequency processes – the processes that are run most often in the company – that should be digitalized, as this is where real savings can happen.
Meanwhile, processes that are needed very rarely need to be reviewed. First, we should ask, “do we actually need this process?” Next, as a Chief Product Officer, you should consider how much effort the process takes to run versus how much it would cost to digitalize it. Only if the cost of running the process is higher compared to the cost of digitalization should a company consider converting it.
This is where the nuance comes in: digitalization for the sake of digitalization improves nothing. There needs to be a rigorous appraisal of the quantitative and qualitative benefits, or else, it risks creating unnecessary costs – the exact opposite intention of a cost-based digitalization project. Thus, real digitalization requires real analysis, first, by humans.
2. User experience
The example used at the beginning of this article is fairly typical of an ailing user experience-based digitalization project. Certainly, customers expect more and more processes to be digital. Now, waiting for an answer from an agent or waiting in a queue should be a thing of the past. However, a fully autonomous system isn’t always the answer – as demonstrated by the introductory example.
Here’s another scenario: a fully digital bank provides a chatbot to answer simple questions. You first need to go through this process before being connected to a service agent in that chat. Even then, as a customer, you need to again describe the issue you are facing. Many users dislike this service.
It’s understandable that fintechs need to keep costs down, but at the same time, they need to deliver on digital user experience, ensure the CPOs. You could argue that this gives the traditional bank the upper hand, but meanwhile, the user doesn’t particularly want to travel to the bank branch either. Once again, the solution lies in finding the balance between the human touch and automated customer service.
3. Competitive projects
Another important reason for digital projects is competition. A favourite example is Uber or Cabify versus traditional cab companies. Why is it so difficult for these taxi companies to provide the same user experience as Uber, Lyft or Cabify? Yes, some of these companies have responded but many have not. Would Uber have existed if the cab companies had provided similar functionality in an app? Probably not. Therefore, the challenge of every company in this respect is to identify the challengers and identify potential disruption.
This is anything but easy, but identifying a market-changing disruptor requires human intuition. Imagine you were an automotive CEO a few years ago. You would have looked at a Tesla Model S knowing that the company was still struggling with production quality. Meanwhile, nobody was really convinced that electric vehicles were the future. Cue much greater awareness around climate concerns, which ultimately, is driven by empathy over profit.
Today, the 18-year-old Tesla has a higher valuation than BMW, Mercedes and Volkswagen combined. The automotive industry is – like many other industries – moving towards a software-defined model not only in the name of sustainability but in the name of efficiency. This term is just another word for digitalization.
The internal challenges of digitalization
As these definitions demonstrate, digitalization – even though often aiming to go around the human factor – has a significant human factor associated with it. This is internal as well as external. Imagine you, a Chief Product Officer, are working on a process improvement project where the goal is to build a fully digital process that does not need human interaction. When implementing such a project, you will need to get support from the people performing this process now. How likely are they to provide support if they fear for their job?
Organisational buy-in: A case study
Most successful digital projects will result in organisational changes over time that nurture buy-in. A very successful example was with a B2B telecommunications organisation. Their challenge was that the processes to provide fibre products to their customers – which are quite demanding regarding all the information needed, as well as close interaction with customers during the installation phase – were failing. They had a tremendous backlog of orders and that backlog kept increasing.
The first order of business for the newly hired Chief Product Officer was to get this backlog managed. We went in to analyze where they were losing time. Several issues were quickly identified:
- Most of the data that was generated during the sales process was managed manually. Sometimes to the point where forms were filled by the sales representatives to be printed and forwarded either via paper or even fax (!).
- The customer agent in charge of inputting all the data had to go through eight different applications to obtain the necessary information. This was done via copy and paste – a very error-prone process.
- Often, the service department didn’t have all the information they needed to be able to provide the product to the customer without having to ask them. The established process meant that the service team had to go back to the customer agent, who then had to ask the sales representative. This resulted in a typical game of Chinese whispers, according to Chief Product Officer, where the expected outcome was sometimes taking months just to get the necessary information, never mind carrying out the service.
We then initiated a joint workshop with all participants. This workshop ensured all the relevant stakeholders understood the issues and were willing to accept solutions. The first fix was to get the data into a simpler format for the customer agents. Then, we brokered an agreement with the sales teams so that these agents were allowed to call the customer if data was unclear or missing.
This data was captured in a web form with a very simple user interface. The sales representatives could use this interface on their laptops while attending to customers. Finally, the customer agents had all the information needed on a single screen. However, they still had to input the data into several different systems.
The next step the Chief Product Officer introduced, was to automate this data input. The quickest fix was to use software robots. We placed another computer right next to the individual customer agents and trained them to train these robots. Once training was complete, the robot was able to copy the data automatically. Human interaction was only required if customer data was missing.
Initially, the customer agents were not fond of this idea, as they feared that the software robots would take their jobs. Once the first one realised that they were able to avoid the boring copy and paste task, they all came around. Four weeks after the first software robot was installed, the complete customer agent team was fully equipped, as ensured by the Chief Product Officer. The backlog was slowly being reduced and lead times for fibre installations were going down.
A physical restructuring to complement the digital
However, we didn’t stop there. We still had issues with the end-to-end process. Some data was still not making it across the teams, cooperation was still lacking, customers were still not getting updated on the progress of their orders in a timely manner. We realised that we needed to break up the existing vertical structures in the organisation.
This wasn’t achieved by changing the organisational structure per se, and instead, it was achieved by changing the physical configuration of the teams. Reporting lines were not altered but the desks of people and their offices were relocated. We had the respective customer agents sitting in the same office as the service agents. They were now able to directly work on the same customers. There was no need to send an email or open a trouble ticket if you could just lift your head and ask your colleague a quick question.
Calls to customers often happened together with both parties present. Not only were we able to completely eliminate the backlog, but customer satisfaction improved significantly. After several months of this form of collaboration, the approach was implemented across the company. Now, the customer and service agents are standing in for one another, cross-training for each other’s jobs and team boundaries are being reduced. With happy customers also came more sales and more revenue per customer over time. A win-win situation for all.
Merging the human and the digital
As is perfectly illustrated by the office configuration anecdote, it takes human factors to make real digitalization work. By creating tools that streamline processes, both customers and workers are more satisfied. Customers are receiving faster service, while employees are gaining greater job satisfaction by dealing with fewer monotonous tasks. Instead, they’re taking the time to do the things that require human analysis and emotional intelligence – the really rewarding.
The key is finding the balance: identifying the causes that digitalization will authentically improve; having the intuition to identify truly disruptive products; and understanding when and how digitalization will improve user experience. Together, we can combine the human and the digital to create authentically excellent user experiences – and scenarios like those mentioned at the beginning of this article will become a thing of the past.
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