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Has digital transformation failed consumers?

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Good morning! Nothing was supposed to help improve the customer experience more than digital transformation. But as it turns out, the "magical software fix" hasn't really fixed much at all.

Consumers aren’t reaping the digital benefits

Even before the pandemic, two words seemed to dominate the vocabulary of every executive in corporate America: digital transformation.

It was inescapable. Suddenly, nearly three decades after the advent of the internet and over a decade since the first iPhone was released, companies seemed to finally realize the power of technology. And with artificial intelligence, two equally buzzy words that are now impossible to avoid, companies could finally make use of mountains of consumer data to ensure they would never miss a sale, fumble a customer service call or encounter a blip in the supply chain.

So what have billions of dollars in IT investments meant for consumers? It’s a tricky question to answer, as many of the changes to date, apart from a massive proliferation of apps, are likely invisible to the end consumer. And a lot of investments are focused on internal improvements that might cut operational costs but do nothing to improve customer interactions.

With overall customer satisfaction dipping to its lowest level since 2005 and employee productivity levels actually slowing down, it’s clear that aspects of that transformation have been overhyped both by businesses that want to impress customers and vendors eager to upsell companies on new tools to boost annual contract sizes.

  • Of course, there are factors outside of a company’s control: the Russian invasion of Ukraine, the pandemic, rising inflation and a chaotic labor market, for example.
  • All of those can affect the ability of businesses to collect proper data to use AI to guide inventory management or find the staff needed to run basic operations.
  • And as the likes of Amazon and Walmart grow even larger and outpace competitors, it becomes impossible for consumers not to expect the same level of experience at every other business.

But all the promised IT investments were at least supposed to position businesses to better respond to market-altering occurrences. Instead, companies have no idea what consumers want. And it’s paved the way for a new cycle of vendors that are all promising the magic software fix.

Still, improving the customer experience requires businesses to actually put investment toward it, not just provide lip service. And for some industries, particularly those with few competitors, it may not be worth it.

Airlines aren’t alone. Customer service across corporate America, in general, is still awful and might actually be getting worse. (It is worth noting, however, that support workers are also subject to an increasing amount of unjustified abuse from customers, which is ridiculous.)

  • Of course, software vendors spent the last decade hawking tools like chatbots that, despite lofty promises, completely failed to handle all the “simple” customer questions.
  • The system has failed so terribly that it’s not uncommon for a company customer service line to direct you to the website, only for the website to direct you to the customer service line.
  • And it always seems to be just one fix away. Even now, with all the investments to date, vendors like UiPath, which is trying to sell its own automation software, believe that companies “still don’t have visibility into what people are communicating about, and how to understand that and act on it fast.”

It is still early in the journey among most large businesses to become “tech-driven,” which helps explain why results have been lackluster.

  • These are very difficult migrations. And companies are simultaneously facing a weakening economy, shattered supply chains and ever-worsening global relations.
  • But the never-ending cascade of society-altering events isn’t slowing down. And that means businesses have to learn to adapt faster. If done thoughtfully, tech can play an important role.
As access to software becomes more democratized with the rise of the cloud, the expectation is that customer experience finally begins to serve as the key differentiator. If that’s the case, what are you going to do with all your extra time?

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