The basis of existence of any industry or business is to serve customers in a simple way, but pick any industry and you will realize that they have all made their businesses complex for customers. For instance, the healthcare industry is meant to make people healthier and happier, but healthcare institutions end up complicated things for customers. The core purpose of the status quo of retail banks is to help customers manage their financial lives easily, but banks sit behind regulation walls and make their processes utterly complex for their customers. Recently, I published an article highlighting the complexity in banks. Knowingly or unknowingly, companies tend to make things complex for their customers and then blame business growth, regulations, market dynamics, and other factors for that very complexity. The paradox is that companies don’t even realize the complexity phenomenon until they are forced to view it due to increased competition.
In today’s hyper-connected world, customer expectations are rising like never before. Customers want a global, ongoing and seamless experience, in particular when it comes to complex products from the companies that they deal with. The moment complexity arises they start looking for alternatives. If you think about Alipay (the world’s largest online payment processor), AirbnB, Amazon, Uber, Facebook and more, you will realize that they have all simplified some complex processes, from sharing to finding to payments, and this is the fundamental reason for their success. Google’s homepage has always been pretty much the same - simple, while Twitter and Facebook make it easy to contribute content.
The established market players are under enormous pressure from the challenges of digital disruptors that are simplifying parts of traditional businesses by providing simplified customer experience, and they are making a significant impact across industries. Companies are turning to digital transformation to match the energy and innovation storming out of startups. However, in many cases companies themselves are not sure what ‘digital transformation’ means to them, as I highlighted in one of my previous blog posts.
I believe digital transformation has only one agenda: “Simplify the business.” I know it’s easier said than done, but do companies have any other option than to simplify? Just investing in digital technologies doesn’t mean that companies have achieved the “cool” nirvana. Technology is just an enabler. Businesses need to assess their current situations and offerings and look at where processes can be simplified while keeping the customer in mind. To realize the full potential of digital transformation, companies need to reduce complexity in their legacy IT systems, business processes, people, overall customer engagement, and the very basis of their existence.
Globally, companies are using digital ecosystems to simplify. For instance, DBS Bank uses a global digitized ATM platform to get value from product complexity, but without any significant increase in process complexity. Businesses have a great opportunity to simplify processes and reduce inefficiencies. Simplifying the business is no longer a 'nice to have' but rather a ‘must have’ to enhance the customer experience in order to stay competitive in the future.