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The Missing Ingredient In Digital Transformation Targeting Customer Engagement

By Ashu Roy, eGain CEO

Digital transformation is an existential pursuit for organizations. According to McKinsey, most rank customer engagement as a top priority, so digital technologies are being implemented aggressively across service, sales and marketing.

This investment has significantly improved connectivity choices for customers. They can now engage with businesses, not just in person or by phone, but also across multiple digital touchpoints. For example, consumers can message many businesses using text, messaging and social channels like Facebook and WhatsApp. Expanding digital connectivity options clearly reduces the effort required for consumers to engage with businesses.

Ironically, digital connectivity improvement, in many cases, increases customers’ efforts to get relevant answers! This sounds counterintuitive. But if you consider your recent consumer experiences, you can see why. Easier digital connection drives additional customer engagement volume. And more engagement volume compounds the challenge of finding answers when the underlying brains (knowledge and guidance systems) used to find answers are siloed and use legacy technologies.

Digital consumers expect instant gratification via self-service. They reach out to businesses for help only when they absolutely need to. And when they do, they expect quick, correct responses. Lacking a modern knowledge brain, most businesses end up shuttling customers from channel to channel, serving inconsistent (and often incorrect) answers via chatbots and freshman frontline staff. More digital customer engagement connected to a poor knowledge system creates customer dissatisfaction.

Increasing user effort is not limited to consumers in an unbalanced customer engagement environment. Business associates — contact center agents, store staff and operation teams — are equally frustrated. They are pushed to the limit, acting as “human glue” across content silos and knowledge islands and irritating customers across growing digital touchpoints.

In the last 18 months of virtual work, businesses have learned a lot about their customer engagement operation, both good and bad. Most realized that employees do not particularly care for office-based work. In fact, modulo infrastructure tech issues, employees are as productive and achieve better work/life balance working from home. But now businesses are challenged in the virtual model with effectively onboarding and training new hires, as well as ensuring competency refresh for employees. Moreover, as switching costs go down in a virtual work environment, employees are less limited geographically in terms of employment options. Not surprisingly, customer service staff attrition rates are touching 50% in some industries.

According to Gartner, ROI for customer engagement digital transformation programs is stunted by poor user experience. Boards and CXOs are also taking note of the negative impact of going “digital without transformation” in customer engagement.

Getting value from digital transformation investments requires businesses to not only put in place digital connectivity (plumbing) for easier customer connection but also modernize their knowledge management to serve relevant, personalized content that flows through the plumbing.

Businesses of all sizes can benefit from building a “modern knowledge brain” to match their “digital body.” Gartner asserts that enterprises with mature digital transformation programs are nowadays investing disproportionately in next-gen knowledge management capability to feed the digital plumbing with relevant content, solution and guidance. The result of successful knowledge management programs within larger digital transformation initiatives can be stunning. Here are some examples from our clientele:

A global telco developed a knowledge-first approach to all customer engagement, realizing 35% first contact resolution improvement in service (adopted by 30,000-plus contact center agents and 5,000-plus store associates), 25-point NPS improvement and a 50% reduction in time to competence for new hires.

Beyond the strategic brand benefit, this initiative led to hundreds of millions of dollars in annual savings. And those savings were ploughed back into the business to back-shore service contact centers, which further boosted their brand image with consumers. This is not a bad ROI for a program that cost around $10 million a year.

A hyper-growth SaaS business (with over 40% top-line growth and $500 million in annual revenue) saw 60% improvement in agent confidence and 30% increase in self-service by rearchitecting their knowledge management systems and processes. This business has managed to improve its gross margin several points each year over the last three years, thanks in large part to successful automation powered by their knowledge management system.

Government agencies can dramatically improve user experience using modern knowledge management, too. A large U.S federal agency saw enthusiastic user adoption (both citizens and employees) in a pilot program focused on AI-powered virtual assistance and digital knowledge automation. The pilot won the annual agency award for impact and was granted additional funds to roll out the capability, agency-wide.

Business leaders have an opportunity to drive super-normal returns from digital transformation investments by matching digital connectivity with a modern knowledge brain. As they do so, they should keep some best practices in mind:

1. Aim high 

Establish exec sponsorship with clear three-year transformation objectives. Incremental projects like cleaning up existing knowledge capabilities and connecting multiple knowledge repositories through federation and hyperlinks is a recipe for tepid user adoption and slow demise. When done well, a modern knowledge brain can transform customer engagement in your business.

2. Avoid silos

Existing knowledge systems in organizations tend to be functionally siloed, typically embedded within functional stacks in service, sales, marketing, HR, finance, ITSM or ERP. These silos create fragmented and inconsistent user experience.

3. Technology matters

Investing in the right KM technology (with relevant expertise and encoded best-practices) can make the difference between fumbling through multi-year investments and getting quick value within a quarter.

4. Choose a good partner

A partner should provide good technology and best practice to drive enthusiastic adoption, quick value and easy innovation. Test them by insisting on a risk-free production pilot. Talk to their clients who achieved transformational results at scale and continue to innovate at speed.

For digital transformation leaders who are investing in a modern knowledge brain to match enhanced digital connect capabilities, investment returns are sustained and impressive. For the rest, there is little time to waste.

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Originally published on Forbes.com on October 4, 2021