Delivering a memorable user experience requires more than just new technology. It requires an entire digital transformation that includes adjustments to organizational structure. A new white paper published by Origence reveals the important role organizational structure plays in achieving digital transformation and delivering new technology.
Digital technology has become so prevalent in our lives, the effectiveness of digital transformation starkly affects the bottom line. According to Harvard Business Review, of the $1.3 trillion that was spent on digital transformation in 2018, about $900 billion went to waste.
How much will companies spend on digital transformation in 2020? The experts appear split on whether tech spending will increase or decrease this year as a result of the coronavirus pandemic. However, even companies hit hard economically have accelerated some digital strategies. To this point, research firm Gartner predicted in a May 2020 report that spending on cloud services will increase by 20% this year.
The Great Digital Shift
Many business leaders who had already completed successful digital transformations that included cultural and organizational changes were able to quickly transition to digital sales and work-from-home arrangements when COVID-19 shut down much of the economy. Business leaders who had previously looked at digital channels as mere technology experienced drastic changes in the way they do business.
The auto industry is a good example of the latter. CU Direct Connect President Brian Hamilton observed that digital auto sales had been available to both retailers and consumers for many years but attracted low adoption because both buyers and sellers were entrenched in the legacy in-person dealership retail models.
Well, that mindset has changed dramatically. Hamilton said digital auto sales represented less than 5% of total sales before COVID-19 shut down nonessential, in-person business. At the height of shelter-in-place orders, digital sales skyrocketed to 70% of total sales. As consumers venture back out into the world, Hamilton expects digital sales will still remain high, perhaps around 25%, because both consumers and dealers discovered they like digital sales. That means the organizational structure of dealerships will also change, shifting more resources and talent toward a digital experience.
A similar shift has occurred across all industries, including financial services. Experts say it takes an average of 66 days for a new behavior to become automatic. Stay-at-home orders in many areas lasted at least 60 days, with social distancing making in-person shopping and errands uncomfortable and inconvenient.
Transformation Doesn’t Require A Total Reorg
Silo-based organizational structures continue to rob many credit unions of their ability to transform into agile, digitally-driven organizations, said Paul Kirkbride, chief credit officer at WSECU. He noted that it wasn’t that long ago that WSECU was one of them.
Rather than completely reorganize the credit union to eliminate silos, WSECU created four cross-functional teams that work within the traditional credit union organizational structure.
These teams don’t own products but rather, focus on a member process or mode. The four teams include utilization, assistance, awareness, and acquisition.
The credit union also created a member experience department, referred to as the MX Group, which has a representative on each cross-functional team and is in charge of a “voice of the member” platform. The platform collects and reports data from member surveys and unsolicited member feedback, keeping an eye on any friction in the member journey.
New Talent Needed: MX And BI
More apps and more upgrades mean credit unions must constantly evaluate how new technology affects the member experience, which means a larger investment in MX. Texas Tech FCU has an applications team that, like WSECU’s MX Group, focuses on both the member-facing and back office functioning and processes of each app.
“You have to represent both because back-office employees tend to be very efficiency-driven, while front office people are very member experience driven,” said Lisa Huertas, Texas Tech FCU chief experience officer.
Huertas credited the credit union’s board for being early digital adopters and allowing the executive team to make necessary investments, like a business intelligence team that includes two full-time data scientists.
“Whether your technology is in-house or outsourced, data points are so critical to understand the credit union’s 360-degree view. It’s one of the most critical investments you can make,” she said. “First you have to bring it all together, then you can innovate from there.”
About the author: Bill Meyer is public relations manager for Origence, a CU Direct Brand. He has more than 20 years of public relations and communications experience in the high tech and financial services industries.
Origence, a CU Direct brand, is a financial technology provider dedicated to creating new approaches to the loan origination experience. The company’s enterprise origination solution, the Origence platform, powers mortgage, consumer, indirect, and home equity lending for financial institutions. The platform includes marketing automation and POS (point-of-sale) capabilities to deliver greater sales opportunities. For more information, visit www.origence.com.