Closed-loop Digital Business Model

Ardeshir Pezeshki, Practice Director and Client Consulting Partner, Business Transformation and BPMS Functional Architecture, Wipro Technologies
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Ardeshir Pezeshki, Practice Director and Client Consulting Partner, Business Transformation and BPMS Functional Architecture, Wipro Technologies

In the recent years, organizations have undergone massive efforts to define self-differentiating digital strategies and consequently, have allocated significant amounts of resources to implement such strategies. This type of undertaking is not limited to any specific industry sector, organization type, or geographical region. Such effort is seen almost in all organizations in some form and fashion,all based on one commonly-stated objective of satisfying the demands of their customers/constituencies as they relate to digital interaction and next-generation delivery of quality services.

“Using the defined technical reference architecture for digital organizations, entities can identify their missing pieces of technologies in order to prioritize and formulate a sensible roadmap for achieving their ‘Digital Business Strategy’”

The study of numerous entities has revealed that more often than not, the organizations’ “digital” strategies areprimarily focused on their front-end interaction with their clients/customers. As such, the organizations have been spending millions of dollars in revamping of their IT interaction layers (in both internal and external fronts), without much attention to digitization of the back-office operations.

In today’s complex and competitive business and market landscape, a viable “Digital Business Model” shall address three major aspects at minimum: 
  • End-to-end customer experience
  • Operational Effectiveness
  • Customer Insight

A close and operational view into these tenets (as illustrated in Diagram A) reveals that all three tracks intersect at the business process management (BPM) level.

Let us briefly look at each of these tenets. An end-to-end customer experience starts with customers (i) initiating search to identify the specific products and/or services which they need, and once identified, (ii) making acquisition decisions based on their individual buying criteria and potentially placing their orders for such products and/or services, and ultimately, (iii) eagerly awaitingthe delivery of their orders. I hope you would agree that BPM acts as the foundation for proper receipt and fulfillment of customer orders. Customers in this day and age require visibility into their ordered products/services and require real-time order status as/when they need it. “Let me check on your order and I will get back to you within 24 hours” is no longer acceptable by customers!

Operational effectiveness is a very important (if not the most important) aspect during the course of conducting a business transaction. It is of outmost importance since it has a high impact on customer experience and customer satisfaction. Customers generally grade their provider organizations based on their personal experience of how the entities fulfilled their orders. Customers can make fairly-accurate assessment of the operational effectives of the provider organizations simply based on their personal experience of how the entities satisfied their product/service delivery expectations. Successful fulfillment of customer orders very much depends on the organization’s effective optimization of end-to-end operations. In fact, one of the main reasons for implementation of BPMS platform in an organization is to ensure achievement of optimal and consistent customer experience and satisfaction.

In today’s competitive and digital marketplace, ability to identify prospective customers and to proactively reach out to them by offering need-based products/services has gained a great level of importance. This requires an organizational ability to gain quick insight into customers’ needs, followed by the ability to package need-based products and services to offer to them while they are still interested and are engaged in communication during the short cycles of presales. Such insight will continue to hold its value even post sale if such information is made available cross-functionally and is used properly to recommend complementary products and services later on.

BPM as an operational philosophy, and BPMS (Business Process Management Suite) as the enabling class of technology for BPM, are well positioned to bring together all the pieces of a “digital” strategy in a cohesive and closed-loop manner. BPMS essentially bridges the “digital” gap that generally exists between (i) the upfront initiation activities which are performed using different classes of technologies such as eCommerce, Analytics, IoT, etc. and (ii) the tail-end order fulfillment/closing activities which are performed using different classes oftechnologies such as ERP (Enterprise Resource Planning), PSA (Professional Services Automation), etc. If implemented properly, BPMS enables cross-functional continuity within an organization and as such, it closes the loop in a “digital business model.”

Technical Reference Architecture for Digital Operations

Having highlighted the importance of including BPMStechnology as part of a “digital” strategy, the resulting question perhaps will be: “how do all different pieces in a ‘Digital Business Model’ come together?” The Diagram B is designed to illustrate a generic Technical Reference Architecture (TRA) for a digital organization.

The depictedgenericTRA is designed to provide an all-inclusive, all-scenario, and high-level-view “digital” blueprint.

Best Practice for Formulation of Digital Strategy

In order to formulate a viable and self-differentiatingTRA, an organization shall start with the generic TRA as a baseline. The organization shall then modify the generic blueprint based on its own unique business and operational model in order to derive at a suitable custom TRA.

Subsequently, the entity shall take an inventory of all existing technologies which are implemented within the organization. The entity must assess its grand list of technologies in order to identify the list of technologies which are believed to be suitable for the organization’s future “digital” vision. Using this information and by mapping the suitable list of technologies to its custom TRA, the entity will be able to identify the missing pieces of technology. Using this new list of needed technologies, the organization can ultimately prioritize and formulate a sensible roadmapfor achieving its“Digital Business Strategy.”

Conclusion

In closing, it is noteworthy to reiterate that an optimal “Closed-Loop Digital Business Model” is one that is formulated and implemented based on the “needs” and the “wants” of the customers. Irrespective of industry sector and regardless of organization type, customers’ expectations generally revolve around ease of doing business and receiving quality products and/or services expeditiously “the first time around.” BPMS technologies, if designed and implemented effectively, will provide the required platform to please customers on both operational and delivery fronts in today’s digital world.

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