Razorfish Intelligent Platforms Series: Business Transformation Through Software Innovation

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1 Razorfish Intelligent Platforms Series: Business Transformation Through Software Innovation

2 02 Business Transformation Through Software Innovation Business Transformation Through Software Innovation The Trend Just a few short years after its launch, Uber is valued at over $51 billion. Its concept was not a gradual shift in transportation business models it rapidly leapfrogged the competition by using software to seamlessly connect drivers and riders. Software innovation is now a fundamental business differentiator and growth driver for customer-focused business leaders. Companies in all sectors are looking to capitalize on software to transform their existing customer experience, drive organizational change, launch new services, or reinvent their business model. In this point-of-view piece, Razorfish looks at: 01. The Trends Driving Software- Based Transformation 02. Qualities of Successful Software-Powered Businesses 03. A Software-Powered Business Example 04. Recommended Strategies for Software-Based Transformation

3 03 The Trends Driving Software-Based Transformation The Trends Driving Software-Based Transformation There are a variety of ways a brand can transform its business using software-based innovation. In some cases, software is changing how businesses work internally, making them more efficient. In other instances, software is driving customer-facing innovation. Here are some of the most noteworthy trends driving software-based business transformation. An explosion of customer data has created new opportunities for the brands that know how to use it With more consumer activity occurring within digital channels, brands can connect the dots and leverage the data from those interactions to paint a complete picture of their customers. As Flurry analytics showed us in 2014, customers are looking at their mobile phones more than any other screen for the first time in history. Understanding data about where customers are or what their preferences are is a business-altering opportunity to connect and sell in a more relevant way. Software is critical to being able to understand and then quickly act on that data. The economy has gone digital Consumers spend a tremendous amount of money through digital channels, and we are still early in that trend. This makes it easier to justify big investments in software-based business initiatives that enable these digital channels. In fact, we are at the point where not investing becomes a substantial liability. Lower barriers to entry means new competition is forcing industry change Software-based disruptors in many industries have no physical products, no taxis, and no hotel rooms; they don t have distribution centers and are not carried in retail stores. In short, new business models enabled through software (think Airbnb or other sharing economy sites) are relatively easy to launch and grow rapidly. Legacy differentiators like a well-established distribution network may become irrelevant when a customer can buy a product on Amazon and have it delivered the same day. In this new world, larger, established players have to prioritize their own software-powered businesses to maintain market share. Customers have higher expectations As consumers have more relevant and memorable experiences, they begin to expect the same from other brands, regardless of the industry. Apple, Google, and Microsoft are setting the expectation that mobile devices reply to our voices, know when we arrive home, and respond in a timely fashion. Google Now tells users when they are running late to a meeting because of traffic. Software is critical in delivering the relevant, contextualized, and timely experiences consumers want and increasingly expect. Businesses need a feedback loop With the marketing landscape, digital technology, and industry dynamics changing so rapidly, businesses need a foundation through which they can quickly determine how well they are meeting customer needs. Software enables real-time customer interaction and provides feedback that will constantly optimize the customers experience and the business. Companies that ignore software opportunities are failing With traditional differentiation gone, and disruptive competitors using data and software to build their business completely around customer intelligence, every business needs to be prepared to leverage software to transform the business and exceed customer expectations. If they don t, they can look to Blockbuster or the taxi industry for a glimpse into their future.

4 Qualities of Successful Software-Powered Businesses 04 Qualities of Successful Software-Powered Businesses There are several important qualities of successful software-powered businesses: that disruptive startups are building and differentiating their businesses on. An obsessive desire to understand the customer better Mobile native mindset Mobile is where all customers start and end brand To be transformative, software has to solve a real customer interactions, so mobile access is guaranteed to be a need. All different levels of the organization, from business critical part of any differentiation enabled by software leaders to marketing, commerce teams, technologists, and today. All technology should be built thinking about how user experience designers, need to have an obsessive customers will access content now and in the future via focus on understanding customer needs and exceeding different screens. their expectations. A big-picture software vision An awareness of customer needs and a desire to improve things won t matter if a brand s enterprise technology architecture is severely limiting. For example, a lack of vision might create barriers such as platforms that cannot talk to one another, data that cannot be shared across platforms, or technology that is implemented in a non-scalable way. To be successful, the vision needs to be a modern approach to software development iterative, rapid, integrated, etc. These are the technical foundations Informed and iterative Brands like Amazon and Netflix are constantly improving the software-driven experiences that make them successful. Most importantly, they do so using data that helps them identify things like which algorithms are most effective. Being iterative is not about throwing everything at the wall and seeing what sticks. Software-based businesses can make informed decisions quickly. To be transformative, software has to solve a real customer need.

5 A Software-Powered Business Example 05 A SoftwarePowered Business Example Delta.com At Delta, our client recognized that every touchpoint is a digital opportunity, whether on the phone, at the airport, or walking down the street. As part of our redesign across all channels, the Razorfish and Delta teams leveraged customer data to help inform every aspect of the design. For the website, we leveraged real-time data and innovative software to dynamically serve content, offers, and upgrades. The combination of a customer-obsessed mindset, a strong data and software vision, and the right software tools helped Delta to build differentiated experiences that have become a strategic business advantage.

6 06 Recommended Strategies for Software-Based Transformation Recommended Strategies for Software-Based Transformation Brands that want to better leverage software to transform their business should: Start by finding the greatest opportunities for software to have an impact Are customers needs being met across each stage of the journey? Are there glaring areas where an experience is failing customers and losing money? Are new competitors introducing disruptive ways to interact with customers? Answering these questions will help define what type of software will be core to an existing business s software-based transformation. It could be a commerce platform, an integrated CRM system, a mobile app, or a web content management platform that enables greater personalization for customers. Identify and address shortand long-term technology trouble areas The easiest way to get internal support for an initiative is if it is a recognized priority or problem area that needs to be addressed. There are inevitably going to be many simultaneous technology initiatives, both large and small, at any given time in most large businesses. Look at the small- and large-scale technology problem areas that exist in the business and see if there is a connection between those and the areas identified earlier that are ripe for softwarebased transformation. Even smaller initiatives like frequent website updates can create an opportunity to meet customer needs more quickly with an innovative approach to web software management. Large-scale initiatives like a commerce replatform will almost certainly have a connection to customer pain points during the purchase process that can be resolved as part of a larger software transformation. Make data the driver of more intelligent software Data and customer intelligence serve as the driver, while software is the engine. As a result, data from any source should be housed in a common location and format, and should be technology agnostic, meaning it can be leveraged to make every piece of enterprise technology smarter. Invest in the data warehousing and automation infrastructure that are needed to make data useful and easy to plug in to any platform. Create systems of engagement and systems of record We have seen the industry continue to encourage organizations to recognize the different architectures and speeds required by IT organizations to meet modern needs. Geoffrey Moore and Forrester Research have talked about it as systems of engagement and systems of record. Gartner has often referred to it similarly as bi-modal IT. Consumers do not care how you are delivering the experience they need,

7 07 Recommended Strategies for Software-Based Transformation and they certainly don t care about your organizational structure. They care about better, timely, and relevant experiences. However, many software processes are built around software efficiency goals, not customer experience goals. The many disparate parts and pieces working behind the scenes need to be part of a common system talking to one another and working to get customers what they need in a seamless and memorable way. Creating this common system requires having the long-term technology vision, as well as an enterprise reference architecture built around decoupling systems of record, which don t change frequently, and systems of experiences, which are constantly changing. Underpinning the entire architecture is a single source of truth around customer data. Razorfish has created the NEXUS Customer Intelligence Marketing OS as a framework for a broader system of engagement. NEXUS OS runs alongside customers core application architecture, constantly feeding real-time, high-frequency insights. Adopt a DevOps approach to continuous software development A DevOps method of software development emphasizes collaboration, communication, automation, testing, and measurement. At Razorfish, we have created a reference architecture for DevOps-enabled platforms that can rapidly iterate. There are also many open-source platforms and architectures that an organization can adopt and apply to its own enterprise to help expedite the speed and improve the quality of development. Look to the sky Software-enabled infrastructures, or cloud computing, enable brands and their agencies to rapidly release code, reduce costs, and speed time to market and provide a massive platform for innovation. If you aren t already, you should be looking for ways to leverage the cloud to enhance your infrastructure. Create a more modern and agile technology organization Moving from a traditional software approach to a more agile and iterative approach is a transition for large organizations. At Razorfish, we have had success using a model we call Agile+, which builds on traditional scrum models by including creative and user experience teams throughout the software development process. While many software engineers are likely already familiar with an iterative approach, workshops and cross-team training sessions are a good way to help teams focus and get more accomplished in less time. Software-enabled infrastructures provide a massive platform for innovation.

8 08 Contact Us Contact Us Motivated and inspired by what s next, Razorfish helps its clients navigate the unknown, drive change, and transform business. This content series is designed to help brands achieve customer-obsessed business transformation, with a special focus on the core pillars of Customer Experience Innovation, Participation Marketing, Ubiquitous Commerce, and Intelligent Platforms. For more content, visit Razorfish.com. With specific questions about Razorfish s Intelligent Platforms solutions, contact: Ray Velez Chief Technology Officer Ray is a globally recognized business and technology leader who frequently speaks at industry events and works with clients to transform their businesses by leveraging innovative software.

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