Business Blog Driving your digital maturity forward: A guide on establishing digital competencies

commercetools author image Stephanie Wittmann
Stephanie Wittmann
October 2021

It all starts with the right mindset when it comes to entering a new phase of digital transformation. 

In part 2 of our new eCommerce webinar series, our guest speaker, Forrester Senior Analyst Joe Cicman, shared what Forrester believes are the six must-have digital competencies leaders need to establish and the overwhelming benefits that come with being a digitally advanced company.

Instead of asking, “Do I need headless commerce?” a better fitting question would be, “What digital competencies do I need to serve customers where they are?” During our webinar featuring Forrester, “How Headless Commerce and Digital Competencies Go Hand-in-Hand to Serve Your Customers,” Joe Cicman dove precisely into this topic. Didn’t get a chance to attend the webinar or watch the recording? Here, we provide a play-by-play of Cicman’s most unmissable advice, as well as summarize his most important insights to ensure you can flourish in your digital transformation journey.

Diving your digital maturity forward

Brand trust is based on experience

To kick-off this webinar, Cicman established how companies win their customers’ trust and, by extension, their business and loyalty. And what does it all come down to? History? Size? Mission? Guess again. The number one factor that affects customer purchasing decisions is the shopping experience, which is often technology-enabled. And it’s often the large legacy brands that suffer. That’s because they frequently work in channel silos, provide disjointed “old school” digital experiences and struggle with keeping up with the new customer landscape of steep expectations that only modern commerce solutions can bring. As a result, the overall shopping experience declines. And so does the trust.

Companies now want to sell relationships, not just products. So companies must reimagine consumer connections. Customers are demanding more of everything and better experiences of every kind. And by focusing on their motivations in a holistic way, companies are creating a new B2C world in which four forces are emerging and shaping the future of consumer buying habits in B2C: price and convenience, being able to experiment, facilitating evolving business models and value-based buying.

6 competencies let you serve customers where they are

Cicman described the six digital competencies that leaders must establish in order to drive digital experience and maturity. They are:

1. Structure:

Carve out a digital process from legacy functions in IT, marketing, commerce and product to form the most mature digital experience organization. Federate the operating model (group strategic capabilities while enabling local execution) to scale for a global organization. Centralize strategy and governance while supporting local/brand/business unit flexibility. Have a DX team backed by an executive-sponsored leadership role with adequate budget and decision-making authority with the DX team proactively recruiting and developing talent. Foster communication with partners to build digital experiences and transfer skills and expertise into the DX team.

2. Strategy:

Digital experience strategy comprises five key areas: omnichannel experience, metrics, customer data and insights, content strategy and digital transactions. Support a broad set of channels, touchpoints and experiences. Define holistic, measurable outcomes at the start of initiatives across operational, engagement and business activities. Collect, connect and integrate customer data while complying with appropriate customer data privacy regulations. Your content strategy should focus on reuse and optimization via connected repositories, composable components and content analytics. Transaction strategy enables customer self-service for initiating transactions and monitoring their status.

3. Governance:

Proactively identify standard tools and practices to ensure consistency with internal groups and external partners. Follow a documented, repeatable change management process with an executive sponsor, change agents and champions.

4. Process:

DX teams must leverage a new way of working that prevents falling back into siloes. They must fully commit to agile development methodologies. Practitioners should use tech such as CMS, DAM and PIM to iteratively plan and synchronize content and campaign efforts via design, build and release cycles. Design thinking and customer experience assets like personas and journey maps to steer technology design must be employed. Dynamically compose personalized experiences and journeys based on customer, content and transactional data sets. 

5. Technology:

Prioritize the following four elements: an API-first stack, cloud-first deployment, practitioner self-service and automation. Modern architecture will promote speed, flexibility, reusability and integration. Practitioner tools plus embedded AI features will automate operational tasks and improve efficiency.

6. Culture:

A culture of customer-obsessed, digitally driven innovation and digitally empowered employees requires top-level executive sponsorship. Note that culture remains one of the biggest and most common hurdles to digital transformation. Marketing, sales, frontline support and technology resources must work together to co-create a digital technology roadmap. Strategy is supported by the right resources and people, who understand how their performance aligns with that strategy.

Digital maturity rates since COVID-19

Next, Cicman takes a look at data collected from late 2020 about digital business maturity rates since COVID-19 descended upon the world. It turns out that businesses at an advanced stage of digital maturity are more likely to grow year over year. About 25% of North American companies are at an advanced stage of digital maturity, and of those, 53% had a revenue of 10% or higher during the first year of the pandemic. 

How did these companies thrive in one of the toughest years ever? It turns out that, contrary to other businesses being cautious and cutting their digital marketing investments, 60% of these companies went against the tide and increased their digital transformation investments by 5% or more. In fact, over half of the advanced firms saw the pandemic as a chance to increase their commanding lead in the race for digital dominance. 

And what did these companies do with the profits? They invested it in themselves and improved things like their IT capabilities for agility and innovation and improving their operational efficiency. This is in stark contrast to companies at the digital beginner stage that focused more on immediate opportunities, such as reducing costs and improving the customer experience.   

Forget about “buy” versus “build”

This brings us to the last part of Cicman’s webinar where he throws away the black and white notion of having to either buy or build your commerce platform. In fact, the whole concept of buy versus build is outdated and inaccurate. Neither exists. According to Forrester, Cicman explains, the new choices of today are “customize” or “compose.”

4 traditional build vs buy assumptions
You wouldn't build your own car from scratch. You would go and buy one. So, if you think that you want to build your own eCommerce platform, don’t. And then before you change your mind, go do some market research.
Joe Cicman

Senior Analyst, Forrester (in the webinar)

The “customize” approach means starting with a modern packaged solution and then adding configurations and extensions to receive the best solution for the business. Meanwhile, the “compose” approach starts first with a software development platform and then adds cloud services (APIs), as well as pre-packaged, visual components to reach the desired solution. Interestingly, the top motivations for companies turning to custom development are reducing their total cost of ownership and reducing complexity (customizing packaged solutions is more complex than developing in-house solutions). Forrester contends that enterprises can’t simply buy solutions anymore; they must create them using a blend of customization and composition.

In the end, Cicman has three recommendations for building a modern tech architecture. First, buy only modern SaaS suites that are easily adaptable and composable. Second, because companies must invest in more software development to succeed, hiring more, highly skilled developers is a necessity. Finally, use low-code headless models to kick-start a digital culture of continuous improvement.

There’s this thought of headless being for the big kids that I would challenge, and here’s why: how you compose solutions and have them interoperate with one another – that is a concept that is essentially modern. That’s just how modern tech is built. That’s how all modern software is built. And so rather than saying ‘Am I big enough to handle headless?’ ask yourself ‘Don't I have to have the right software anyway?’
Joe Cicman

Senior Analyst, Forrester (in the webinar)

Watch the full webinar to discover even more about the digital competencies you need to grow your business and why you can’t wait to digitally transform your business. After you’re done watching, read our recap on part 1 of our eCommerce webinar series.

commercetools author image Stephanie Wittmann
Stephanie Wittmann
October 2021

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