The expectations and demands of today's interconnected, always-on customers are driving the migration to digital business. Across all industries, businesses are adopting core digital technologies – such as cloud, mobile, social and big data – to more effectively engage these digital consumers. 
Yet a Zendesk white paper argued that despite their efforts towards customer-centricity, most businesses were falling short in delivering customer satisfaction. 73% of customers believed that businesses were exploiting their new digital capabilities more to generate sales than to provide consistent customer service. Nearly 9 in 10 customers thought businesses could do more to create a seamless and joined-up customer experience.
Understanding Digital Transformation
This damaging discrepancy in customer satisfaction originates, in many cases, in the lack of businesses’ understanding of the true nature of digital transformation.
In its study The 2014 State of Digital Transformation, the Altimeter group makes an important observation – investing in digital technologies doesn't in itself equate to digital transformation. Instead the process is about:
Uniting individual technology efforts around a common vision supported by an updated, integrated infrastructure to effectively compete as a unified business in connected markets.
Digital transformation reaches beyond technology into infrastructure, organisation and leadership with a focus on improving the entire customer experience.
What this description highlights is that digital transformation applies to all functions and processes of the business in an effort to more effectively engage digital consumers at every touchpoint in the customer experience lifecycle. Businesses that focus their digital transformation efforts solely on customer-facing functions, while leaving the back office untouched, are in effect taking one step forward and two steps back.
The Back-Office Disconnect
As businesses use digital to target and connect with customers more effectively, they raise customer expectations with the promise of frictionless journeys across channels and convenient interactions at every touchpoint. However, if the back office has not been integrated into this digital ecosystem, customers experience a jarring disconnect. Once they encounter the business's supporting operations, processes are inefficient and data is disjointed, compromising the standard of service delivery.
Statistics compiled by Capgemini from the banking sector emphasise the extent to which legacy back office systems undermine businesses' customer service standards:
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50% of paperwork submitted at account opening gets rejected
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60% of customer dissatisfaction originates in the back office
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10-20% of contact centre volumes are the result of execution issues in the back office.
Customers in the digital age interact with seamless, user-optimised interface and that’s how they perceive the organisation behind them. They don’t recognise the distinction between front office and back office. Yet where back-office digitisation is lacking, employees are hampered by manual processes, siloed data and lack of visibility into end-to-end processes. This inability to deliver on the company's promise leads to frustrated, angry customers and disengaged staff.
Digital Transformation of the Business Back Office
According to the Information Age, the digital age is defined by instant access to intuitive and user-oriented information across the organisation’s entire network of resources. To compete effectively in this environment, businesses need to relieve their back office bottlenecks by developing digital capabilities that integrate with those the front office is using to engage customers. By reviewing their back office legacy infrastructure and identifying opportunities for digitising operational tasks, information flow and documentation, businesses can profit from:
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A reduction in inefficiencies through re-engineering of business processes
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An increase in productivity in relation to customer transactions and enquiries
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The integration of back office systems, leading to a joined-up customer experience
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An end to siloed data and wasteful duplication of effort
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Instant access to back-office business information for operators to resolve customer issues quickly.
Businesses that are able to close the customer service gap by achieving operational excellence with back office digitisation will enjoy significant competitive advantage. True customer-centricity is only possible if digital transformation is applied across all business processes with the ultimate aim of delighting the customer throughout their journey.
Takeaways:
- Despite businesses adopting new digital technologies to engage their customers more effectively , most customers are dissatisfied with the overall customer experience.
- This discrepancy is in part caused by businesses failing to extend digital transformation to their back-office functions.
- A high proportion of customer dissatisfaction has its root cause in the back office.
- Digital transformation is about improving the entire customer experience, which necessarily involves back office infrastructure and processes.
- Businesses who achieve operational excellence through back-office digitisation will enjoy significant competitive advantage.