Digital transformation is a topic many loyalty marketers preach about, but in reality, where are they in this customer engagement process?

Loyalty360 caught up with Bill Evans, Senior Director of Product Marketing, Dell Identity and Access Management, to learn more about this burgeoning topic.

How would you describe the overall state of digital transformation initiatives today?

Evans: Digital transformation is in its formative stage, in my opinion. If you were to ask me about digital transformation last year, I would have asked what you are talking about. Today, it’s taking hold. One of the barometers of the advancement of digital transformation is the creation of the CDO, or Chief Digital Officer position, and we are seeing a few organizations move in this direction.

It might be good to take a step back and define Digital Transformation. In some cases, the move begins in the “rank and file” of the organization where the marketing department might decide it needs to subscribe to the latest marketing-as-a-service. The operations department does the same. So does legal. Then, one day, a user calls the help desk because they forgot their password to SaaS app X and the helpdesk replies, “I didn’t know we had that app.”  Then Security finds out that the marketing department is moving confidential customer data to the cloud and, well, you know what happens next … security becomes the “Department of No” and has to take down access to the app.

In enlightened organizations, the C-suite or even at the board level, they see all this going on and they decide to formalize this move to the cloud, digitization, and customer-focused work and stand up a “digital transformation” initiative. That’s when they hire the CDO and begin working in earnest to transform the company digitally.

From my perspective, I believe this is but the first step in a digital transformation. That is, the first step is taking the current business model and making it more mobile, cloud-friendly, and customer-focused. The next phase, and only a handful of organizations are here in my opinion, will look to apply technology to fundamentally change the way they do business. Think Dollar Shave Club or Netflix and Blockbuster. Netflix upset the market. I think that type of change will come in many, if not most, markets and if the incumbent isn’t thinking how to transform digitally, some other organization will.

What is being done well and where do the challenges remain?

Evans: First, I applaud organizations that recognize, admit and are dealing with the transformation that is either happening or will inevitably happen in their markets. As noted above, these organizations are creating a Chief Digital Officer position. Another hallmark of these organizations is the move to include security earlier in IT. 

One of the challenges we see if where organizations don’t include security early enough in the IT process. Bad things can happen when security is brought in too late as outlined in the example above where some department might unknowingly be placing customer confidential information in a cloud service without understanding how that SaaS organization secures customer data.  

On the other hand, one can’t blame the line of business (LoB) employees. Security, historically, has been the Department of No. We believe, however, that security can be the Department of Yes. For example, in the above scenario, had the marketing department come to the security department early with the departmental requirements, the security department could have researched several SaaS options – one of which offered federated access to the SaaS application. This would afford the users single sign-on access; both a benefit to the end user and the security department (strong passwords)…as well as the help desk (fewer password reset calls).

What are the fears about using security teams early in the process?

Evans: The fear for the end users isn’t really a fear, it’s more of an impediment. Again, from my perspective, all end users care about security…until 8:05 AM at which time they decide security affects their ability to do their job. And, historically, security has been about denial and restriction – “no, you can’t have access to that app,” “no, we can’t allow you to connect to that system.” We believe security and security professionals must turn that around so as to enable the business to transform digitally. It starts with outreach. Security professionals need to reach out to their business counterparts to understand the business imperatives. Then research how the business imperatives can be reached securely. After all, that’s the job of the security department – to ensure the business can succeed while mitigating risk on a daily basis.

For loyalty marketers, what is their biggest gain from a digital transformation?

Evans: For any marketer, the digital transformation offers many opportunities and a few risks. To be sure, there is a dramatic increase in data available about customers and prospects and this opens up limitless methods of marketing goods or services to a different cut of the market simultaneously. In addition, there is an increase in “big data” opportunities to understand the effectiveness of spend. Armed with this information, smart marketers can refine investment decisions almost instantly to generate the greatest ROI.

At the same time, all this data about customers and prospects offers up risks – both legal and business risks. Without recounting each regulation, I’m sure we all know that there are a bevy of laws related to the secure storage and transfer of customer confidential information such as credit cards and medical information. In addition, there’s the risk of a breach being played out in the media. It’s not an understatement that these breaches can wreak havoc on careers and stock prices. It’s for these reasons that marketers must engage with the security (and compliance) department before they take advantage of the multitude of new applications and storage locations for customer and prospect information.

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