Author Archives: Pooja Bal

Pooja Bal
Pooja strikes a perfect balance of academics and application with experience in management education and business transformation of several clients across industries. As VP - Global Strategy & Advisory, she has deep experience in digital strategy design and implementation, change management, operating model and structure redesign, business process optimization, and customer experience management.
Banking Fintech Insurance

BNPL – Passing Fad or Promising Future for Fintech?

Taking a loan to pay for higher education is a common phenomenon in the US. But who would have imagined that due to food inflation, even essentials such as groceries will be considered for the ‘Buy Now Pay Later’ (BNPL) phenomenon? On Klarna, a leading player in this domain, more than 50% of the top 100 items bought on the app belong to grocery or household items.

As more younger consumers go online, they have been experimenting with alternative payments methods. The rise of smartphones and e-commerce, now integrated with social media platforms is among the top trends impacting online sales and payments. The creator economy too is fueling social commerce. Such trends have attracted a new demographic – the millennials and teenagers. Now wonder that Fintech players are crafting new solutions to meet this demand. Pre-paid cards and digital bank accounts for teenagers are meant to address this trend. Fampay, Junio in India and Revolut <18 in the UK are a few examples.

BNPL: ‘credit’ where due

Over the last couple of years, the BNPL trend also referred to as ‘Pay in 4’ model, is meant to address a market opportunity. The post-COVID scenario and inflation in many countries has made it even more attractive – especially for a demographic with limited income resources.

In a 2021 research in the US, it was found that 60% of those surveyed had used a BNPL service. The main incentive of course is the interest-free instalment option which reduces the spending pressure and provides an incentive for online purchases. Klarna, claims a 41% increase in order value and 30% increase in conversion through their BNPL solutions.

The adoption of BNPL is a worldwide phenomenon. According to research in 18 countries from YouGov, Indonesians made the highest proportion of purchases using a BNPL plan (27%) – almost double the global average of 15%.

BNPL adoption rate worldwide

Source: YouGov

The same survey also mentions that in India, BNPL services grew a mind-boggling 637% in 2021. Naturally, such solutions are popular among the younger demographic. A whopping 75% of BNPL users in the US are Gen Z or millennials. Credit card penetration in India is still in single digits. BNPL was seen as the answer to a demographic which could be denied a credit card.

Fintech brands too were quick to spot the opportunity. In mid-2021 there were already 50+ companies offering ‘Buy Now Pay Later’ services across the world. The number is likely to have gone up in the ensuing period. In India, brands such as UNI have positioned themselves as a revolution in credit offering payment options in three or two instalments.

BNPL players are also tying up with large retailers such as Amazon, Macy’s and Target – thereby gaining access to a large, ready customer base. Aside from the smooth user experience, some serious technology is at play behind BNPL experiences. Apparently, Affirm uses over 200 consumer data points for risk management, while its existing loan users improve its AI algorithm.

Some of the aspects BNPL players must pay attention to, from tech POV are:

Infrastructure: The cloud infrastructure should help scale up operations easily, provide new products and services using on-demand computing. It should also safeguard consumer data and aid in maintaining regulatory compliance.

Risk Management: machine learning comes into play here in developing models for better risk identification and management, real-time credit score prediction, and payment management.

Security: BNPL players are expected to maintain the essential infrastructure in accordance with security standards. Major players such as Klarna collaborate with AWS’s compliance and security assurance teams.

Analytics: The integration of data workflows should make it simple for data to be absorbed from a variety of structured (such as transaction and payment history) and unstructured sources (such as social media activity, credit bureaus, and spending behavior). Such information gives early warning signs of credit degradation during times of difficulty and assists in the creation of a 360-degree perspective of the consumer. The data analytics tools aid businesses in understanding the preferences of their customers and the performance of their own products.

Tech partners: to create better products and solutions, fintech companies merge or partner with services who add value. Block (formerly Square) acquired Afterpay a pure play BNPL company. To enhance its underwriting capabilities and speed up automated credit decision making, particularly to draw in millennials and Gen Zs, Klarna purchased the Italian payment business Moneymour. Additionally, Provenir, a provider of credit risk analytics, and Klarna have teamed up. Credit scoring, underwriting, and real-time decision-making at the point of sale are bundled as a result of their combined efforts.

So does all this point to a rosy future for BNPL? According to industry experts it may be prudent to exercise caution as regulators have taken steps affecting the business model of several players, in markets like India. What’s driving such actions is the fear of triggering overspending leading to credit risk and worse still, poor financial discipline among a young audience.

Buy Now, Pain Later?

In June 2022, the Reserve Bank of India issued a circular banning non-banks from loading pre-paid instruments (PPIs) such as digital wallets or cards using credit lines. Several brands suspended their BNPL offerings following this development. According to Euromonitor:

The Financial Conduct Authority (FCA) in the UK has named the key risks the model holds for consumers and the wider credit market. These include, but are not limited to, the lack of information for consumers around the features of BNPL, the lack of consumer creditworthiness assessment, and the potential creation of over-indebtedness.

Nearly 70% of BNPL users admit to spending more than they would if they had to pay for everything upfront, according to LendingTree. What’s more, 42% of them have made a late payment on them. While consumers maybe attracted by simple onboarding experience and ease of payment, the offline experience has not always been pretty in India. According to reports, lending apps have used unsavory methods to coerce users who have defaulted on payments.

These developments point to the industry being regulatory dependent in the near future and rightly so. What could be the broad contours of solutions for both end consumers and Fintech players? According to financial industry insiders, full-service banks seem to be better placed to make the most of the real demand for ‘pay-over-time’ services. Pure-play BNPL service providers may have to tweak their core offering based on the regulatory oversight in their home markets.

Trust, convenience and ease of use are three critical aspects of BNPL success. Traditional banks score better on trust – a critical factor in financial service products. According to YouGov study, only 36% in the 18-24 age group trust BNPL companies as compared to 61% in the same group for traditional banks.

Trust metrics on financial services by age

Source: YouGov

The implications for the ecosystem

There are several pointers for both end-consumers and the fintech ecosystem from this emerging trend.

Brands in the BNPL sector have a real obligation to educate users about financial prudence, especially to the younger demographic. It must be made clear to the end-user in every touch point that this is a loan and there are consequences for missed payments. Consumers must also be educated about the risk of over-spending and its fallouts. This is important as a key metric for BNPL players is the re-use of a service. According to PayPal 70% of their customers use the service within six months of first use. In the US, as BNPL is offered at more merchants the older demographic too is coming into the fold. So, it’s not just the Gen Z’s and millennials who will be target audience in the future.

For brands, convenience could translate to ubiquitous acceptance across online portals and POS at physical locations. Clubbing all BNPL payments with one brand would also make it easy to manage for the end user. Ease-of-use comes into play with respect to the app experience. The onboarding should strike a balance between being friction-free and conveying the details of the financial terms in a transparent manner, especially the repayment schedule and penalties for delay.

In sum, BNPL is a useful and convenient product feature especially for those with limited leeway in upfront spending capacity. But industry growth aided by great digital experience will depend on regulatory constraints and educating the consumer about the need for financial prudence.

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Mobile Opinion

User Research Methods & its Relevance for Enterprises

There are millions of apps on app stores, but only a select few have been successful with users and most others experience a drop of interest right after their launch. As per research, an average individual uses close to 25 apps per month, of which 96% of the time is split between just 10 apps.

Forrester reports that 70% of the projects fail due to lack of user acceptance. This is mainly due to the apps poor user experience. As per a study from Bain & Company, 80% of companies feel they delivered an exceptional user experience while only 8% of customers agree. This is one of the main reasons why it’s crucial to gain customer insights with scientific techniques like user research and identify what users prefer than rely on assumptions or gut insights.

Let’s explore some of the key factors that make the user experience integral for enterprises to craft & deliver products and services that resonate with the pulse of their customers and prospects.

What is User Research?

User research is the foundation for creating a successful product or service. It keeps the user at the heart of the experience and helps in creating offerings that align with the user’s needs.  Engineers and product designers have since centuries incorporated user feedback into their process, however, it was not until 1993 that the term “user experience” (UX) was coined by Don Norman during his time with Apple.

With the UX discipline evolving over the years, design teams and experts today incorporate various research techniques to enable decisions informed by the end-user rather than be led by assumptions.

The Significance of User Research

User research is a technique that is used to understand the needs, aspirations and behavior patterns of users through a series of quantitative and qualitative methods that help in simplifying the users’ challenges.  A great UX Design is always embedded in great user research – influenced mainly by the user insights while balancing the other key technical aspects and priorities. It’s an excellent way to include the user in the design process for a more human & user-centered design process that is critical to product success.

However, most often teams and enterprises rush through and evade the user research process as it seems exhaustive and time-consuming. But, the implications of not applying user research as part of the product strategy are far too many. There is no one-size-fits-all approach that works in a hyper-personalized era that we are a part of.

While it is an elaborate process, it helps to include user research as part of your product & design strategy. Click to Tweet

“User-centered design means working with your users all throughout the project” — Don Norman

When is User Research needed?

The answer to this is actually anytime. At every stage of the product development cycle, user research helps in bringing new insights that will guide the product development cycle. Although each product development cycle is distinct, it can broadly be categorized under the following steps:

Product Development Cycle

User research is broadly conducted in three distinct stages.

The Discovery Stage

The key goal during the early stage of the design process is to conduct exploratory research. As each project has a specific context and user group, the research should explore what is it that users actually need and understand what’s currently working and what’s not. A few research methods used at this stage include competitive analysis, benchmark studies, ethnographic research, one-on-one interviews, and focus groups.

The Development Stage

The next step is to assess the efficiency of the prototype developed and analyze if the product actually helps to solve the users’ challenges. Here are a few things to consider to ensure you’re on the right track.

  • Do users understand how the prototype works?
  • Have they been able to interact with the prototype?
  • Were the users able to find what they were looking for?
  • Do the features look & feel right?

Some of the user research methods used in this stage include card sorting,  prototype testing, moderated and unmoderated usability testing, preference testing, and A/B testing.

The Execution Stage

Once the product prototype is ready to go live, the goal is to evaluate the efficiency of the product and assess if it meets the users’ needs. The objective is to measure the performance in order to optimize the experience. Feedback from users is crucial at this stage, as the users’ needs may have changed or evolved with time and the current prototype developed might not be the best fit. The key is to adapt and reiterate as per the current user needs. A few of the research methods used at this stage include surveys, bug reports, data analytics and more.

In a nutshell, user research is conducted at every stage of the product lifecycle depending on the end-objective. Let’s explore some of the user research methods and how they can be integrated as part of the product design strategy.

User Research Method Approach

The discipline of research is vast and multi-dimensional. Considering the various types of user research approaches and methods it can get overwhelming to focus on the one that you need to choose. Here are some of the important research methods and insights about when to use them:

User Research Approaches

Quantitative Research

Any type of research that can be measured numerically and used to understand the ‘what’ can be categorized under quantitative research. For example, “How many people have downloaded your app” or “What percentage of users clicked a particular app feature”. Quantitative research explores large samples of data like these to identify key trends and patterns. It gathers information from existing and potential customers with various sampling methods, online surveys, polls, questionnaires, analytics, and AB testing, etc. After a careful understanding of the results from quantitative research, it is much easier for product and business heads to assess the future of the product and make amendments to the product features accordingly.

Qualitative Research

Qualitative research unfolds the ‘why’ behind certain user behavior.  It is a form of research that assimilates and works with non-numerical data and seeks to interpret meaning from this data with respect to specific user groups.  For instance “Why do users have a particular affinity towards a product?” “Why was there a negative response to a product tagline?”. Qualitative research explores the opinions, attitudes, and behaviors of users and provides insights and context into why certain patterns and trends arise. The various research types used here include usability testing, one-on-one interviews,  field studies, and customer calls.

For a holistic understanding of users and to be able to address their needs and concerns,  it’s important to use a combination of quantitative and qualitative research methods. Both methods are integral to the product lifecycle and cannot be substituted for the other.

Attitudinal Research

Attitudinal research methods gather insights about the users’ feelings, thoughts, needs, attitudes, and motivations. It seeks to discover why users have specific feelings and attitudes towards an experience. For instance, it shares insights about whether users enjoyed engaging with a certain product. Research types include card sorting, surveys, focus groups, questionnaires, and participatory design.

However, there’s one downfall of this research method, especially in a focus group setting. As humans, we are self-conscious and concerned about how others might perceive us. The desire to belong to a certain group and be accepted also referred to as the ‘herd behavior’ can be so overpowering that the user’s responses might be swayed and not be completely honest. One way to keep a check and counter this is to split the focus group into smaller subsets without a moderator that’s observing their responses. Despite room for potential bias, this technique is incredibly valuable as users are invariably engaging with your digital assets and experiencing your brand and ultimately converting.

Behavioral Research

Behavioral research methods aim to evaluate what users actually do. This could help in gauging how users navigate through the website and provide quantitative data about their engagement with the website. For instance, it can provide insights into where users click after arriving at your homepage or identify if users fail to notice the key messaging displayed at the main menu section. Some of the techniques include eye-tracking, click-stream analysis, A/B testing, and usability studies.

As it is important to understand what users say vs. what they do, it is beneficial to conduct a combination of both attitudinal and behavioral research and derive actionable insights from both techniques in conjunction with each other, essentially to back up what users say as against what they do.

Enlisted here a few amongst the many user research types that brands need to consider to identify and assess user behavior and preferences.

Types of User Research Methods

Ethnographic Field Studies: A research type that gauges user behavior in their natural environments, where participants encounter the product or service.

Usability-Lab Studies: A one-on-one lab setting, where the participant is given a set of scenarios that helps in the identification of specific usage patterns of a product or service.

Participatory Design: An experiential method where participants are given to construct experiences that helps in clearly identifying what matters most to them and why.

Interviews: The researcher meets the participant on a one-on-one discussion to gain in-depth insights on a specific product/service or topic.

Eye Tracking: A research method that tracks the eyeball movement to identify how participants engage with the company’s digital assets and environments.

Clickstream Analysis: Data gathered by analyzing the record of the user clicks across all digital assets and platforms.

Focus Groups: Participant groups ranging from 3 –12 members are guided through a discussion about a fixed set of topics. Verbal and written feedback is documented through the course of the discussion.

Usability Benchmarking: Usability studies that are conducted with precise and predetermined measures of performance.

Moderated Remote Usability Studies: Usability studies conducted remotely via screen-sharing tools and remote monitoring capabilities.

Concept Testing: A research type that assesses if the product or service aligns with the value proposition of the concept to ensure it meets the needs of the target audience. This is conducted in both, group and one-on-one settings, offline and online.

Panel Studies: An identification of attitudinal changes using constant participant-base and assessing the individuals’ opinions at different times.

A/B Testing/Multivariate Testing:  A research technique that evaluates the impact of the interaction between multiple variables, to identify the variant/s that have a greater impact on the desired user behavior.

UX Studies: Includes both quantitative & qualitative research methods to observe and track user behavior over a series of fixed goals and scenarios.

True-Intent Studies: a method that maps if users were able to accomplish their goal or intent and evaluate their subsequent behavior.

Diary/Camera Studies: A research study where participants are given a diary or camera to capture and describe the aspects of their lives that are relevant to a product or service including their thoughts and emotions.

Desirability Studies: Various visual-design alternatives are offered to participants to choose and associate each alternative from amongst the attributes selected from a predetermined list.

Card Sorting: Users are requested to classify items into groups and allocate categories for each group. This method typically applies the users’ mental models to refine the information architecture of a site.

Customer Feedback: Mostly commonly used research type, where participants are given open/close-ended review questions either online or offline.

Intercept Surveys: a survey that gathers user data during the use of a site or application.

Email Surveys: one of the most widely used research types that gathers user information via an email survey over a set of fixed scenarios.

Nothing sums it better – “Undervaluing User Research is a Deadly Disease”, says  Jared Spool, a Maker of Awesomeness and co-Founder at Center Centre – UIE.

It is crucial to invest time and resources that bring you closer to your audience.

There is no comparison to the quality and impact of products that are crafted with user research insights. Click to Tweet

However, there is a huge overlap in the various types of user research methods that can be conducted. Selecting the most appropriate method/s to apply depends on the research goals you wish to accomplish. Though it is exhaustive and time-consuming, user research methods and their unique attributes can help enterprises and product heads gain useful insights that – inform the design process with specific and measurable goals, adapt a creative problem-solving approach and follow a user-centric design that can impact the overall business performance and growth.

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Mobile Opinion

Assessing your Digital Maturity: Is your Enterprise Ready for Digital Transformation?

According to a recent report, digitally matured organizations are those who take the road less traveled i.e. their business processes are different than the majority. However, doing things differently is not enough, planning and implementing things differently is the key to success.

Most prudent companies realize how important it is to have a focused and customized digital strategy to excel in a connected world; thereby most digitally matured organizations have a well defined digital strategy in place.

Before embarking on this journey, assessing the organization’s digital maturity will help enterprises in analyzing where to start their digital transformation journey and how to go about creating a ‘digital roadmap’ for the future.

How can organizations start assessing their digital maturity?

Which are the areas to focus on while creating a digital transformation plan?

These are some of the critical questions that we as a digital advisory can help you answer. The right digital partner can help organizations visualize, mobilize and realize their digital transformation strategy.

What does this imply?

Digital Advisory

So, where do organizations take the first leap of visualizing their digital future?

At Robosoft, we follow a 5As framework to help find some truly comprehensive solutions that can scale an organization’s digital journey.

The 5 A’s framework – Access, Autonomy, Alliance, Agility and Algorithms

The 5 A’s framework

Digital Maturity Assessment – Using 5 A’s Framework

Digital Maturity Assessment - Using 5 A's Framework

Let’s delve deeper into each of these dimensions.

Access

Today millennials desire access over ownership. With a change in consumer behavior we are rapidly moving towards an access economy.

Access economy is the one where resources are shared – tangible or intangible both – it may mean sharing of the workforce, workspace or even knowledge sharing. With this shift businesses too are imbibing processes and technologies to adapt to an access economy.

What does this mean for enterprises?

  • Collaborative working ecosystems
  • Optimal usage of resources
  • Faster processes

The mantra is ‘value unused is waste’ and that represents a shift in cultural consciousness towards valuing experiences rather than goods. Uber the world’s largest taxi services own no vehicles, Airbnb owns no real estate, Alibaba has no inventory, the advent of sharing or access economy has truly changed the rules of the game.

Here are a few examples of organizations across industries leveraging the access economy-

  • Mahindra has recently invested in 2 start-ups Trringo and Smartshift. Trringo is an online platform that gives farmers pay-per-use access to expensive farming equipment. Smartshift is a load exchange platform that connects small commercial vehicle owners with people looking to transport their goods within the city.
  • With the dual goal of reducing vacant warehouse space and reaching customers in a new way across mainland Europe, the Middle East, and Africa, DHL Supply Chain has pioneered a platform called DHL Spaces to broker unused warehouse space.

Access economy helps is improving the efficiency of resources and optimizing their usage to increase productivity. Co-working spaces companies like WeWork are helping enterprises optimize their fixed space costs and platforms like Upwork are helping organizations in hiring resources as per the need.

Access economy

Image source

Autonomy

In a digital economy, consumers seek customization alongside flexibility and autonomy. They like making informed decisions with all the information about a product or service, available on the digital platform. It is thereby upon enterprises to leverage digital media to empower consumers in making more informed choices.

While consumers prefer autonomy, they do not want to lose human contact entirely. They reach out to consumer groups for advice and seek assistance before and after a purchase. The need for the human element is also pushing enterprises to custom-build their bots via technologies like machine learning, AI, NLP, etc.

So how can organizations empower their customers at every step of the customer journey?

  • Pre-sales

As per this excerpt, 57% of a sale is made even before the actual purchase. It’s thereby crucial for enterprises to ensure their presence on the right digital platforms at the right time, with essential information about their key offerings.

  • Sales

Consumers expect convenient & faster services. This is one of the reasons why e-commerce growth has rapidly scaled in the past few years. Even at physical touch points enterprises are offering options for self-service. For instance, McDonald’s has introduced kiosks at their outlets for consumers to order & receive their food much faster.

  • Post-sales

In a self-service economy, customers turn to other customers for feedback, reach out to groups and seek assistance with a faulty product or service. Chatbots help in addressing their grievances in real-time.

However, autonomy is not something that is only desired by customers, but it is sought by employees as well. When it comes to creating a digitally matured organization, creating autonomous processes across stakeholders – internal and external is the key.

Alliance

‘If you want to go fast, go alone. If you want to go far, go together.’

Today economy collaboration has become a critical factor for success. Here are some examples of collaborations that are thrusting the business ecosystem way ahead.

  • Home Depot, is working with manufacturers to ensure that the connected home products it sells are compatible with the Wink connected home system, thereby creating its own connected home ecosystem, with a wide range of services that are easy to install.
  • Philips’ healthcare practice is collaborating with Salesforce to build a platform that they believe will reshape and optimize the way healthcare is delivered. The platform will create an ecosystem of developers, building healthcare applications to enable collaboration and workflow between doctors and patients across the entire spectrum of care, from self-care and prevention to diagnosis and treatment through recovery and wellness.

The norms of competition to have changed drastically. Netflix is a competitor for Inox, Uber is a competitor for automotive companies, so on and so forth. Businesses will have to move beyond the traditional industry silos and build well-collaborated ecosystems, creating new opportunities for innovation. However, every business will need to team up with other players; competition or outside the industry, basis what their core objectives are. Identifying what kind of collaborations and to what extent is the key to developing a robust digital strategy.

Agility

An agile approach is not just limited to software development. It’s an integral part of every business. In the broadest sense, agility refers to an enterprise having an operational structure that gives it the tools to react quickly and efficiently to the ebb and flow of your market. To achieve this type of responsiveness, you need a huge degree of adaptability and flexibility at every level of your organization.

Fast moving, flexible and robust firm capable of rapid response to unexpected challenges, events and opportunities. Built on policies and processes that facilitate speed and change, it aims to achieve continuous competitive advantage in serving its customers. Agile enterprises use diffused authority and flat organizational structure to speed up information flows among different departments and develop close, trust-based relationships with their customers and suppliers.

An agile business model should be all-encompassing. The IT architecture needs to be adaptable and transformative to respond to market trends as they occur. Internal teams need to operate on an almost ad hoc basis if need be, without being bogged down by outdated hierarchical structures and poor digital tools that only slow down operational responsiveness.

Becoming agile is more about adopting a mindset that determines how people work across every aspect of the business.

To deploy an agile system, organizations will have to alter their operating model. For instance, software firms do not go about launching a full-blown product, rather they create an MVP, which allows them to test, experiment and improve, more often and faster. When it comes to adopting an agile system, it encompasses three aspects of the business – Decision making, Learning & Processes.

Algorithms

In a digital economy, data is the new oil. However, as pointed out in this Forbes article “data inherently is dumb”. So, data alone isn’t enough, we need to enhance it to make the most of it. And, thereby algorithms have become more important than ever. We need algorithms to analyze and bring relevant insights from data to the forefront. And, this is how business leaders will be able to identify specific areas to address.

The Airline industry has been using algorithms to set their passenger fares for ages now. There are a lot of variables that come into picture when setting airline prices like class, the position of seat in the aircraft, the rate at which the tickets are being booked, the time of the year, etc. The yield management program used by the industry constantly monitors supply and demand to get the highest revenue for a given seat inventory. E-commerce websites such as Amazon and Alibaba use the algorithmic business model, mainly for pricing, inventory and seller matching.

However, the level of advancement of an algorithm and the degree to which an organization should invest in algorithms will depend on their industry, business objectives and where they are in their digital journey.

Conclusion

When it comes to creating a digital strategy the ‘one size fits all’ approach doesn’t work. Every organization will have its trajectory while going digital. However, where your organization stands when it comes to the 5As as mentioned in this article will be a critical aspect of defining the journey ahead.

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Mobile Opinion

The role of Usability Testing in crafting Digital Experiences

‘Walk a mile in their shoes’ is often used an expression to convey that the design thinking process is built on empathy. As Design Thinking professionals we work on diverse projects and user needs. Sometimes, we may not be able to fully understand the motives, pressures of others’ lives.

Is it really possible for an urban male executive to truly feel how it is to be a single working mom or experience the challenges of say, working in an oil rig? I can never truly feel how it is to be a doctor using a critical patient information app, that too in the pressure of a hospital scenario. I can at best, get a peek into their lives in such a situation.

Hence, in my view, we have to understand ‘empathy’ within a context and realize its limitations as we are all shaped by our own influences, limitations, experiences and biases. That’s where Usability Testing comes into play as it can provide first hand information and insights for actual users.

Design Thinking is a holistic problem-solving framework and involves these key stages:

  • Empathize: Understand the user’s needs and problems
  • Define: Analyze the observations to define the problems
  • Ideate: Think of solution to each aspect of the problem
  • Prototype: Develop solution prototype for each aspect of the problem
  • Test: Test the product using the best solutions identified

The last phase is as critical as any other as it provides directions to product owners, strategists and designers for iterations and tweaks. Also as Design Thinking can play a role in transformation of any process – business development, operations, finance, marketing or product development it can truly impact business growth. In that context direct feedback from actual users eliminates guess work. It can also save expensive re-work in correcting flaws well before they are discovered in the marketplace.

Design Thinking Workshops to Accelerate Digital Product Development

Usability Testing: the fundamentals

The key intent of a Usability Test is to test the functionality of designs with real users in order to get a flavor of ease of use, navigation and other parameters. However, instead of leaving it all to observation and gut feel, the process involves thorough documentation and follows a process. A website, mobile app or any other digital product could be tested through this method.

There are two types of methods:

(a) In-person testing in a laboratory environment and (b) remote testing using a set of software tools. The former has an observer who is silent throughout the process and only monitors the behaviour of users and then reports the outcome. In the latter case, the screen activity, facial expressions are recorded by automated software applications.

The process involves 6 broad stages:

The process involves 6 broad stages

User groups: the participant characteristics are naturally determined by the product intent. As a thumb rule, the sample size should have 9 participants per country (2 pilot, 5 regular and 2 backup).

Tasks: we need to identify key user journeys based on the objective of the app or the digital product. It could be completing a transaction for a banking product or completing a survey in a website.

An example task scenario for a restaurant table reservation app could be:

  • Finding a restaurant
    You live in Charlotte and would like to reserve a table at an upscale restaurant to mark a special occasion
  • Choosing the location
    You would like to find a restaurant which is not very far from your place of living
  • Finding types of cuisines
    Since it is a special occasion, you’d like to experiment with gourmet food, maybe an exotic cuisine which you have not tried before
  • Making a reservation
    You have identified a suitable restaurant and would like reserve a table for two
  • Receiving confirmation and viewing a reservation
    Once booked you would like to receive a confirmation alert and also view the upcoming reservation
  • Editing your reservation
    You would like to change the timing of your reservation and increase the number of guests to 4.

Metrics: we then need to create standards of measurement by which design, ease of use, efficiency and performance can be assessed. The metrics could be objective (metrics that you can measure without relying on subjective interpretation) or subjective (metrics that rely on subjective interpretation of the test participant)

Environment: this includes creating a setup to make the users feel comfortable and have all the necessary equipment at hand. These could include relevant devices, documentation for ratings and a suitable lab test location.

Usability tests: among the various methods used are Task Sheets, heat maps, observations and rating charts. A task sheet typically records the success rate (2 = Success; 1 = Needed Support; 0 = Failed) and time taken to complete a task. While Heat Maps provide a high level overview of the drop and success rate, observations add the human angle by noting facial expressions and other emotional reactions. Finally, asking the users to rate their experience while using the product gives testers and stake holders a feel of the ease of use.

Test Reports: a typical test report will include an executive summary, goal of the test, methods used, data overviews, walk-through of the results of each task and actual quotes (positive & negative) from the users.

Usability Testing is increasingly being adopted by enterprises to minimize risks and validate product features before launch. Across the globe, there are several venues, including academic institutions which host Usability Testing Labs. Moving forward, co-working spaces which offer cost savings and convenience through shared infrastructure equipment, utilities etc., could offer such services to enterprises – all it takes is a room and some basic equipment.

The benefits of Usability Testing

More than ever before, customer experience defines business success today. A poor experience on a website, mobile app or any other digital product can mean loss of a customer forever. Very rarely do customers give brands a second chance to serve them.

At Robosoft, we believe in simplifying lives through delightful digital experiences. A robust Usability Testing exercise gives enterprises a better chance of providing a great customer experience, the new battleground. It can help get validation from actual users and get a first hand feedback if it meets their expectations. It can point to barriers which need to be overcome, help point out errors and assumptions. Those working on any creation can get far too attached to it and lose a sense of objectivity – they may not see the features and navigation methods the same way as the actual user.

Usability testing is a great way to manifest empathy, which is the starting point to any Design Thinking effort. In other words, it is a small but effective investment in the larger scheme of things – well worth the effort in crafting delightful digital experiences.

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Mobile Opinion

Importance of Organizational Culture in Digital Transformation

Digital transformation is reshaping every industry and enterprises are finding ways to adapt to the rapidly changing business environment. Business leaders have acknowledged that organizational culture is one of the key aspects of driving business success. In a recent Deloitte study, 82% of the CEO’s and HR leaders agreed that culture drives competitive advantage.

No wonder prudent enterprises are going beyond integrating newer technologies to adapt to this new reality – they are revamping their organizational culture to digitally transform. Take for example the case of the Economist Group. The publishing business has always focussed on selling advertising space on its print and digital medium as a revenue source. However, digitization has lead publishing houses to offer integrated marketing solutions including customized content, events, etc. This new market demand requires enterprises to not just have the technologies to meet the needs of the new-age customers, but also a trained workforce to implement them. The Economist Group realized that for adapting to these demands, they will have to retrain the workforce and support them in working more collaboratively.

This approach was no longer about selling individual products for short-term it was about consulting and helping businesses and building long-term relations with the clients. To achieve the same, the company introduced its ‘’Fast Forward’’ initiative aimed not just at the sales team but also the support teams like finance, programme managers, event organisers, etc. The program included a learning-based platform with a UI similar to social media platforms and also had elements of Gamification to make the process engaging and encourage the employees to complete the training. The process involved everyone from the top management to the executives.

According to Michael Thomas, training director, the Economist Group

“The program really pushed people to work collaboratively and to build relationships across different functional parts of the business. So we had sales working with events and finance and programme managers – it was very successful.”

An organization, in a digital transformation world, isn’t just a set of digital processes but also includes the work culture and the set of practices and attitudes that are key to implement digital transformation and succeed in a digital world.

So far, digital transformation has been about inculcating consumer-facing technologies or operational processes at some level but organizational culture is an aspect that is given the least importance when it comes to crafting a digital transformation strategy for any enterprise.

According to this study – almost 94% of the business executives equate “digital” mainly with technology, and only a small fraction that is, 6% defined it as “going beyond technology alone to reflect a mindset that embraces constant innovation, flat decision-making, and the integration of technology into all phases of the business.”

But why is it critical to include cultural transformation as an important, rather one of the most important aspects of an enterprise’s digital transformation strategy?

Here’s what Rob Roy the Chief Digital Officer at Sprint, said about how adding the ‘people factor’ to their digital transformation strategy, steered their journey in the right direction –

‘’We started using the phrase ‘digital transformation’, migrated processes and tools to be more digital, and created a dedicated business unit, and thought we’d automatically see that transformation happen. For example, we decided to do more sales online. When we set it up, we then tried to force customers down the digital path. But many of them weren’t ready. The spirit of what we were doing was correct, but a complete understanding of what we were trying to do wasn’t there. After six months, we learned that just because you say it, it doesn’t make it so. A digital transformation isn’t about digitizing a channel or simply doing more things digitally. It’s a much broader scope than that. We’re really looking to improve and simplify customer “moments of truth”—and all the supporting processes that build a true omnichannel, world-class experience. We’re now working with each area in the business to help everyone think and act digitally for the things they control. And we’re starting to see real gains in productivity, simplification, cost reduction, and building on earlier gains focused on sales.’’

The above example substantiates the fact that digital transformation will not happen in a company where the culture is not in place. However, on a positive note, business leaders realize this gap. In a Capgemini survey, 62% of the executives agreed that organizational culture is one of the biggest hurdle impeding the progress of digital transformation.

So what Exactly is a ‘Digital Culture’?

Company culture inculcates a range of attributes from a company ’s day-to-day operational processes to collective experiences and value system of the employees, leadership’s role, vision, etc. A digital culture has a different approach to all of these attributes vs a company which isn’t digitally matured. According to a report by MIT and Capgemini, digital culture comprises of the following attributes.

Digital Culture

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  • Customer Centricity: digitally matured enterprises look at everything from the customer’s perspective, their processes, internal and external, are geared up for simplifying customer journeys across every touch point.
  • Innovation: a digital culture supports calculative risk-taking, go beyond standard processes and adopt disruptive technologies in order to explore newer ideas.
  • Data-driven Decision-Making: the use of data and analytics to make better business decisions.
  • Collaboration: a digital culture, is collaborative and encourages the creation of cross-functional, inter-departmental teams to optimize processes and increase efficiency.
  • Open Culture: a digital culture reaches out for partnerships wherever necessary, instead of trying to do everything in-house.
  • Digital First Mindset: a digital culture works on a mindset where digital solutions are the default way forward.
  • Agility and Flexibility: a digital culture instils speed and dynamism in decision-making and accelerates the ability of the organization to adapt to changing demands and technologies.

As stated by TN Hari, Human Resources Head at Big Basket (a leading online grocery platform of India)

”In today’s digital world, it is imperative for organizations to adopt advanced technologies to improve efficiency and remain competitive. However, every organization will be having their own digital requirements and hence their own unique digital transformation journey. To bring change and align the organization for digital transformation, it will be important for business leaders to identify what kind of digital transformation their organization needs and the outcomes, even more important will be communicating this to their teams and aligning them to the vision of the organization.”

Challenges in Achieving a Cultural Change

By now we have established that digital transformation requires a cultural turn-around for any enterprise and it can be an uphill task to reshape the set processes, attitudes, behaviours and practices to adapt to the new digital reality and the challenges can be many and intimidating.

Here are some challenges that business leaders might face while revamping their organizational culture for the digital world:

Cultural Change

 

1. Inertia in letting go of existing processes and culture

According to an HBR study – one of the most baffling problems which business executives face is employee resistance to change. An enterprise built on traditional and rigid processes and culture will naturally be averse to change because sticking to old processes is easier for employees than starting from scratch.

As pointed out by Professor Deborah Ancona MIT Sloan School of Management

“Employees will resist because they still see the old behaviours as critical to their success and central to who they are while seeing the new norms as risky.”

Precisely why they continue to stick to their good old ways, and in the process, lose sight of the new envisioned goals and values of the business. However, in a digital world where technology is an integral part of people’s life, it is easier to establish the benefits of adopting newer technologies, if communicated in the right manner; and this onus lies on the business leaders.

As TN Hari, rightly puts it across

‘’We are reaping the benefits of digitization in our day-to-day lives. People are already accustomed to using technology to simplify their personal lives and they understand how it can ease their routine and mundane tasks. Then why will they not look at digitization from a similar perspective in their work lives? To bring about change, it will be critical for business leaders to show their teams, what’s in it for them? How technology will help them improve their efficiency and accelerate their progress in the organization.’’

2. Infrastructural costs

Driving a digital culture is not just a human thing, rather it needs a full-fledged infrastructure in place. This infrastructure, unlike the traditional IT systems, has much more than some hardware and legacy software platforms. It requires a range of things including products, mobile applications, social, cloud, data analytics and automation, all this can mean a huge cost to the enterprise and hence acts as an impediment.

3. Resource allocation

Adding new digital processes introduces a slew of newer tasks to the workflow of an organization. With newer operational tasks being added, there is a need for allocation of resources who can tactfully navigate through the newer processes. However, at times enterprises are not geared up to scale their resource allocation within that time frame, and that makes digital transformation difficult.

4. Inefficient adoption of automation

A digital culture focuses highly on automation. Which means moving away from the manual processes. Most people comfortable in a traditional culture are reluctant to let go of the manual processes that they have been using for decades and are always iffy about breaking off their comfort shells and adapting automation. And thereby, even when infrastructural processes are in place, automation is not effectively implemented in the enterprise.

5. Upskilling challenges

Digital literacy amongst the employees is one of the major roadblocks when it comes to instilling a digital culture. For employees used to traditional processes, it will require proper planning of a training module to incorporate digital competencies in them, which can be a challenging task. Businesses will need to invest heavily in organizing training sessions and mentorship programs to ensure success.

How to Create an Organizational Culture to Accelerate Digital Transformation

According to a study by Mckinsey, culture is the number one barrier when it comes to digital transformation.

Digital Transformation

 

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As complex it might sound to solve this part of the puzzle, planning ahead with the right strategy will ensure success for enterprises while getting ready for a digital future.

Here’s is how business leaders can lead the way for instilling a digital culture in their enterprises:

Organizational Culture

 

1. Define what digital transformation means for your organization

In broader terms, digital transformation might mean adopting technologies to improve efficiency and simplifying lives for your customers. But, every enterprise is at a different stage when it comes to their digital transformation journey, and hence individual organizations will have their own definition. It is imperative to know where your organization stands, and where do you want to reach and why.

It is important to identify answers to these questions and even more important is articulating it to your team and aligning them to the bigger picture. So that they don’t see technology as a threat or inconvenience, they see the bigger picture and technology as an ally to reach there, together.

2. Encourage disruptive thinking

Technology is disrupting industries and turning norms on their head. In a scenario like this, if your team keeps doing things the way they did or thinking the way they did, the organization will remain where it was albeit with the implementation of some digital platforms. For your team to appreciate a digital culture business leaders should reward disruptive thinking, ability to take calculated risks and even creative failures.

3. Imbibe leadership characteristics in employees

Change is never easy, thus it requires dynamic leaders to lead the way and bring change. Leaving this task to just to the C-suite of the organization will only delay the progress. Business leaders should identify leaders across functions to lead the way. Organizations can encourage leadership characteristics by creating opportunities for employees. For instance, a North American financial institution that was undergoing a digital transformation made it a practice to rotate meeting leaders, which empowered a wider variety of people in meetings. Enterprises should encourage leaders to become mentors to their team or encourage action.

Breeding leaders will need decision makers to give independence to their teams and let them make choices and decisions and feel safe while doing so. For instance, to signal change at Cisco, executives in certain divisions gave up their offices, so the company could create team rooms; the company also started allowing employees to choose the workspace and tech tools that best fit their individual roles.

3. Don’t hire for the ‘job’ hire for the organization

In a digital world where technologies change every fortnight, it is rather short-sighted to hire candidates for a ‘specific job’. Digitally mature organizations allow employees to wear multiple hats. Thus, hiring for a specific skill or tech speciality will leave you holding a lot of outdated talent. Instead, businesses should list down the qualities that will lead to a bigger, stronger, forward-thinking organization. Prudent leaders should work toward creating a workforce that will move your company and digital culture forwards.

4. Revisiting organizational operating model

In most organizations, a change in culture is first run as a pilot with the senior executives of the company. If the pilot is successful it is then rolled out to the company. However, the drawback of this approach is the traits of the executives with whom the pilot is conducted and approved, do not exist in the broader organization. The approach that applies to a mid-level manager may not work for the intern. Hence, there is a mismatch in the motivation levels within the organization to adapt to the new culture. To bridge this gap it is important that organizations re-look at their basic operating models, review systems, etc. New practices need to be implemented basis the context of the various organizational functions. Rolling out a generic strategy might not work. For instance, while embedding a digital culture, Adobe Systems abolished its annual performance management reviews, replacing them with real-time “feed forward” sessions that focus on upcoming goals.

In another example, leaders at a life sciences company reviewed their company’s “DNA statement” to ensure that the principles and the company’s systems supported the new digital culture.

In Conclusion:

As rightly pointed out by Ian Rogers, Chief Digital Officer at LVMH

“The big moment for an organization is when they have embraced the fact that digital transformation isn’t a technical issue, but a cultural change.”

To reshape your organization’s culture and making it digital ready will require business leaders to think beyond the realms of technology. Dig deeper into their employee attitudes, organizational processes and not shy away from reshaping and altering whatever is necessary to accelerate their digital transformation journey.

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Mobile Opinion

How businesses can drive digital innovation through a culture of experimentation

What is the similarity between Gmail, Sony PlayStation and Facebook’s Like Button? Besides being iconic product successes, they were all invented through experimentation.

Gmail was developed by an employee at Google while experimenting during the set-aside time for personal projects. Sony’s Playstation was created by an entry-level employee at Sony, while he was tinkering around with Nintendo and Facebook’s like button was invented during one of the hackathons at the company.

In all the above examples, what stands out is that all these companies take experimentation as a critical factor to accelerate innovation for their businesses. These forward-thinking organizations understand that a culture of experimentation cannot be built if businesses keep standard practices.

In the 2000s, W. James McNerney Jr. became CEO of 3M. He has had a successful stint at GE as a senior executive and brought some of those practices to 3M to improve the efficiency of the company and boost growth. He looked at narrowing budgets, created a leaner team, and implemented Six Sigma. Though, it seemed like McNerney’s plan was perfect, it did not yield desired results. Why? Simply because it did not leave room for experimentation in the effort to become efficient.

The company, which had invented groundbreaking products like Thinsulate, Scotchgard, Post-it notes, etc. was losing its innovation edge. According to this report: in the past, one-third of sales had come from new products (released in the past five years), but that fraction had since fallen to one-quarter.

In this age of digitization, business leaders understand the culture of innovation is critical to digital transformation and they are also realizing that innovation cannot be driven without a culture of experimentation. According to a recent research done by Deloitte and MIT, most business leaders identify creating a culture of experimentation within the organization is one of the top challenges for organizations to compete in a digital environment.

Digital innovation

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The most innovative organizations foster a culture of experimentation in their organization. According to Jeff Bezos –

Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day….

Why experimentation is crucial for digital innovation

In a data-driven world where businesses have an avalanche for customer data generated with every digital interaction. While this huge amount of data is extremely useful in driving insights, it can also stifle experimentation. That is because businesses tend to look at data as a final word on what the consumer wants and follow a standardized process of delivering their stated needs and not understanding their latent needs or solve a problem for them.

One of the major reasons why traditional organizations do not adopt a culture of experimentation is the fear of failure. Exactly, why most of the digital disruptors are the organizations which do not follow a set pattern.

If Netflix opened just another brick and mortar video rental shop instead of an online portal, it wouldn’t be the where it is and the same thing goes for enterprises like Uber, Airbnb, etc.

According to Maile Carnegie, group executive of digital banking at financial services firm Australia and New Zealand Banking Group (ANZ) Ltd. of Melbourne, Australia,

‘’it’s fascinating how some young, digital companies experience failures every single day in their efforts to achieve their purpose, and they’re comfortable with it.”

Why experimentation is important to drive innovation

Today’s businesses are data-driven and however, that also means only relying on data to create solutions without testing and experiment can lead to failures, if not, it can also restrict an organization to explore the full potential of innovation.

According to an HBR research, companies which foster a culture of experimentation will see 5 times higher growth in revenue compared to those which don’t.

Most digitally maturing organizations understand this and hence they prioritize driving a culture of experimentation. According to a survey done by MIT, digitally maturing organizations are more likely to experiment and iterate.

How organizations can create a culture of innovation

 

How organizations can create a culture of innovation

Celebrate failures and learn from them

Like earlier mentioned in the article, most organization fail to adopt an experimentation culture due to fear of failure. However, business leaders must empower their teams to learn from failures. Some of the ways of doing this is:

  • Encouraging employees to propose out-of-the-box ideas without having fear of any negative views.
  • Rewarding them for pitching innovative ideas irrespective and communicating the same across the organization.
  • Encourage brainstorming sessions which are cross-functional to have a different perspective.
  • Acknowledge and encourage your team to drive insights from failures and share with a wider audience.

Business leaders should encourage their teams not to fear failures rather consider it as a critical step towards experimentation and failing forward. As rightly quoted by Jeff Bezos on Amazon’s innovation culture –

“One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.”

Testing and adapting fast

While experimentation is critical. Experimentation and iteration are critical for businesses to respond to digital disruption. Leaders should encourage their teams to learn from those experiments, iterate and adapt fast to drive the full potential of innovation.

Companies like Google, Facebook and Amazon are constantly running experiments in an effort to continually improve prove the platform experience. Facebook CEO Mark Zuckerberg estimates that 10,000 versions of his social media site are running at any given instance as it tries and finds small improvements

Companies should figure out how to experiment to compete in the future while also maintaining the core business so that they can perform in the present.

For instance, Cisco takes a portfolio approach to innovation investment, according to James Macaulay, senior director of the Cisco Digitization Office, “you need some highly predictable, highly reliable asset classes, so to speak, but you also probably want to have some moon shots in there that could potentially return a thousand-fold. We’re trying to balance predictability of returns while allowing for the opportunity of very high returns on investment.”

Remove silos and blur the lines of hierarchy

Another setback that organizations face while driving a culture of experimentation is organizational silos. To drive a culture of experimentation, collaboration is critical. In today’s digital landscape not just customers are digitally connected, various functions across the organizations too are connected. In that context, experimentation and sharing of ideas can happen at an inter-department level. Some times innovations come from areas least expected.

Like mentioned earlier in the article, the idea for the gaming device Sony PlayStation, came from Ken Kutaragi, a relatively junior Sony Employee who spent hours experimenting  — something that wouldn’t have happened in a siloed and an environment with a rigid hierarchy.

This can happen by encouraging and facilitate people across all departments to work together and collaborate on ideas. Also, having employees at every level to work together — often the best ideas come from the people who get their hand dirty while building a solution.

Another aspect of breaking silos is democratizing data – so that anyone in the organization can harness them for improved customer experience. For instance, at Uber, 50% of their employees have access to an insights database which helps to inform their decision making on a daily basis.

Create a top-down approach to experimentation

When it comes to driving change, it is critical that business leaders drive that change. Having the CXOs leading by example will create confidence in their teams to do so. More often, in a set environment leadership team are unwilling to change what is working for them. However, getting their buy-in is important for successfully transforming the culture. Business leaders could initiate testing and experimentation when the risks are minimal and then implement the learnings to bigger projects.

In conclusion:

To be competitive in a digital world it is critical for organizations to foster a culture of innovation where their teams have the ability to:

  • Use agile methods to continuously test and innovate.
  • Manage the knowledge interfaces among departments and team to brainstorm and derive insight from data and experimentation to accelerate innovation.
  • To utilize the organizational and technical infrastructures to drive experimentation at scale in order to deliver digital transformation.
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Mobile Opinion

Role of Design Thinking in crafting end-to-end customer experiences

How often have we come across businesses which have had enviable success and are lost into oblivion now? Take for example, the downfall of Blockbuster with the rise of Netflix, Kodak’s failure with the rise of digital photography or the shutting down of Orkut with Facebook flourishing. All the above examples come from completely different industries, but one thing remains constant – businesses’ failure to understand consumer needs and adapting to change.

So what does this mean for enterprises today, in the era of data deluge and digitization?

With the unlimited amount of data about consumers, it might seem obvious that businesses have more than enough information to understand what the consumer exactly wants. And, that is true to some extent. That is why prudent businesses are not just reshaping their business processes but also business models.

This understanding has lead to the emergence of three kinds of business transformation –

1. Product companies transforming into Product & Services

Pure product companies are transforming to offer services and ecosystems to extend their offerings. For instance, companies like Daimler and BMW picking the pulse of the sharing economy pro-consumer of today and getting into car rental businesses or Phillips transforming from home lighting solutions to a provider of connected systems.

2. Service companies adding products to their portfolios

Service companies are going beyond their niche and launching their own products. For instance, e-commerce giant Amazon launching suite of products like Amazon Echo, Kindle and Fire Stick.

3. Customer oriented ecosystems

More and more businesses are realizing the value of creating a consumer environment where they can offer delightful experiences to their patrons. For instance, brick and mortar retailers opening up their online portals or using technologies like AR/VR and Artificial Intelligence to augment the retail experience and e-commerce players opening their physical stores are examples of businesses trying to create ecosystems that are consumer-oriented and simplify their lives while providing them a delightful experience.

While we are seeing a profound change in the way the business landscape is reshaping owing to digitization and the lines between products, services and environments are getting blurred, is that enough?

Today’s consumers seek seamless and connected experiences. Imagine a well-designed e-commerce platform with an awry checkout process. The customers will not mind abandoning the platform at the very last step, never to come back again. In fact, a complicated checkout process is one of the topmost reasons for cart abandonment on e-commerce portals.

The realization that all businesses, whether B2B or B2C are H2H (Human to Human), is imperative for organizations to build relationships with customers and Design Thinking fills the gap of the human element.

Design and Design Thinking are often confused as the same term, and that is far from true. There is a difference between Design and Design Thinking. Former is mostly misunderstood to be limited to how things look, the graphics and design element. Usability and ‘how it works’ has been the hallmark of good design for ages – even before the term Design Thinking was coined.

A good design is about creating a solution that is intuitive, anticipates the latent needs of the consumer and is future ready and thus, Design Thinking is much more than just incorporating great graphics into a product and making them look attractive.

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.” — Steve Jobs

Design Thinking is a human-centered, iterative design process consisting of 5 steps—Empathize, Define, Ideate, Prototype, and Test. It is useful in tackling problems that are ill-defined or unknown. Design Thinking is a concept that can simplify consumer journey and add value across industries and functions.

Design Thinking

Take for example IBM created billboards their IBM’s People for Smarter Cities initiative. The billboards acted as ramps, benches, or rain shelters. Such a simple yet effective idea!

IBM created billboards their IBM’s People for Smarter Cities

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Another hallmark of striking the right human chords and creating delightful customer experience through Design Thinking approach is the story of Doug Dietz from GE healthcare creating Adventure series MRI machines for children.

Doug Dietz was an industrial designer, working for GE Healthcare. When the first time he saw a little girl who was crying on her way to a scanner that was designed by him, the horror of the experience struck him. Doug reminiscences:

“The room itself is kind of dark and has those flickering fluorescent lights”, he adds in his TED talk “that machine that I had designed basically looked like a brick with a hole in it.”

Inspired by the principles of Design Thinking Doug created the ‘Adventure series MRI machines’ which reformed the horrid experience of going through the scanner to an enjoyable one.

 

Adventure series MRI machines

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As rightly said by our CEO Ravi Teja Bommireddipall

‘’Customers cannot always articulate what they want; they can tell you their pain points but meeting the latent needs of customers from those pain points is where real innovation happens. To understand these latent needs, it is crucial for entrepreneurs and product innovators to empathize with their customers. This will only be achieved when we step into the customers’ shoes and live with them, and that cannot happen inside an air-conditioned office, looking at a heap of data. I call this GOOB – go out of the building, and live with your customers.’

For instance, McDonald’s India wanted to make their mobile app the preferred medium for ordering. The vision was to bring the emotions of joy and delight from in-store to the new McDelivery app experience. We made several store visits, observed the customer, identified their pain points and crafted an app that delighted the customers. The new app was able to garner 103% more orders than the older one.

So what is the role that Design Thinking plays in creating a delightful end-to-end customer experience?

In a digital world, the competitive landscape is flattened and the barriers of entry are low. Businesses are continuously reinventing themselves to meet the demand of the new age consumer.

Uber disrupted the transportation industry, without owning any cars but with a well-designed intuitive app. Airbnb disrupted the hospitality industry by upgrading a simple idea of room sharing into a well-designed website and mobile app. These enterprises testify that having innovative ideas isn’t enough capitalizing on that idea with the help of exceptional design and intuitive user experiences are the key to success.

In the digital era, where customers are empowered by information and are spoilt for choices it is imperative for businesses to add elements of design at the heart of every brand experience.

By design, these experiences elevate the consumption of personalized content and experiences at every touchpoint. Design-led organizations like Apple or IKEA realize the contribution of human-centered design in crafting engaging customer experiences and eventually to the growth and ROI of an enterprise. Hence, Design Thinking is at the heart of their strategies.

Key aspects of creating design-led customer experiences

Key aspects of creating design-led customer experiences

1. Understand the customer’s needs and perspectives

For most businesses innovation is approached from a technological point of view. However, the Design Thinking approach is about keeping the consumer’s perspective first. Understanding and resolving core consumer pain points will lead to a product that is consumer oriented and offers a delightful experience to them.

2. Create Personas

As quoted by our CEO Ravi in this article

“Know thy customer” is a familiar term to marketing and sales executives. Yet marketers who don’t take the steps necessary to better understand their customers will not be successful. Regardless of how you gather information about customers, it’s imperative that you use the information as a basis for understanding what makes the customer tick.’’

By developing personas of the customer base, businesses can come closer to the psyche of the consumer. Once businesses empathize and understand the consumer profiles, they will find a better way to not just connect with them but add value to the experience. The persona should include an image of the imaginary customer, demographic profile, attributes and motivations, needs, pain points, and actual customer quotes.

3. Empathy mapping

Empathy mapping is a collaborative process to gain deeper insights about consumers. An empathy map can represent a consumer segment and can provide a complete picture of the customer and what actions they might take as a result of their beliefs, emotions, and behaviors. Empathy mapping has 4 quadrants labeled as ‘think’, ‘feel’, ‘say’, ‘do’ to help make sense of different aspects of the customer’s experience and preferences.

Empathy mapping

4. Mapping the customer’s experience journey

Businesses today have a plethora of customer touchpoints digital and offline and hence enough data to understand the consumer. However, they continuously struggle to understand customer motivations and influences. This is where customer journey maps help.

Customer journey maps enable businesses to understand the consumer needs and hence build relationships by solving for those at every touch point. According to a research, customer journey maps improve marketing return on investment by 24 percent and shrink sales cycles by 16 percent. A great customer journey map should articulate an ideal customer experience and act as a guide for businesses to deliver that. According to a study from Adobe and Econsultancy, companies with a focused, customer-first approach are more than twice as likely to rise above competitors.

5. Create product roadmaps and prototypes

In today’s world; customer needs, market forces, and innovation across industries are reshaping the customer experiences continuously. It is imperative for businesses to adopt an Agile approach. Hence smart businesses do not go about launching a full-blown product, rather they create an MVP (Minimum Viable Product) which allows them to test, experiment and improve, more often and faster. Creating product roadmaps and prototypes before launching the final product minimizes the chances of errors and leaves scope for further development.

Iterating with customer feedback is an efficient way to create customer experience prototype, these pilots can lead to secure outcomes before scaling the product.

For instance, at Robosoft we partnered with Athenahealth, they had developed a medical reference app that doctors were using to check interactions between drugs. The problem was that the doctors didn’t find the app very useful. Based on the feedback from the doctors, the app was redesigned to include sponsored and original personalized content. The redesigned app with upgraded features helped keep doctors engaged and asking questions or sharing information, not just sending information to the doctor.

Businesses should build processes to manage these prototypes in an Agile way, through sprints and frequent feedback from users, with a focus on developing business value.

6. Product testing with the end user

The end user will not experience the product in a controlled and predictable environment, and hence Product Testing with the end consumer is one of the most essential steps of a Design Thinking process.

Most design driven enterprises have their Design labs where they are in an early phase of user research when products are not ready to be launched into the field, but insights can be drawn by observing how people interact with prototypes for different concepts. Simulated environments are created for users are created to experience the products and then the user interactions are measured with various tools like heat maps, touch maps, screen flows, user analytics platforms, etc.

Challenges in implementing customer experiences using Design Thinking

While using Design Thinking to build customer experiences seem like an easy solution, it is easier said than done. It is more than just a cognitive shift, there are organizational and business challenges that need to be met. Some of them are:

Challenges in implementing customer experiences using Design Thinking

1. Short-term thinking

Manier times enterprises see Design Thinking as a short term approach to a particular project or a product. In a world where technology is changing consumer experiences and needs every single day, a short-term approach and vision will not help in yielding the best results out of the Design Thinking strategy. Business leaders have to think about the entire ecosystem where the consumer exists and the future before defining their strategy. By starting small but thinking big enterprises can work towards a successful Design Thinking strategy. Take for example, Paytm which started as a mobile recharge platform to one of the largest mobile payments platform with over 7 million merchants and 300 million registered wallet users, and now a major e-commerce platform. Paytm couldn’t have done all this without envisioning and keeping a pulse of the changing ecosystem around the consumer, and working with a long-term goal around that.

2. Scaling

Given the expanding surface of customer touch points in an always-accessible and always-on era, scaling the Design Thinking approach to every touch point can be a daunting task for businesses.

3. Challenge of pace

Today, global brands have to address and engage with customers and offer a personalized experience to tens and thousands of customers at a time. Which might need technology and access to a huge amount of data and process in place. Effective design needs to be efficient, as well as engaging. Not all businesses are equipped to do that at every stage.

4. Building a design culture

As Design Thinking becomes the buzz word in this age of the consumer, businesses will need to align the organization to have a design-oriented approach. Most organizations try to do that in two ways – by either having a team of designers across all their product teams or by creating a design team that rotates among project groups. While organizations have to identify their own approach basis their organizational culture. Each of these approaches might have their own shortfalls for instances having a siloed team of designers for n number of projects may lead to disjointed products as product team’s and design team’s vision might be different. Similarly having an internal consultancy might take up only big projects leaving the minute design gaps to be filled by the product teams. Airbnb has a unique approach to having a consumer-oriented design culture Every project team at Airbnb has a project manager whose explicit role is to represent the user, not a particular functional group like engineering or design. According to Alex Schleifer, product head at Airbnb

“Conflict is a huge and important part of innovation, this structure creates points where different points of view meet and are either aligned or not.”

5. Designers’ and product stakeholders’ perfectionist block

More often than not product stakeholders want to launch a product that is ‘perfect’. However, that is one of the major roadblocks in the Design Thinking approach. Design Thinking approach is iterative, Data and Analytics-driven. In this ever-changing world product managers and enterprises should be ready to launch a Minimum Viable Product and then iterate it basis consumer feedback and data and then scale further in a step-by-step manner.

In conclusion:

The most innovative companies in the world like Apple, Coca Cola, IBM, etc. have one thing in common, they use design as an integrative resource to innovate more efficiently and successfully. According to the DMI index design-led organizations outperform S&P by a whopping 228%. The convergence of technology, business environment and changing consumer preference is opening doors for unlikely competitors as well as newer opportunities. To succeed and take advantage of the opportunities, enterprises will have to adopt an Agile, design-led development process with the continual redesign and understanding evolving of customer journeys.

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How Design Thinking can accelerate Digital Transformation

Technology is part of a consumer’s everyday life, as it keeps our world connected. Thanks to technology we have come to expect all value providers – from businesses to government, to deliver personalized solutions on any device, anywhere in real time. It has also changed the way customers and businesses consume goods and services. It implies that the ways in which companies design and build their services must evolve to keep pace with the digital world.

In that context, Digital Transformation is imperative for all businesses. This message comes through loud and clear from every keynote, presentation, panel discussion, article, or study related to how businesses can remain competitive and relevant as the world becomes increasingly digital. What has thrown business leaders in a tizzy is a common understanding of what exactly ‘Digital Transformation’ means.

It is impossible to derive a single definition of ‘Digital Transformation’ that applies to all businesses. Digital Transformation will look different for different companies. We at Robosoft define Digital Transformation as:

The incorporation and unification of digital technology into all areas of a business resulting in positive changes in how businesses operate and deliver value.

Also, it’s a fundamental change in culture that requires organizations to continually challenge the status quo and experiment often.

But, why should Companies have Digital Transformation as a priority in their strategy? Pragmatic syllogism dictates- “because they have to”. It has become a survival issue for businesses in a digital savvy world. Howard King, in a contributed article for The Guardian, puts it this way:

“Businesses don’t transform by choice. Why would they want that? It is expensive and risky! They transform because they have no other alternative.”

The term ‘Digital Transformation’ is also often misunderstood as the application of ‘hyped’ or trending technology as the first step to solving any problem. At Robosoft we understand both the necessities as well as the risks surrounding Digital Transformation. That’s why when we work with our clients to implement Digital Transformation in their organizations, we do it based on the principles of a holistic problem-solving framework: Design Thinking.

The principles of ‘Design Thinking’ can be of great help to anyone trying to solve a problem or looking for better ways of getting work done. Design Thinking is a practical and creative method for problem-solving that has evolved from fields as varied as engineering, architecture and business.

Why Design Thinking?

The Design Thinking approach is especially useful for solving problems that require innovative solutions since it’s a powerful tool to tackle tasks that are unfamiliar or have never been done before. Problems and therefore innovative solutions seem to be apparent when you look at them from a distance.

“Design transcends innovation. It speaks to the politics of optimism.”
– Paul Bennett

How Design Thinking helps

Design thinking is a tool that helps to better conceptualize the tasks involved. It is a tool that helps us understand all the hidden loopholes and lets us have some measurable assessment while approaching a big project. It is a framework that lets us challenge the scope and narrowness of our thought process, and to push its boundaries. That is the key to transformation itself, and the basis upon which we construct our Digital Transformation strategies.

There has been considerable research around the process of adopting a Design Thinking approach to solve each specific kind of problem.

Define, research, ideate, prototype, choose, implement, and learn. These are the seven steps involved in one of the renditions of the Design Thinking process.

The steps aren’t linear – they can occur simultaneously and be repeated. A simpler expression of the process is Robert McKim’s phrase “Express–Test–Cycle”.

Another, five-phase description of the process is described by Christoph Meinel and Larry Leifer: (re)defining the problem, need-finding and benchmarking, ideating, building, testing.

Yet another way to look at it is Shewhart’s “Plan-Do-Study-Act” PDSA cycle.

PDSA Cycle

Image source: NHS

All the above approaches have their own merits and are applicable within various contexts. But the Design Thinking method shares a common, universal set of traits, mainly: Empathy, Iterativeness and Collaborative Approach.

3 Traits of Design Thinking

Empathy:

Organizations approach users with empathy, understanding about user’s troubles and grievances. The key here is for organizations to be able to put themselves in the user’s shoes; think what they think, feel what they feel, understanding the various pain-points for the users and be able to map these pain points in accordance to magnitude and scope of each.

It is not only about making things more efficient but about understanding people. Conventional research methods, like focus groups and surveys, can be useful in pointing towards incremental improvements, but those don’t usually lead to breakthroughs because these techniques simply ask people what they want.

It is important to understand that users may not always be able to fully comprehend their own needs or demands, because of their limited understanding of viabilities and feasibilities of possible solutions.

Therefore, the key is to put oneself in the user’s shoes and think from their perspective while also holding on to the knowledge and insights about the technologies that could make the solutions possible.

Henry Ford understood this when he said:

“If I’d asked my customers what they wanted, they’d have said ‘a faster horse.”

No one would have asked for a car.

Iterativeness:

Once the organization is done with understanding the pain points of the users, it formulates problem statements and works through them to think about solution ideas. When the best ideas generated during ideation are crystalized, the implementation process begins.

At the heart of the implementation process is incremental and iterative prototyping: converting concepts to realities, turning ideas into actual products and services; which are then tested, iterated, and refined.

With the Iterative approach, a manifestation of the Agile Development process, first the organizations do ‘just enough’ planning to get started with building the minimal feature set, formally called the ‘minimal viable product feature set’, which they go on to build.

Next, they test and review that small set and get it ready to ship. When that cycle is complete, we end up with a potentially shippable product.

Through the planning process, organizations are doing just enough planning to complete the next incremental release. Thus, one ends up with several incremental releases, and one just keeps repeating these incremental releases until the product is feature-complete.

Collaborative approach:

As discussed earlier, Digital Transformation looks different for every industry and every organization since each of these companies has unique operating procedures and standards and unique needs. Therefore, providing each company with customized Digital Transformation solutions involves a fair bit of innovation from digital advisors, as they must figure out how to tailor and personalize technological tools to satisfy unique customer problems.

Hence, the “collaborative approach”, advocated by the Design Thinking principle becomes essential. Collaboration is a philosophy of interaction-based, process-oriented problem-solving which emphasizes a collective work process for problem-solving, as opposed to cooperation, which emphasizes just interaction-based goal-oriented problem-solving. It should be understood that, in principle, cooperation is a subset activity of collaboration.

Understanding the innovations required in the Digital Transformation process of any company, the collaboration between technology providers, the client organization and the client’s end customer becomes very important. This is primarily because the notion of ‘lone innovator’ is a myth.

Innovation happens when people marshal their collective knowledge and insights to the process, working together as a creative group.

Secondly, most of the great solutions to vexing problems come from the edges of a domain. That is when knowledge domains conventionally thought of as ‘independent’ speak to each other, contributing their offerings to collectively solve some problem, the probability of innovation to occur increases significantly.

A classic example in respect to the principle that states, “Innovation happens at the intersection of disciplines” is that of Charles Darwin. Darwin was a geologist and collected a number of bird species from the Galápagos Islands. He kept poor notes of his collection and returned the birds and notes over to John Gould upon his return. Gould was an expert ornithologist and initially dismissed the birds as being normal. Gould later discovered that each species was in fact distinct. The example shows how Darwin, without the knowledge of ornithology, could contribute to the field without having the training or knowledge. Drawing analogies from this classic example, in order to get innovative solutions for Digital Transformation of companies, Design Thinking advocates that people from multiple disciplines should put their heads together and collaborate.

Based on work with over 300 clients, Robosoft specializes in deriving value from Design Thinking by being focused on analyzing the changing Digital Transformation needs of our clients and providing solutions for complex problems for small to large organizations. By using Design Thinking and Agile, companies can define and solve their Digital Transformation problems, by incorporating new functionalities using an iterative approach, which is transparent and minimizes risk. Whether the transformation is for business development, administration, operations, finance or marketing, whether you are trying to improve a process that simplifies the lives of employees or customers, or whether you are trying to make progress on a strategic initiative, Design Thinking is your answer to accelerate this business transfiguration. As the contexts change, organizations need to evolve faster than ever and keep redesigning themselves… everyday.

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