Thursday 15 November 2012

Customer-facing digitization creates the most value

In a recently published research briefing from MIT CISR, the authors have recommended that digitization of customer facing processes should be given higher priority than that of shared services and operations processes. Their recommendation is based on the study in which they assessed degree of digitization by examining 12 core enterprise processes in three key areas as follows:

  1. Shared Services: budgeting and financial management; closing the book; recruiting and hiring; employee performance; corporate performance
  2. Operations: supplier performance; fulfillment; logistics and supply chain
  3. Customer facing: identifying sales prospects; managing customer relationships; market testing; identifying customer needs
With a sample of two thousand firm, the key finding is that having more digitized customer-facing processes seems to help performance, particularly growth: firms with digitization of customer-facing processes in the top 25% had a median revenue growth of 9%, compared to 4% median revenue growth for the entire sample.

I agree with this recommendation but for a reason other than mentioned in the research briefing. I think digitization of shared services and operational processes can help improve profitability but to increase revenue, you need to enhance digitization of customer facing processes. My two cents worth!

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