Implementing a customer data platform (CDP) is a long-term investment. As a foundational component of your customer data management infrastructure, you need to select the best CDP from the start. To do that, you must first understand your organization’s level of digital maturity to prioritize the right CDP use cases and outline a roadmap for digital transformation.
What is Digital Transformation?
Let’s start with defining digital transformation. Digital transformation is:
“… the cultural, operational, and organizational changes a company goes through when implementing the modern digital technologies, processes and standards needed for successful customer centric business strategies.”
Organizations constantly face challenges related to evolving customer demands, new market conditions, and changing competitive landscapes. An organization’s status quo, especially if it’s tied to legacy technology, dated processes and operations, must evolve to remain competitive and successful.
Every organization is on its own digital transformation journey – there’s no one-size-fits-all approach or roadmap. That’s because every organization is at different stages of digital maturity.
What is Digital Maturity?
Digital maturity is defined as an organization’s ability to respond to shifting technology trends in order to create value that provides a competitive advantage. Maturity is based on a number of factors, such as company size and age, existing legacy technology and processes, and a culture resistant to change.
Digital maturity isn’t a one-time achievement. Instead, it’s a flexible, dynamic continuum that takes time to develop. Organizations will advance to higher levels of digital maturity as they implement the technology, processes, operations, and other required organizational changes. A digital maturity framework outlines the roadmap for these digital transformation projects, and provides guidelines for navigating the journey.
Where Does a CDP Fit in the Digital Maturity Framework?
So, what does a CDP have to do with digital maturity?
The customer is at the center of all digital transformation programs today. Creating loyal customers, building the right products and services, addressing privacy and security, and creating exceptional personalized customer experiences are critical to business. To do all that, you need customer data.
In a recent study on customer data maturity, 78 percent of data management professionals use centralized data as part of their customer data strategy. A CDP is the key to harnessing that data by creating a comprehensive master data source that provides organizations with the information and actionable insights it needs to fuel digital transformation programs.
According to Isaac Sacolick, StarCIO, CDPs are “central to running a modernized, integrated, smart, and fast digital business.”
Selecting the Right CDP Use Cases For Your Roadmap
Deloitte and the TM Forum introduced the Digital Maturity Model (DMM) in 2018. This model helps organizations evaluate their digital maturity across five key dimensions:
- Customer
- Strategy
- Technology
- Operations
- Organization and Culture
The TMForum later added a sixth dimension: Data, which:
“Evaluates the organization’s ability both strategically and operationally to ethically and effectively use data and information assets to maximize business value.”
When a digital transformation roadmap is defined, it looks at where the organization is in terms of its digital maturity to understand how to move forward. Defining the right CDP use cases to implement along the journey is part of this process to ensure quick wins, and deliver long-term value.
Sacolick says that the CIO must work with their business peers to identify business goals and map those to technology, innovation, and data-driven capabilities. Organizations can drive success quickly by focusing on customer-centric use cases first (i.e., new markets or products, better customer experiences).
“Targeting growth opportunities first and efficiency second enables business model evolution, helps business leaders shift away from legacy business practices, and paves the way for investing in quality improvements, automations, safety, and other operational needs,” Sacolick said.
Customer-centric CDP use cases could include improving marketing or targeted advertising programs, personalizing experiences, applying predictive models and artificial intelligence to offer contextualized content, or supporting sales when engaging with high-value customers. Customer-centric use cases also apply to customer service and support.
Evaluating CDP Vendors: Key Considerations
There are many CDP vendors out there, and they are all different. Some are pure CDPs built as customer data platforms from the ground up, and that is their core capability. Others have evolved from other types of software to include CDP capabilities. Understanding how these CDPs differ, and how they can support your use cases is essential.
When you start the selection process, you’ll need to bring together a core group of stakeholders across the organization, especially those in key groups such as marketing, sales, customer support, and IT. Each of these groups has its own set of use cases and requirements they expect the CDP to support. Bringing them in at the selection process ensures their needs will be met, and they buy into the selected solution.
The selection team outlines the primary use cases for the CDP, gathers requirements, and prioritizes them. They will then use this information to choose a solution. These primary use cases help define the transformation roadmap, so it’s critical to align prioritization to business goals and the level of digital maturity.
Another important digital maturity consideration when selecting the CDP is understanding what will be required from the organization in terms of roles, skills, and processes. For example, people will need to be trained to set up and manage the CDP and support its users. Selecting a CDP without considering operational changes that will need to happen within the organization could lead to adoption and implementation challenges further down the line.
Achieving Digital Transformation Over Time
According to Sacolick, successful digital transformation initiatives,
“…start with articulating a business vision, driving a planning process based on market and customer needs, and engaging business stakeholders early in the journey. From there, organizations should adopt agile methods to research customer opportunities, discover key business requirements, identify primary data sources, and drive an intelligent CDP vendor selection.”
There are many similarities between developing into a mature digital organization and implementing a CDP. Both require a cross-functional team. In the report, “Achieving Digital Maturity,” 70 percent of digitally mature companies said they are increasingly organized around cross-functional teams. Organizations that keep data operations in silos cannot connect their customer data and cannot bring about the changes required to transform.
Getting the right data together, ensuring its quality, and unifying it for analysis is essential, but expect it to be a process that will take time.
“Don’t try and do it all at once and grab all your data from everywhere and push it into the CDP,” Kim Davis, editorial director, MarTech, said on an episode of Customer Data Perspectives. Be guided by the use cases you’re planning to undertake, which will help prioritize the data to focus on.”
Digital transformation and implementing a CDP are long-term investments. Implementing small use cases that show quick wins, experimenting, and iterating, as well as working on enterprise-wide initiatives that impact more groups, is vital to growing digital maturity over time.
