Jace An: 77 building bloks of digital transformation

PROLOGUE

A digital capability is defined in this book as an organizational capacity and ability to produce intended business outcome in the digital space by combining process, people and technology elements in a way that is unique to each organization.

• A Process element includes process flow, input & output information, and business rules, policies & guidelines.
• A People element includes organizational structure & culture, and people’s roles, responsibilities & skills.
• A Technology element includes applications, data, infrastructure, facilities and equipment around digital technology.

Digital business operations is a multi-disciplinary area where business and IT converges and works together to produce business outcomes in the digital space.

It is commonly acknowledged that Social, Mobile and Cloud are among the most relevant factors of the contemporary digital era. Those three things are all related to ‘digitized user interactions’.

Customers reveal themselves to businesses through their digitized interactions.

The Digital Capability Model consists of 12 mega capabilities and 77 capabilities that are based on global best practices.

Thanks to digitized customer interactions, customer behavior and interaction can now be observed objectively. This is why managing customer experiences and journeys are becoming more critical in the digital age than ever before.

All channels, front-office, middle-office, and back-office, should be aligned with strategically developed customer experience journeys. This concept is core to the formation of the Model.

Below are the overall definitions and indicators of a maturity level of each digital capability:

• Level 0: Non-existent
  • No digital capability exists.
• Level 1: Ad hoc
  • The level exists in ad hoc. The overall digital strategy is however absent and the capability may be in the pilot phase.
• Level 2: Basic
  • The ad hoc level is constantly enhanced to leverage bottom-up improvement opportunities. Functionality gets rich and upgraded.
• Level 3: Defined
  • Digital vision and strategy drives investment in the capability. This level is not a key differentiator, nor does it provide competitive advantage.
• Level 4: Optimized
  • The performance of the capability is traced, measured and improved against pre-defined KPIs (Key Performance Indicators) and metrics.
• Level 5: Progressive
  • The capability level is fully integrated with other digital capabilities. It is considered truly market leading and best practices in the industry and market.

MEGA CAPABILITY 1. DIGITAL CUSTOMER EXPERIENCE MANAGEMENT

Digital Customer Experience Management is a set of digital capabilities used to enhance customer experience throughout all digital interactions with all levels of organization, e.g. marketing, sales, delivery, and support.

While the Digital Capability Model has extensive implications to almost every operational area of an organization, its primary focus is on improving marketing and sales capabilities and effectiveness by leveraging contemporary digital channels and technologies.

There are 5 capabilities in this mega capability:

• Digital Customer Journey Management
• User Research
• Usability Analysis
• User Experience Designing
• User Experience Testing

The end goal of this mega capability is to strengthen customer relationship that affects the bottom line directly.

A digital journey map produced through Digital Customer Journey Management. User Research will allow user behavioral patterns to be captured. To design user interactions at each digital touchpoint of the digital customer journey map for User Experience Design. Ease-of-use is the most important for customer experience enhancement. Making Usability Analysis another standalone capability. Through User Experience Testing, User Experience Designs should be tested.

CAPABILITY 1-1. DIGITAL CUSTOMER JOURNEY MANAGEMENT

Digital Customer Journey Management is a digital capability that helps customers along their journey from brand awareness to purchase and after – services. A digital customer journey map is a visual presentation that describes a Customer Journey on digital channels.

In general, a digital customer journey map consists of a persona, journey stages, touchpoints, interactions, and route.

A number of customers share common behaviors. Those who share common behaviors are grouped into a distinctive customer segment.

In general, the groups that are target customer segments accounting for 20 ~ 40 % of total customers, while generating 60 ~ 80 % of total operating profit or revenue.

It is advisable to create a persona representing a customer segment when a journey map for a customer segment is designed.

An end-to-end customer journey commonly includes the following stages:

• Awareness stage: customers make an initial contact with a product or brand.
• Interest stage:
• Preference stage: the brand becomes one of the preferred options.
• Search stage:
• Analysis stage:
• Purchase stage:
• Use stage:
• After – service stage:

A touchpoint is where and how a customer interacts with a brand. A user may initiate interactions with a brand or the interactions may be initiated by the organization.

The former type of interactions is to ‘meet the wants’ of the customer, while the latter is to ‘create or awaken the needs’ of the customer.

Different interactions can be generated at the same touchpoint in different journey stages. A description of how to design interactions:

• Define the reaction expected from the persona.
• Define key messages to be delivered at a touchpoint in a journey stage.
• Repeat the processes.

Manage master data for a journey map such as customer segment, persona, journey stages, digital touchpoints, customer interactions, scenario, route, etc. Analyse the gap between a current map and a future map.

CAPABILITY 1-2. USER RESEARCH

User Research is a digital capability used to understand customer behaviors, customer wants, customer needs and customer motivations by incorporating experimental and observational research; customer wants are explicitly expressed by customers, while customer needs are hidden or unknown to customers.

A common profile of a customer segment includes, but is not limited to:

• Demographics
• General value, belief & attitude
• Situational goals
• Preferred channels
• Information searching patterns
• Decision making patterns
• Purchasing patterns
• Annual revenue
• Cost to serve

User research should fill the gap between the data available in your transactional and analytical databases, and the data required to design interactions and user experiences.

CAPABILITY 1-3. USABILITY ANALYSIS

Usability Analysis is a digital capability to analyse how users interact with the layout and contents that digital touchpoints provide.

Usability Analysis is inherently an integral part of a broader concept of user experience design. It therefore aims at providing usability requirements and assessment criteria to the User Experience Design capability, to help create simpler and easier-to-use interfaces.

Usability Analysis often follows industry-leading practices such as the 10 usability heuristics developed by Jakob Nielsen:

• Visibility of system status
• Match between system & the real world
• User control & freedom
• Consistency & standards
• Error prevention
• Recognition rather than recall
• Flexibility & efficiency of use
• Aesthetic and minimalist design
• Help users recognize, diagnose, & recover from errors
• Help & documentation

CAPABILITY 1-4. USER EXPERIENCE DESIGNING

User Experience (UX) Designing is a digital capability used to design and maintain user experiences in interactions with a brand, product, and organization. It enhances user satisfaction and loyalty by providing meaningful and personally relevant experiences, as well as improving accessibility, ease-of-use, and pleasure.

User experience designs should be aligned with the interactions at touchpoints defined in a digital customer journey map.

After the messages and customer reactions have been designed, the delivery methods for messages and reactions should be designed.

CAPABILITY 1-5. USER EXPERIENCE TESTING

User Experience Testing is a digital capability used to evaluate user experience designs across all digital channels and devices at touchpoints. It involves target users during testing to ensure that the user experience designs are implemented as is intended by both the requirements for experience designs, and the directions from a journey map.

In order to test user experience designs and implementations, test plans that have test objectives, test scope, tester recruiting, testing tools, testing processes, etc. need to be developed. Test scenarios and test cases also need to be developed to conduct the tests.

A test scenario for user experience testing is commonly derived from a common route a persona of a target customer segment may take on a customer journey map.

A test case should have input, expected output and action to perform a specific test action. A single test scenario has multiple test cases.

MEGA CAPABILITY 2. SOCIAL INTERACTION

Social Interaction is a set of digital capabilities used to facilitate interactions, both between end-users and between end-users and an organization through social media channels. The mega capability is not only to help grow business and improve business operations, but also to benefit the customers by ensuring that they get the right advice and support through Social Interaction, enabling them to make informed decisions.

The mega capability helps create brand awareness, interest and preference for the broader audience, as well as creates word of mouth through loyal customers.

Social Interaction has the following digital capabilities:

• Social Listening
• Social Media Marketing
• Social Media Servicing Online
• Community Management
• Rating & Review Management
• Content Moderation
• Social Crisis Management

CAPABILITY 2-1. SOCIAL LISTENING

Social Listening is a digital capability used to capture, store, and analyse a massive amount of information generated by digital users on social media about a brand and an organization in a (near) real time.

While Social Listening policies, processes, and workforce are important for Social Listening, Social Listening tools are the key to the successful implementation of the Social Listening capability.

The functionality of a Social Listening tool includes, but is not limited to:

• Data capture
• Data store
• Data analysis
• Data presentation

CAPABILITY 2-2. SOCIAL MEDIA MARKETING

Social Media Marketing or Social Marketing as defined in the context of the Digital Capability Model is a digital capability used to manage contents and interactions on social websites. It is used to attract the attention of social website users and encourages them to share the contents and information with their social network. This results in the products, services or brands being promoted on the social network.

The content and information that need to be delivered to social website users are created and maintained by the Knowledge & Content Management capabilities of the middle-office of the Digital Capability Model.

The proper execution of the Social Media Marketing plans should be able to:

• Shape a new brand identity,
• Raise brand awareness,
• Build positive brand reputation,
• Increase website traffic,
• and Improve relationship with prospects.

Results of Social Listening are commonly used when performing Social Media Marketing activities.

CAPABILITY 2-3. SOCIAL MEDIA SERVICING

Social Media Servicing or Social Servicing as defined in the context of the Digital Capability Model is a digital capability used to provide customer service and customer support through social websites.

The responsibilities of customer services and support include fulfilment of customer request throughout the whole customer journey: before, during and after a purchase.

In order to provide effective after-service on social websites, the functionality of a Social Servicing tool to manage customer requests on social websites needs to be implemented.

Customer requests, feedback, and even claims are great sources of improvement and innovation in product development and quality management.

CAPABILITY 2-4. ONLINE COMMUNITY MANAGEMENT

Online Community Management is a digital capability used to build, grow and guide an online community on social media to support social interactions, marketing activities, and customer services. This digital capability helps enhance brand reputation and power.

One of the critical missions of online community management is to manage loyal members and help them to lead the community. Community members will willingly follow the opinion leaders.

An Online Community Management tool include the following functionalities:

• Create and manage online communities and user groups.
• Organize community members, discussions, and community content.
• Enable community members to share documents, knowledge, experiences and personal stories.
• Enable community managers to engage internal employees in a discussion automatically.
• Organize online and offline networking.
• Provide functionality to host online conferences and webinars.
• Provide functionality to encourage product knowledge transfer and learning.
• Analyse performance of online communities, e.g. traffic to the community, the number of community members, engagement of the members, etc.

CAPABILITY 2-5. RATING & REVIEW MANAGEMENT

Rating & Review Management is a digital capability used to monitor, collect, respond, share, and encourage ratings and reviews on company, products and services on rating & review websites, social media, and the official website of an organization.

Rating & Review Management includes all organizational abilities both to encourage customers to provide favorable ratings and reviews on rating & review websites or social media, and to respond quickly and effectively to unfavorable ratings and reviews.

Principles, policies and procedures on how to respond to those negative ratings and reviews need to be implemented. They should for example provide guidance on: How to assess whether it’s worth responding. How to assess the issues. How to follow the different rules of different rating & review websites. How to assess whether it is a false accusation. How to resolve the issues, including whether to respond privately or publicly. How to communicate with the customer in question and the rating & review website.

CAPABILITY 2-6. CONTENT MODERATION

Content Moderation is a digital capability used to screen and eliminate content that is irrelevant, obscene, illegal, or insulting to improve the quality of contents and maintain the identity of an online community and a social website. It involves managing users who create that type of unacceptable contents as well.

Centralized moderation is the moderation performed by dedicated content moderator (s). Dedicated content moderators may be professionals hired by the organization, or volunteers selected by the organization from community users. Decentralized moderation is performed by viewers after content is posted. Centralized modernization can be used in conjunction with decentralized moderation by sharing some of the responsibilities for moderating content.

A comprehensive Content Moderation tool detect unacceptable content and the user creating the content before, or as soon as it is posted. Provide a word filter functionality in which a list of banned words is stored and maintained. Automate the workflow of the content moderation, review, approval and publish processes.

CAPABILITY 2-7. SOCIAL CRISIS MANAGEMENT

Social Crisis Management is a digital capability used to mitigate the probability and the impact of major incidents that threaten to harm the organization and stakeholders.

The first step of Social Crisis Management is to build an ability to detect every possible threat to the organization and its stakeholders in social websites and news websites.

A threat can be evaluated against the two criteria combined as follows:

• Probability
• Business Impact

Threat = Probability x Business Impact

After evaluating a threat, mitigation plans should be created and communicated to all parties that could be impacted by the threat.

MEGA CAPABILITY 3. DIGITAL MARKETING

Digital Marketing is a set of digital capabilities used to acquire and retain customers across multiple digital channels by increasing digital traffic and customer engagement. Digital Marketing activities should be based on a single view of customers across multiple digital channels to be seamless across the discrete digital channels, and be guided and directed by the customer routes mapped out on a customer journey map.

CAPABILITY 3-1. DIGITAL BRAND MARKETING

Digital Brand Marketing is a digital capability used to build and promote a brand to customers in the digital space, so that customer’s perception of the brand can move from the initial stage where a customer is aware of the brand, all the way up to the final stage where the customer is loyal to the brand.

Digital Brand Marketing is all about managing activities to promote customer perception of a brand in the digital space.

A Digital Brand Marketing funnel consisting of the following stages:

• Digital Brand Awareness stage
• Digital Brand Interest stage
• Digital Brand Preference stage
• Digital Brand Memory stage
• Digital Brand Trial stage
• Digital Brand Loyalty stage

The Digital Brand Marketing funnel is not a sales funnel used to facilitate and manage sales processes. The Digital Brand Marketing funnel focuses on creating a favorable brand image in customers’ mind, and does not necessarily increase sales.

To make a Digital Brand Marketing funnel work better, the stages of the funnel should be aligned with Digital Customer Journey stages.

CAPABILITY 3-2. SEARCH ENGINE OPTIMIZATION

Search Engine Optimization (SEO) is a digital capability used to increase visibility of an organization’s web pages in search engine’s results of un-paid search, which is also known as organic search.

One of the most important factors for digital professionals to take into consideration for a successful SEO strategy is that an increase in the visibility of a brand on un-paid search engine results is heavily dependent on the increase in customer mind share of a few keywords the brand represents.

The SEO keywords should be consistent with market segmentation, product positioning and mind positioning in the digital space.

CAPABILITY 3-3. PAID SEARCH

Paid Search is a digital capability used to increase website traffic by purchasing search results on a search website and search network of the search engine. Paid Search is a type of paid inclusion where ads are shown on a search website or search network of a search engine when a user types in specific keywords.

For Paid Search, there are a number of options, including paying for the number of clicks on ads – CPC (cost-per-click) also known as PPC (pay-per-click) – or the number of impression when ads are displayed – CPM (cost-per-impression). CPC is more commonly used than CPM, as CPM does not guarantee that the impressions result in website visits.

The digital capability encompasses all abilities to plan Paid Search, monitor the progress of its initiatives, evaluate the performance of the initiatives, and revise the Paid Search plan accordingly.

A Paid Search plan commonly includes the following:

Measurable objectives: the achievement of an objective can be measured with the number of responding users, impressions, clicks, visits, conversion rate, sales etc.

Target audience: the target audience of Paid Search.

Keywords: target keywords of Paid Search.

Media: suitable digital media for the objectives and target audiences should be planned.

Messages: effective messages can be created by considering the objective, target audience, media and expected response from the audience.

Reach & frequency: the planning should include how far the message should reach.

Expected response from audience: the planning should describe how the target audience would feel

Landing page: a landing page is part of an entire digital marketing campaign just as Paid Search is.

CAPABILITY 3-4. CONTENT TARGETING

Content Targeting is a digital capability used to increase website traffic by showing ads on content publisher websites of the content network where the content of these websites are relevant to the ads.

Content Targeting is a type of paid inclusion where an ad is shown on the content network of a search website, whereas Paid Search is another type of paid inclusion where an ad is shown on a search website.

Content Targeting can be more effective than Paid Search in finding the right customers who are relevant to an advertisement.

A survey has suggested that Click Thru Rate (CTR) of Content Targeting is lower than that of Paid Search.

Content Targeting capability is to increase the effectiveness of paid advertising by correctly targeting content on the content publisher network, rather than keywords used for search.

CAPABILITY 3-5. AFFILIATE MARKETING

Affiliate Marketing is a digital capability used to increase website traffic and even promote purchase by showing advertisements on the websites of affiliates of a network that provides an affiliate-marketing program and platform.

Affiliate Marketing is one of the paid advertising methods where an advertiser pays commissions to affiliates – content publishers – for their efforts and performance to bring visitors or traffic to the advertiser.

CAPABILITY 3-6. ONLINE ADVERTISING

Online Advertising, also known as Display Advertising, is a traditional way to buy a section of online media, such as a news channel, to push marketing messages to a customer mass or customer segment through banners or other types of advertisements made of images, flash, videos, audio and text. When a Display Advertisement is shown on a search website, it is not considered part of a search result by users, even though it can be shown based on search keywords.

Online Advertising is a digital capability used to plan, execute, monitor and measure advertisement in digital space.

CAPABILITY 3-7. DIGITAL CAMPAIGN MANAGEMENT

Digital Campaign Management is a digital capability used to plan, execute, monitor, and measure the marketing campaign in digital space.

Campaign planning starts with defining market problems in the digital space and, in general, the marketing problems mean gaps between digital marketing goals and the current state of digital marketing.

Campaign planning also includes defining campaign target audiences, campaign scenarios, campaign schedules, messages and channels that can be tailored based on individual preference, and cost.

When it comes to campaign management in the digital space, campaign management tools become a critical factor to the successful campaign implementation, as almost all campaign activities should be automated in the digital space, as opposed to the manual processes of campaign management in the offline world.

CAPABILITY 3-8. LEAD MANAGEMENT

Lead Management is a digital capability used to generate, capture, qualify, prioritize, and nurture a lead and convert it to sales. A lead refers to the organization’s initial contact with a potential customer. Leads are managed by Lead Management capability to convert them into sales. Organizations need to establish a sales funnel – conversion funnel – to manage conversion from leads to sales.

A lead is managed throughout the following lifecycle:

• Lead generation: A lead is generated when consumer interest or enquiry into products or services of the organization is initiated.
• Lead capture: When the customer’s interest or enquiry is captured by the organization, it becomes a lead.
• Lead qualification: When a lead is captured, it is qualified during the process of evaluating if the lead is worthy of investment in marketing effort and money.
• Lead prioritization: Once qualified, a lead goes through the process of prioritization.
• Lead nurturing: A lead is nurtured through the process of developing relationships with the customer at every stage of a brand marketing funnel, a sales funnel and a digital customer journey map.
• Lead closing: When the customer purchases the product or service, the lead is closed.

A comprehensive Lead Management tool should:

• Funnel management.
• Lead generation: a few Lead Management tools may provide the functionality through which customer interest is generated.
• Automated lead capture: the tool should integrate to the tools used by Digital Channel Management capabilities, Digital Marketing capabilities, and Social Interaction capabilities to capture leads.
• Intelligent lead routing: new leads should be assigned and routed to the appropriate personnel’s inbox automatically.
• Lead qualification & prioritization: the tool should qualify and prioritize based on pre-defined policies and criteria.
• Automated lead nurturing: the tool should provide templates for scheduling follow-up actions.
• Performance analysis: the tool should provide functionality to track and measure performance of Lead Management.

CAPABILITY 3-9. MARKETING OFFER MANAGEMENT

A marketing offer is a value proposition of a product, a service, or a package of products and services, possibly with dynamic pricing to drive customer engagements with an organization. A discount voucher, a promotional coupon, free subscription, and free trial software are good examples of a marketing offer. Marketing Offer Management is a digital capability used to create, present, deliver and measure tailored, personalized marketing offers to customers in the digital space.

Marketing offers are commonly provided to promote cross-sell, up-sell, or re-sell, but can be any offers to increase the number of members, increase brand loyalty, minimize loss, satisfy customers, or cope with competitor events.

The following are among the most common factors that could be considered when creating a new marketing offer:

• Products: All types of products, including trial products and accessories.
• Volumes: How many or much of the products are to be purchased.
• Services: All customer services to be provided before, during and after purchase.
• Pricing: Pricing structure, including fixed discount and dynamic pricing.
• Other benefits: Loyalty points, bonus credit, etc.
• Digital contents: Demo video, guidance e-book, blog post, webinar, etc.
• Customers: Whom to provide the offer to.
• Digital channels: Which channel to use to provide the offer.
• Offer period: When to provide the offer.

A Marketing Offer Management tool should enable and automate the processes to create, maintain, and deliver marketing offers and measure the performance of each marketing offer.

CAPABILITY 3-10. EMAIL MARKETING

Email Marketing is a digital capability used to create, send and monitor emails with marketing messages for promoting brands, products and services.

As the role of Email Marketing has shifted in the contemporary digital age, an Email Marketing tool does not need to be so comprehensive as to provide additional functionalities such as customer segmentation, content management, workflow management, and complex analytics.

An Email marketing tool may therefore include the following core functionalities:

• Visual editing
• Mailing list management
• Opt-in & opt-out option
• A/B testing
• Integration to other digital marketing tools
• Performance measurement
• Autoresponders
• Regulatory compliance

CAPABILITY 3-11. MOBILE MARKETING

Mobile Marketing is a digital capability used to make the best use of features of mobile devices to promote brands, products and services. Due to the nature of real-time, mobile, and personal use of a mobile device, Mobile Marketing best suits time and location sensitive services, augmented reality services, and other personalized and ubiquitously connected services where the other marketing methods and channels are not suitable.

Among others, location-based services (LBS) and augmented reality services are other reasons why many organizations use Mobile Marketing. Both services are provided based on ‘where you are’. Online content is combined with the user’s offline location and place.

If only mobile is to be used for digital marketing, the choice of a comprehensive mobile platform makes sense. If not, it would not be a fit-for-purpose solution as many of the additional functionalities are available from other digital capabilities.

CAPABILITY 3-12. MARKETING AUTOMATION

Marketing Automation is a digital capability used to automate routine marketing tasks, activities and workflows. In theory, the scope of the Marketing Automation capability encompasses the automation of digital marketing planning, execution, monitoring and operational analysis. In reality, the scope of Marketing Automation focuses on automation of the repetitive, routine side of planning, execution, monitoring and analysis, and aims to complement other digital marketing capabilities as an underlying automation platform.

Marketing Automation can also complement and help automate Lead Management further. Marketing Automation can for example help automate lead nurturing processes by automatically sending emails and other messages containing marketing offerings when triggered by an event, or scheduled by a marketer.

Marketing Automation collects all routine, repetitive, and regular marketing tasks required by the other digital marketing capabilities, or as part of ad hoc marketing activities into a central repository, and performs the tasks as pre-defined. Marketing Automation tracks and monitors the progress of the activities it has performed, and, if required, performs follow-up actions as pre-defined.

CAPABILITY 3-13. CONVERSION RATE OPTIMIZATION

Conversion is the transition from one stage to another in a marketing or sales funnel, e.g. transition from visiting stage to purchasing stage, depending on how the funnel has been defined. Conversion rate represents the speed of the transition from one stage to another.

Conversion Rate Optimization is a digital capability used to increase the rate of conversion from a visitor to a customer, or from a lead to a sale. It includes real time abilities to measure the number of leads, qualified leads, and visitors in each stage from a landing page to a destination page, analyse the cause of visitor bounce, and develop and deploy quick-fix solutions to decrease the bounce rate, or increase conversion rate.

A heat map is a visual representation of clicks that resembles thermal imaging. The map shows where people click and what they select on a webpage. It can tell you whether users click on the calls-to-action, or not.

A/B testing is a method of comparing two versions of a website to evaluate which version creates better conversion rates.

Multivariate testing is a method of comparing a few different variable changes on the web site.

MEGA CAPABILITY 4. DIGITAL COMMERCE

The purpose of the Digital Commerce capabilities is to help with the shopping processes, fulfil customer orders and provide customer services. Actual conversion to purchase is made during the Digital Commerce processes, and thus the Conversion Rate Optimization of the Digital Marketing capabilities also covers the shopping processes of the Digital Commerce capabilities.

CAPABILITY 4-1. ONLINE MERCHANDISING

Online Merchandising is a digital capability used to arrange a variety of products and services available for sales, and display them in such a way that they can stimulate interest and entice customers to make a purchase, and customers can find whichever product they wish to purchase.

Online Merchandising should ensure high customer engagement, low rate of website bounce, and quality customer conversions. It requires dynamic merchandising and customized content publishing to deliver a personalized experience that contributes to increasing customer engagement, sales and customer satisfaction.

Online Merchandising websites commonly provide the following functionalities:

• Functionality to create and maintain an online catalogue of products and services, and display them.
• Functionality for product browsing and keyword search.
• Functionality to collect data on customer preference for products and services from the middle-office or back-office capabilities, and dynamically display relevant products and services.
• Functionality to recommend other products or services complementary to the product a customer is perusing.

CAPABILITY 4-2. SHOPPING CART & CHECKOUT

Shopping Cart & Checkout is a digital capability used to collect product or service items for purchase in a shopping cart, and calculate a total for the order. Shopping Cart & Checkout include the following functionalities:

• Calculation of total amount of discount from multiple sources, including coupons and discount promotions.
• Calculation of packing and shipping charges and associated taxes.
• Integration with a loyalty program.
• Integration with Payment & Reconciliation capability.
• Invoice management.
• Express checkout.

CAPABILITY 4-3. PAYMENTS & RECONCILIATION

Payments & Reconciliation is a digital capability used to enable a retailer to calculate deductions for partners as soon as a customer makes payment.

Payment functions include:

• Payment by debit and credit card.
• Payment by gift card, coupons, and loyalty points.
• Payment by a combination of multiple payment options.
• Receipt management.
• Recurring payments.
• Signature capture.

Reconciliation functions include:

• Master data management for reconciliation.
• Real time calculation for reconciliation.
• Weekly or monthly batch calculation for reconciliation.
• Reconciliation data transfer to internal financial system.

CAPABILITY 4-4. ORDER MANAGEMENT & FULFILMENT

Order Management & Fulfilment is a digital capability used to take an order of product or service items that are available at the time of the order, and pick, pack, and ship the items as instructed in the order statement.

Order Management & Fulfilment functionalities include:

• Order management
• Warehouse management
• Logistics management
• Order fulfilment tracking

CAPABILITY 4-5. ACCOUNT MANAGEMENT & SELF-SERVICE

Account Management & Self Services is a digital capability used to maintain customer information, including membership profile, and purchasing and transaction history, and enables customers using their credentials to serve themselves before, during, and after purchase.

Account Management & Self-Services includes the following functionalities:

• Membership registration.
• Member profile, membership category and loyalty points.
• Preference management including communication tool, website layout, newsletters, etc.
• Purchasing, search and view history.
• Watch list and wish list management.
• Order change management.
• Warranty & claim management.
• Feedback & complaints management.
• Online service desk services, including online help topics, FAQs and live chat.

MEGA CAPABILITY 5. DIGITAL CHANNEL MANAGEMENT

Digital Channel Management is a set of digital capabilities used to harmonize, consolidate, or integrate multiple digital channels that are used for the interactions between target customers and all levels of an organization, to streamline customer experience across the multiple digital channels.

The only solution to respond to the proliferation of the digital devices and channels best, is not to become channel-intelligent, but to become channel-agnostic.

This is the key to successful Omni-channel management. Digital Channel Management has the following digital capabilities:

• Channel Mix & Optimization
• Cross-Business Integration
• Cross-Channel Integration
• Multi-Device Presentation

CAPABILITY 5-1. CHANNEL MIX & OPTIMIZATION

Channel Mix & Optimization is a digital capability used to build and fine-tune a digital channel portfolio to achieve the customer interactions intended at touchpoints on customer journey maps.

In the digital space, a digital channel portfolio should be optimized against performance indicators and metrics around conversion from one touchpoint and channel of a lower stage, to another touchpoint and channel of an upper stage as planned on a customer journey map, thus promoting collaboration and integration between the different digital channels.

CAPABILITY 5-2. CROSS-BUSINESS INTEGRATION

Cross-Business Integration is a digital capability used to consolidate, integrate, or harmonize the different digital plans and policies across the different business units, to achieve a single face to the same customers and provide consistent messages, content and offers throughout Social Interaction, Digital Marketing and Digital Commerce.

CAPABILITY 5-3. CROSS-CHANNEL INTEGRATION

Cross-Channel Integration is a digital capability to have all digital channels integrated and connected seamlessly to deliver consistent and seamless customer experiences across different digital channels. This digital capability aims to achieve the vision of channel agnostic integration or omni-channel convergence, in which customers barely recognize difference of services provisioned and provided in different channels.

Cross-Channel Integration capability involves harmonising marketing and sales policies and processes across different channels, to make sure that different digital channels offer consistent customer experiences.

MCI architecture is employed to integrate different channels seamlessly to enable harmonized channel policies and processes. A multi – channel integration architecture includes the following components:

• Channel Connectivity & Messaging: This component of MCI is used to connect many different channel devices with MCI architecture.
• Channel-specific Business Logic: This component is used to deliver business Logic that is unique to a channel.
• Channel-common Business Logic: This component of MCI is used to deliver business Logic that is common to all digital channels.
• Channel Process Orchestration: Channel Process Orchestration services are used when the navigation of a specific channel should be changed.
• Common Application Logic: This component is used to deliver non-business Logic services required for business Logic services to function.
• Channel Data Repository: All channel information, including customer information, customer contact history, marketing offer, and sales funnel status from different digital channels is consolidated into this centralized database.
• Application Connectivity & Messaging: This component is used to connect the MCI architecture to core digital applications.

CAPABILITY 5-4. MULTI-DEVICE PRESENTATION

Multi-Device Presentation is a digital capability used to reuse a single computer program for multiple devices. It is commonly known as ‘one-source multi-use’ for Presentation Layer of IT architecture.

In order to increase the reusability, Presentation Logic of a mobile app and a desktop application should be designed and developed by the architecture principle of Separation of Concerns.

According to the principle, Presentation Logic should be divided into three ‘concerns’:

• A concern that handles what the user’s request is and how to fulfil it.
• A concern that handles what to present to a user to fulfil the request.
• A concern that handles how to present it to the user.

This design principle for Presentation Logic is referred to as the MVC (Model, View and Controller) pattern in the architecture practice.

• ‘Controller’ components concern what the user’s request is and how to fulfil it.
• ‘Model’ components concern what to present to a user to fulfil the request.
• ‘View’ components concern how to present it to the user.

MEGA CAPABILITY 6. KNOWLEDGE & CONTENT MANAGEMENT

Knowledge & Content Management is a set of digital capabilities used to gather, store, distribute and publish knowledge and content that exists in an un-structured data format such as binary documents, image, audio and video, as well as those in structured data in a relational database.

Knowledge & Content Management has the following digital capabilities:

• Knowledge Management
• Content Lifecycle Management
• Digital Asset Management
• Aggregation & Syndication
• Web Content Management

CAPABILITY 6-1. KNOWLEDGE MANAGEMENT

Knowledge Management is a digital capability to create, store, share, use, and maintain knowledge which is a type of information that creates and preserves business value. Knowledge Management is comprised of Knowledge Collaboration and Knowledge Base Management.

Knowledge Collaboration capability commonly includes the following:

• A knowledge map that is used to define and organize knowledge on digital business and digital operations.
• Automated workflow for knowledge creation, addition, review and distribution.
• Social features such as tagging, liking, commenting and rating of a knowledge item.
• Knowledge community management such as a subject expert network, Q & A and discussion forums.

A knowledge map is a way to define and organize knowledge that an organization has, and locate a specific knowledge item in the organized knowledge pool.

Knowledge Base Management is used to store and maintain knowledge data in knowledge repositories .

Content management systems are commonly used to support Knowledge Base Management, as knowledge is managed as part of enterprise content.

CAPABILITY 6-2. CONTENT LIFECYCLE MANAGEMENT

Content Lifecycle Management is a digital capability used to create contents, add additional information to use and publish content better, approve content to be released, and maintain content until its end of life.

Content types define how content is managed throughout its lifecycle.

A content management system as a technology tool of Content Lifecycle Management automates content creation processes, or supports employees to create content.

Once content is developed, it is processed further for additional information to make sharing and maintaining the content easier.

The content metadata is added to facilitate content search, publishing, access, and retention, and the metadata includes the following:

• Search:  Author, date published, summary, keywords and topics.
• Publishing: Release date, audience, channel and touchpoint.
• Access: Rights to view, save and edit.
• Retention: Archiving and retention period.

Content indexing, content format conversion, document assembly, content tagging and rule-based content publishing are also supported to manage content better.

A content taxonomy is a way to organize digital content into hierarchical classification. A content taxonomy is used for content browsing or search, a navigation tree and site map of a website, knowledge base and knowledge map, Cloud-drive folder structure, data exchange such as XML (eXtensible Markup Language), and many other purposes. All digital content, including digital assets and web content, are organized into a content taxonomy.

The value of a content taxonomy lies in improved access to the right content and increased employee productivity through reduced time needed to find the right content.

CAPABILITY 6-3. DIGITAL ASSET MANAGEMENT

On one hand, a digital asset is a subset of digital content mentioned earlier and a digital asset is therefore managed as digital content is managed. On the other hand, a digital asset is a subset of organizational assets that has significant monetary value and should therefore be created, maintained and protected as an enterprise asset of an organization.

Digital Asset Management is a digital capability used to organize, manipulate, store, retrieve, distribute, secure and back up digital assets, such as textual content and media content that have significant value to an organization.

The purpose of Digital Rights Management is to manage access to digital assets and prevent unauthorized access to them.

Digital Rights Management is at the core of Digital Asset Management and commonly provides the following functionalities:

• Copyright and intellectual property protection.
• Encryption and decryption management.
• Access control management.
• Usage tracking and metering.

CAPABILITY 6-4. CONTENT AGGREGATION & SYNDICATION

Aggregation as part of the Content Aggregation & Syndication capability is the process of pulling or receiving digital content from different content sources inside and outside an organization, according to pre-configured aggregation rules.

In contrast, the syndication part of the Content Aggregation & Syndication capability is the process of pushing or sending digital contents to different content consumers other than the organization’s own websites, according to pre-configured syndication rules.

Content syndication may have a negative impact on your Search Engine Optimization if the syndication is not properly planned.

CAPABILITY 6-5. WEB CONTENT MANAGEMENT

Web Content Management is a digital capability used to author, publish and manage web pages, and enable collaboration to create and revise the web pages, even with little understanding of programming languages or mark-up languages.

All types of content are published onto a web site through Web Content Management. Digital assets may for example be produced through Digital Asset Management processes, stored and maintained in a content repository of the Content Lifecycle Management capability, and published on a web site through a Web Content Management tool.

MEGA CAPABILITY 7. CUSTOMIZATION & PERSONALIZATION

Customization & Personalization is a set of digital capabilities used to manage the relationship between an organization and its customers by knowing more about their customized wants and personalized needs.

By definition, customization is performed to meet ‘Wants’ that customers express explicitly because they know what they want, whereas Personalization is conducted to meet ‘Needs’ that an organization identifies through analysis of customer behaviors because customers are often unaware of what they need.

Customization & Personalization capabilities have a middle-office processing style in terms of the IT architectural pattern: small transactions occur frequently on a real-time basis in the front-office, while large transactions occur intermittently in the back-office and middle-office processing style is in between the front-office and back-office processing styles. The middle-office operations are integrated seamlessly with the customer-facing front-office operations so that front-office staff or IT systems are well equipped with customized or personalized content to interact with and respond to an individual customer, or customer segment, to socialize with them, and market and sell to them effectively.

Customization & Personalization has the following digital capabilities:

• Customer Preference Management
• Customer Communication Management
• Social Behavior Management
• Interaction Tracking & Management
• Customer Loyalty Management
• Digital Customer Services

CAPABILITY 7-1. CUSTOMER PREFERENCE MANAGEMENT

Customer Preference Management is a digital capability used to collect and maintain information on customers’ preference. The preference data is either ‘Wants’ collected directly from a customer, or ‘Needs’ perceived and captured through internal analysis of customer behaviors.

Customer ‘Wants’ are gathered from front-office operations. ‘Wants’ are different from ‘Needs’. ‘Needs’ are captured in the back-office operations and given to Customer Preference Management. ‘Needs’ data is analysed and discovered by data analysts or analytics tools that identify customer preference patterns and extract preference data from the patterns.

Many companies embark on a strategic business initiative to establish a single truth of customer data across all levels of their organizations.

Another challenge of maintaining customer preference data is that once the data is collected from customers, it becomes outdated quickly and the cost of keeping it up-to-date can be expensive.

CAPABILITY 7-2. CUSTOMER COMMUNICATION MANAGEMENT

Customer Communication Management is a digital capability used to plan, implement, monitor and adjust how an organization communicates with customers to improve customized and personalized communications. At the core are the functionalities to extract, compose, author, format, print, deliver, store, or retrieve communication messages such as letters, bills & invoices, statements, policies, quotations, proposals, contracts, manuals, or customer correspondence as per the customer’s preferred and available communication options to better communicate with a customer or a segment of customers.

Below is a high – level view of the customer communication processes:

• Create template
• Populate content
• Customize format
• Deliver messages

CAPABILITY 7-3. SOCIAL BEHAVIOUR MANAGEMENT

Social behavior is defined as a type of customer behavior on social media and online communities. Customer behavior is analysed as part of the analysis for Customer Insights and Customer Segmentation to develop an insight into customers and a profile of a customer segment in the Digital Intelligence capability. Critical behavioral patterns can be identified to separate and organize customers into a few segments of customers.

Social behavior is analysed to find patterns in a similar way that customer behavior is analysed, and such activities as tweeting, sharing, posting, liking, commenting, or befriending are analysed to identify the patterns of those activities. Loyal, Leading, Onlooking, Chatting, and Complaining are among common examples of social behavior patterns.

Social Behavior Management is a digital capability used to store the information on behavioral patterns and needs in a structure that can be accessed readily.

CAPABILITY 7-4. INTERACTION TRACKING & MANAGEMENT

Interaction Tracking & Management is a digital capability used to track and manage customer interactions at all levels of an organization by providing interaction data and automating the interaction processes.

Every single interaction of a customer with an organization is managed as a ticket in the Interaction Tracking & Management capability.

CAPABILITY 7-5. CUSTOMER LOYALTY MANAGEMENT

Customer Loyalty Management is a digital capability used to plan and implement a loyalty program to increase brand loyalty of customers. It includes abilities to gather and analyse data representing customer loyalty, to plan and measure their loyalty to a brand. A loyalty program is used to reward and thus encourage loyal buying behaviors by using a membership structure and membership benefits.

The key to the success of Customer Loyalty Management does not lie in the loyalty program itself.

The key to the success of Customer Loyalty Management rather lies in its integration with other digital capabilities.

The following six digital capabilities should be integrated seamlessly without swivel chair integration:

• Interaction Tracking & Management,
• Customer Loyalty Management,
• Conversion Rate Optimization,
• Marketing Offer Management,
• Email Marketing,
• and Customer Preference Management.

CAPABILITY 7-6. DIGITAL CUSTOMER SERVICES

Digital Customer Services is a digital capability used to assist customers with products or services before, during and after purchase throughout the digital customer journey, to ensure customer satisfaction with an organization.

A Digital Customer Service tool commonly supports the following functionalities:

• Service desk management
• Issue management
• Request management
• Problem management
• Work order management
• Appointment management
• Communication tool management
• Claim & warranty management
• Rule-based work routing management
• Self-service portal
• Customer satisfaction management
• Analysis & reporting
• SLA management

MEGA CAPABILITY 8. DIGITAL INTELLIGENCE

Digital Intelligence is a set of digital capabilities used to extract and transform transactional data from the front-office and middle-office capabilities, populate data suitable for deep-dive analysis in the back office, analyse for trends and patterns in the business transactions, and help executives and managers derive insights into the transactions for them to make informed decisions.

As Digital Intelligence is a subset of business intelligence.

Digital Intelligence has the following digital capabilities:

• Product Similarity Analytics
• Customer Insights
• Customer Segmentation
• Conversion Analytics
• Marketing Effectiveness
• Big Data Analytics
• Web Analytics Reporting & Dashboards

CAPABILITY 8-1. PRODUCT SIMILARITY ANALYTICS

Product Similarity Analytics is a digital capability used to analyse similarity among products in terms of which products and services are viewed, moved into carts, or purchased either ‘together’ or ‘in a row’.

The product similarity analysis can be performed in two ways:

• Association analysis
• Item-based collaborative filtering

The association analysis shows products that are close enough to each other to be used as a basis of product recommendation.

The terms Support, Confidence, and Lift are introduced briefly below, as they are frequently used for the association analysis of a shopping basket:

• Support represents how often the items are purchased together in total orders.
• Confidence indicates how often the items are purchased together under the condition of how often other items are purchased together.
• Lift shows how often the items are purchased together when compared to how often the items are purchased independently.

Each of the association rules has its strengths and drawbacks.

Item-based Collaborative Filtering, a.k.a. Item-to-item Collaborative Filtering, is used to identify which products are highly correlated by comparing the historical preferences of ‘customers’ who have purchased the same products. Item-based Collaborative Filtering is different from the association analysis in that customers enter into the equation as well.

Because customers’ preference is factored into the product similarity analysis, Item – based Collaborative Filtering is considered more personal than the association analysis.

CAPABILITY 8-2. CUSTOMER INSIGHTS

Customer Insights is a digital capability used to analyse and understand customer behaviors and intentions behind the behaviors to help acquire, develop and retain customers. Whereas the Product Similarity Analytics capability focuses on products, the Customer Insight capability focuses more on customers than on products.

This digital capability requires an ability to capture and maintain enterprise-wide customer data regularly to drive insights into the Voice of the Customer (VoC). It may model customer tendencies, predict frequency and time lapse of purchasing items and other behaviors, and measure the lifetime value of a customer.

The customer data includes basic customer profile, demographics, interactions, behaviors, preferences, security profile & privacy, product, events and campaigns.

Insights into customers involve understanding of customer needs, modelling of customer behaviors including purchasing actions, and an estimation of the customer lifetime value.

Customer Insights can be developed for a mass of customers, customer segments, or an individual customer.

CAPABILITY 8-3. CUSTOMER SEGMENTATION

Customer Segmentation is a digital capability used to divide a customer base into a few segments of customers that share similar characteristics, including demographics, behaviors and mindsets, and spending habits.

There are various ways of performing customer segmentations by combining the following dimensions:

• Demographics-based segmentation
• Behavior-based segmentation
• Value – based segmentation
• Need – based segmentation
• Attitude – based segmentation

Customer segments can also be used to facilitate a product recommendation by using User-based Collaborative Filtering in which products are recommended based on users’ similarity.

CAPABILITY 8-4. CONVERSION ANALYTICS

Conversion Analytics is a digital capability used to analyse a large amount of conversion data, capture trends and patterns, and help make decisions on future strategy to promote conversion in a conversion funnel.

This digital capability works closely with the Conversion Rate Optimization capability by providing conversion trends and patterns through deep-dive analysis of historical conversion data.

CAPABILITY 8-5. DIGITAL MARKETING EFFECTIVENESS

Digital Marketing Effectiveness is a digital capability used to measure the effectiveness of digital marketing programs and other efforts in terms of whether they meet their objectives or not. The digital capability includes abilities to:

• Define effectiveness and establish corresponding KPIs and metrics.
• Identify and collect source data used for measurement.
• Measure performance against the KPIs and metrics.

Here is an example of measuring digital marketing effectiveness by using conversion rate: “Digital Marketing Effectiveness = (Online Sales Amount from Lead-to-Purchase Conversion – Digital Marketing Cost) ÷ Digital Marketing Cost”

CAPABILITY 8-6. BIG DATA ANALYTICS

Big Data Analytics is a digital capability used to process and analyse a massive amount of data in un-structured or semi-structured format, in an effort to uncover hidden patterns, unknown correlations, or other business-meaningful information for social interaction, marketing, sales and customer service purposes.

Once big data is populated in distributed file stores and ready for analysis, traditional Business Intelligence tools, as well as new tools specialized in big data analysis, can be used to retrieve, analyse and present the data.

True value of big data analytics is derived from data correlation. Correlation is performed to capture hidden relationships between interactions, behaviors, events, content, products and many other actions and entities.

CAPABILITY 8-7. WEB ANALYTICS

Web Analytics is a digital capability to collect and analyse web data to understand effectiveness of a website and optimize web usage.

Data sources for Web Analytics can be collected in two ways: web server logging and web page tagging.

Web page tagging inserts scripts such as JavaScript into web pages, and these scripts return more specific information than web log data to a web server when the webpages are rendered on a web browser.

An organization can now take advantage of the Big Data Analytics capability to store, process and analyse the web data sources as if it is a Big Data source.

CAPABILITY 8-8. REPORTING & DASHBOARD

Reporting & Dashboard is a digital capability used to establish and maintain performance indicators and metrics, and measure and report performance of digital capabilities against the metrics to assist digital decision makers.

The automated collection of source data is the most critical factor for the success to this capability.

While the other Digital Intelligence capabilities are more focused on data population, data storage, and data analysis, the Reporting & Dashboard capability is more focused on presenting analysis results to users.

MEGA CAPABILITY 9. DIGITAL DATA MANAGEMENT

Digital Data Management is a set of digital capabilities used to collect, store, distribute, control and search data that is used for all the Digital Capabilities. The data used in the Digital Capabilities includes master data, reference data, metadata, transactional data and analytical data.

The amount of un-structured and semi-structured data generated from digital transactions poses a challenge for traditional data warehousing architecture in particular.

We will look at the following digital capabilities sitting under Digital Data Management:

• Non-relational Data Management
• Distributed Data Store Management
• Enterprise Search
• Master Data Management
• Data Quality Management
• Digital Data Policy Management

CAPABILITY 9-1. NON-RELATIONAL DATA MANAGEMENT

Non-relational Data Management is a digital capability used to store and retrieve a massive amount of un-structured and semi-structured data coming from many sources, such as social listening, web logs, interactions on digital touchpoints and even digital sensor activities.

A NoSQL database provides a mechanism where data modelled in ways other than relational modelling is stored and retrieved. It employs an approach that does not enforce a complex data schema, but brings the potential of high scalability.

Common approaches to a NoSQL database include Key-Value stores, Columnar stores, Document databases and Graph databases.

Key-Value stores are the simplest non-relational model. A key is a unique identifier for an item of data, while a value is either the data that is identified, or a pointer to the location of that data.

Columnar stores are more than Key-Value stores in that a key holds multiple properties, and each property can have a value. Google’s BigTable, Amazon’s Dynamo and Facebook’s Cassandra are examples of Columnar stores.

Document databases are semi-structured rather than un-structured, providing some degree of structure.

CAPABILITY 9-2. DISTRIBUTED DATA STORE MANAGEMENT

Distributed Data Store Management is a digital capability used to store non-relational data as well as relational data into memory-based or disk-based storage in such a way that the stored data is accessed and used by the front, middle, and back-office capabilities effectively and efficiently.

An In-Memory Data Grid (IMDG) is an advanced version of a distributed cache system for non-relational data, with some data processing functions embedded in the software.

A distributed file system is used to store a large amount of data distributed across multiple server machines in a highly distributed environment.

The Hadoop Distributed File System (HDFS) is one of the most popular distributed file systems.

A data lake is a logically centralized data repository and its tools used to populate, processes and retrieve the data.

A distributed file system can be used to implement storage for a data store architecture supporting data lake architecture.

CAPABILITY 9-3. ENTERPRISE SEARCH

Enterprise Search is a digital capability to enable users to locate the content or information they want quickly and accurately, through keyword search into a variety of sources, such as file system, intranet, content repository, e-mail, database, data warehouse and/or data lake.

The purpose of an inverted index is to allow full text search as fast as possible.

Content Classification by topic allows users to navigate the content by topics, rather than only by metadata.

Named-entity recognition functionality, also known as entity identification.

Text clustering functionality of an Enterprise Search.

Tagging & bookmarking functionality of an Enterprise Search.

CAPABILITY 9-4. MASTER DATA MANAGEMENT

Master data represents critical business objects, such as customers, products, suppliers, sales, divisions, costs and many other business entities of the organization. Master data is non-transactional, static data used to create transactional data. Customer data and product data, which are master data, are for example used to create a customer order, which is transactional data.

Without rich master data, rich transactional data is not possible, which leads to poor analytical data. Master data is therefore at the core of all enterprise data.

Master Data Management (MDM) is a digital capability used to collect, aggregate, match, consolidate, quality-assure, persist and distribute master data, to ensure consistency in data use by different digital applications.

Customer data and product data are the most important master data of all.

CAPABILITY 9-5. DATA QUALITY MANAGEMENT

Data Quality Management is a digital capability used to ensure that data is complete, correct, accurate and relevant throughout its lifecycle. It involves profiling data, establishing quality metrics and targets, designing quality rules, implementing data quality processes and IT system, reviewing exceptions, monitoring quality and cleansing data.

Poor data quality is one of the leading causes of failure or underperformance in Digital Intelligence capabilities.

Data quality can be measured against completeness, accuracy, consistency, timeliness, uniqueness and interoperability.

CAPABILITY 9-6. DIGITAL DATA POLICY MANAGEMENT

Digital Data Policy Management is a digital capability used to create and update policies, standards, procedures and guidelines on creating, updating, retrieving, maintaining, archiving and deleting enterprise digital data, including master data, reference data, code data, transactional data and analytical data, to ensure the data is consistent, secure and compliant with internal control policies, and external laws and regulations.

Data Policy documents commonly include policies, standards and procedures around:

• Scope of enterprise data.
• Responsibilities for data use and management.
• Data life cycle management from data creation to deletion.
• Data security.
• Policy breaches, etc.

MEGA CAPABILITY 10. DIGITAL INFRASTRUCTURE MANAGEMENT

Digital Infrastructure Management is a set of digital capabilities used to provide reusable, standard and inexpensive infrastructure services that other Digital Capabilities consume.

The proven practices for Cloud computing architecture patterns lay the foundation for Digital Infrastructure Services.

Digital Infrastructure Management has the following capabilities:

• User Interaction Services
• Process Integration Services
• Parallel Processing Services
• Artificial Intelligence Services
• Federated Access Management
• On-Demand Provisioning Services
• Digital Continuity Management

CAPABILITY 10-1. USER INTERACTION SERVICES

User Interaction Services is a digital capability used to support interaction between users and digital applications, and communication and collaboration between users.

There are three approaches to developing a mobile app: Web, Native and Hybrid.

CAPABILITY 10-2. PROCESS INTEGRATION SERVICES

Process Integration Services is a digital capability used to enable digital business processes to integrate seamlessly with one another by integrating applications with one another across on-premises and the Cloud.

The digital capability includes application connectivity, synchronous or asynchronous messaging, data transformation & formatting, workflow automation and process orchestration.

Applications and their integrations tend to change more often in the digital environments than in the past, due to the disruption and innovation in digital technologies. It is therefore recommended that integration of applications be loosely-coupled.

Having the integration ‘Asynchronous’ and ‘Stateless’ is two common ways to achieve a loosely – coupled integration:

• Asynchronous: The requesting application does not wait for the response from the responding application.
• Stateless: The responding application does not have any information on the state of the requesting application.

A web feed is a set of data or a content item that includes web links to the source of the data or the content item.

RSS (Really Simple Syndication) and Atom are two common web feed formats.

Digital Process Orchestration is used to design and change digital business processes, and automate the digital business processes with little programming by IT staff.

There are three components required to implement process orchestration: a process design tool, a process execution engine, and a process administration tool.

• A Process Design Tool provides the facilities needed to analyse and model digital business processes.
• A Process Execution Engine is the actual platform responsible for the execution of the business processes.
• A Process Administration Tool provides the operational support for the process execution with the capability of general process tracking, administration and event management.

CAPABILITY 10-3. PARALLEL PROCESSING SERVICES

Parallel Processing Services is a digital capability used to process massive sets of semi-structured and un-structured data, as well as structured data, in parallel on distributed computing nodes.

The idea behind the Parallel Processing concept is to break down a large set of un-structured or semi-structure data into many smaller segments of data, process the data segments on distributed nodes in parallel, and assemble the outputs from all participating nodes.

A common architecture for parallel processing has two types of components: Master and Slaves. The Master component plans the entire job consisting of many tasks and allocates the tasks and data to multiple Slave components. Slave components execute the tasks and analyse the data, and return their outputs to the Master component for final assembly of the output.

There are two popular implementations of the parallel processing concept: MapReduce and Spark.

MapReduce works well when a very large amount of data is processed, as it uses the Hadoop Distributed File System (HDFS) to store working data. It works better for batch processing than for real-time processing.

Spark is relatively new, thanks to its more advanced architecture using in-memory processing of data for better performance in real-time analysis of data flows.

CAPABILITY 10-4. ARTIFICIAL INTELLIGENCE SERVICES

Artificial Intelligence Services is a digital capability to perform tasks typically required of an intelligent being such as human being. The tasks may involve visual perception, speech recognition, patten recognition, decision-making, and translation between languages.

Machine Learning based AI is gaining momentum, particularly in the security and risk management areas in businesses. Threat detection, vulnerability assessment, fraud detection and credit risk assessment are good examples.

Machine Learning can support digital business operations in two ways:

• Strategic support
• Operational support

Use-cases in the Front-office:

• Digital Customer Journey Management
• Social Listening
• Social Media Marketing
• Rating & Review Management
• Social Crisis Management
• Paid Search
• Marketing Offer Management
• Marketing Automation
• Conversion Rate Optimization
• Lead Management
• Online Merchandising
• Channel Mix & Optimization

Use – cases in the Middle – office:

• Social Behaviour Management
• Interaction Tracking & Management
• Digital Customer Services

Use – cases for Digital Intelligence Product Similarity Analytics

• Customer Segmentation
• Conversion Analytics

Use – cases for Digital Data Management Enterprise Search

• Master Data Management

Some stages in Machine learning process:

• Data Pre-processing: Raw data – historical property sales data – is collected, cleansed, normalized, combined and transformed for the Machine Learning framework and algorithm to understand and consume.
• Feature Engineering: Features are extracted from transformed data. Features are structured data that have an impact on the output of a Machine Learning model.
• Modelling: A Machine Learning framework uses the features and some transformed data to develop the right model through which output – property sales price – is calculated.
• Testing: Some ‘other’ transformed data, which has not been used to develop the model, is used to verify that the candidate model produces reasonable results.

CAPABILITY 10-5. FEDERATED ACCESS MANAGEMENT

When a user tries to access an application, the application performs access management processes before granting the access. Access management consists of authentication and authorization.

Federated Access Management is a digital capability used to authenticate the identity of a user and to authorize the user for access to all digital resources inside and outside the organization, based on trust in a federated access service provider.

Federated Access Management should not be confused with Single Sign-On (SSO), in which users are not required to enter their log-on credentials each time they access a different website or application.

OAuth, combined with OpenID Connect, provides complete capability of federated authentication and authorization.

Another open standard, SAML (Security Assertion Markup Language), offers a complete framework for both federated authentication and authorization.

SAML is more widely used in enterprise digital environments, while OpenID and OAuth are commonly used in digital environments that are more open.

CAPABILITY 10-6. ON-DEMAND PROVISIONING SERVICES

On-Demand Provisioning Services is a digital capability to scale up and down or scale in and out automatically when required, so that IT administrators or the IT system itself can dynamically provision or de-provision application and infrastructure resources as requested or required.

The dynamic scaling of resources commonly requires three technical services:

• Monitoring Services
• Optimization Services
• Provisioning services

Cloud Bursting is another form of dynamic scaling. It is referred to as an automatic scaling of Cloud resources to redirect the traffic that overflows from an on-premises data centre to a public Cloud or Virtual Private Cloud, so that there is no interruption of services.

Cloud Bursting is the most challenging form of dynamic scaling due to its complex implementation.

CAPABILITY 10-7. DIGITAL CONTINUITY MANAGEMENT

Digital Continuity Management is a digital capability used to ensure that digital business continues if availability solutions fail and cannot restore digital capabilities because of such natural disasters and disastrous external incidents as fire, floods, earthquakes, strikes and war.

Disaster recovery solutions should be focused on the critical digital capabilities rather than all the digital capabilities.

The frequency of replication depends on the Recovery Point Objective (RPO) metric that describes the maximum-targeted period in which data might be lost from a disaster. If the RPO is for example one day, the replication must be made at intervals of 24 hours or less.

The Recovery Time Objective (RTO) is another metric frequently used for disaster recovery. If the RTO is for example one day, the system must be recovered within 24 hours or less.

MEGA CAPABILITY 11. DIGITAL ALIGNMENT

Digital Alignment is a set of digital capabilities used to establish overarching directions of digital capabilities to align with corporate business strategy, plan digital initiatives to improve digital capabilities and facilitate effective decision making on digital investment and value realization. It also includes the capability to collaborate across different business units and departments to plan and implement digital initiatives, and organizational readiness to change. Digital Alignment has the following digital capabilities:

• Digital Innovation
• Digital Planning
• Digital Governance
• Cross-Boundary Collaboration
• Digital Journey Readiness

CAPABILITY 11-1. DIGITAL INNOVATION

Digital Innovation is a digital capability used to monitor and analyse digital trends, capture their implications for industry dynamics, customer, competition, products, services, and supply chain, and apply them to digital capabilities to innovate the digital business.

Organizations are well advised to create an Innovation Funnel to manage the progress of taking innovative ideas from concept to reality as you go through the Digital Innovation processes repeatedly and create more ideas.

CAPABILITY 11-2. DIGITAL PLANNING

Digital Planning is a digital capability used to establish digital strategies by:

• Identifying the current state of digital capabilities,
• Designing a future state of digital capabilities,
• and Creating a road map.

The current state of a digital capability is assessed in terms of how People, Process and Technology are combined to work together to create business outcomes.

A blueprint of digital capabilities. The blueprint shows how people, processes and technology of a digital capability will be combined to work together to produce better outcomes than the current state.

A road map is all about “What to do” and “When to do it” to achieve the future state blueprints.

CAPABILITY 11-3. DIGITAL GOVERNANCE

Digital Governance is a digital capability used to make, sponsor and enforce the right decisions on digital business across the board.

Digital decisions should be made on digital investment, digital program oversight and digital operations.

Digital initiatives are planned through the Digital Planning processes.

How centralized a digital governance structure should be typically depends on two factors: how autonomous the business unit is in making a decision in the entire organization, and how different the nature of the business is from the corporate business portfolio.

CAPABILITY 11-4. CROSS-BOUNDARY COLLABORATION

Cross-Boundary Collaboration is a digital capability used to foster collaboration across all business units, functional departments, suppliers and partners, and consolidate or harmonize their digital strategies and efforts to maximize the synergy of digital investments, and prevent redundant efforts of establishing digital capabilities within each silo of department and organization.

Collaboration in Digital Planning is the most critical part of the Cross-Boundary Collaboration capability.

CAPABILITY 11-5. DIGITAL JOURNEY READINESS

Digital Journey Readiness is a digital capability used to manage organizational readiness to change themselves, to implement digital initiatives according to the roadmap to achieve target levels of digital capabilities described in future digital blueprints.

The organizational readiness can be measured against two criteria:

• Organizational willingness to change
• Organizational competency to change

Below are common criteria to assess the level of organizational competency to change.

• Leading ability
• Visioning & articulating ability
• Proactive planning ability
• Selling & marketing ability
• Participating ability
• Communication ability
• Training ability
• Integrating ability
• Supporting ability
• Transitioning ability

MEGA CAPABILITY 12. DIGITAL DEVELOPMENT & OPERATIONS

Digital Development & Operations is a set of digital capabilities used to develop digital capabilities in development environments, deploy them into production environments, and maintain and support the digital capabilities to be sustainable for a longer term.

Digital Development & Operations has the following digital capabilities:

• Digital Program & Project Management
• Digital Design Authority
• Digital Capability Development
• Digital Capability Introduction
• Digital Service Operations
• Digital Quality Management

CAPABILITY 12-1. DIGITAL PROGRAM & PROJECT MANAGEMENT

Digital Program & Project Management is a digital capability used to manage digital programs and digital projects. The digital capability includes performance metrics, management methodologies, management tools and skilled staff.

Digital program management commonly includes the following as its management scope:

• Resource management
• Vendor management
• Quality management
• Scope change management
• Capability release management
• Issue management
• Problem management
• Program risk management
• Financial management
• Contingency management
• Performance management

Digital project management focuses on creating and providing specific deliverables that are deployed into digital business environments for use by digital users.

Digital project management commonly includes the following as its management scope:

• Scope management
• Resource management
• Schedule management
• Task management
• Communication & collaboration management
• Quality management
• Project issue management
• Project risk management
• Functional Change management

CAPABILITY 12-2. DIGITAL DESIGN AUTHORITY

Digital Design Authority is a digital capability used to review digital designs and enforce decisions on the designs to ensure the integrity of programs and projects are maintained.

Digital Design Authority has the following characteristics:

• Program – level view
• Independence
• Authority

One of the responsibilities of the Digital Design Authority role is therefore to prioritize the design changes against two criteria: the importance of the change, and the cost and time of the change.

CAPABILITY 12-3. DIGITAL CAPABILITY DEVELOPMENT

Digital Capability Development is a digital capability used to analyse, design, implement and test the three elements of process, people and technology, which are required to achieve the future blueprint of a digital capability.

A business process model supporting the blueprint of a digital capability is commonly defined at the beginning of the development of a digital capability. The business process model may include a business process hierarchical structure, business process flows, business rules, inputs and outputs of each process.

Digital applications and digital infrastructure are designed and implemented as the technology element. The designs for the process and people elements provide the technology element with a baseline of business requirements.

Agile Development is a new paradigm of capability development that is iterative, incremental and continuous in its approach. It has been shaped to address the challenge of meeting frequent changes in requirements, designs and implementations.

Waterfall Development is non-iterative, sequential approach to capability development.

Agile Development offers the ability to change and adapt rapidly. It helps divide a scope initially identified into independent units of work.

Scrum and Kanban are among the most popular methodologies that implement the Agile Development approach. The Scrum methodology provides a set of principles, processes and roles to make iterative, incremental and continuous development. Kanban is a Just-In-Time (JIT), lean manufacturing method developed by Toyota. The basic idea is that a previous process delivers the exact amount demanded by the next processes. This will eliminate, or at least reduce, Work-In-Progress (WIP) and stocks unused by the next process. A Kanban, which literally means a signboard in Japanese, is used to communicate the demand of the next process to the previous process.

CAPABILITY 12-4. DIGITAL CAPABILITY INTRODUCTION

Digital Capability Introduction is a digital capability used to introduce part or all of newly developed digital capabilities into the organization, without disrupting existing digital business operations.

The existing workforce is evaluated in terms of roles and skills, and a gap analysis against the future roles and skill levels is performed.

This process helps to establish plans for workforce recruiting, training and deployment.

The transition to the new business policies and procedures of a new digital capability needs to be planned, managed and controlled, to enable the organization to follow and execute all the new digital business policies and procedures related to the digital capability.

The new application and its operating environment need to be transitioned. Data required by the new digital application needs to be populated.

Different business units or departments may have different infrastructure environments, and the potential differences in digital infrastructure environments need to be addressed before deployment of new releases.

CAPABILITY 12-5. DIGITAL SERVICE OPERATIONS

Digital Service Operations is a digital capability used to plan, deliver and measure day-to-day operational services that maintain digital capabilities and support users with the digital capabilities.

The technology element is the primary focus of Digital Service Operations, because the technologies behind digital applications and infrastructure tend to change faster and more frequent than the other elements.

ITIL is a set of best practices for managing and providing technology as a service.

The ITIL lifecycle has five stages:

• Service Strategy,
• Service Design,
• Service Transition,
• Service Operation
• and Continual Service Improvement.

During the Service Strategy stage, customer needs are captured, the service portfolio is assessed against the needs, and service improvement plans are established. The stage has the following management processes:

• Business Relationship Management
• Demand Management
• Service Portfolio Management
• Strategy Management
• Financial Management

Service levels and requirements are designed in terms of capacity, availability, security and service continuity during the Service Design stage:

• Service Level Management
• Capacity Management
• Availability Management
• Security Management
• Service Continuity Management
• Service Design Coordination
• Service Catalogue Management
• Supplier Management

Throughout the Service Transition stage, changes to services are initiated, conducted, tested and deployed. The Service Transition stage includes the following management processes:

• Change Management
• Transition Planning & Support
• Service Validation & Testing
• Release & Deployment Management
• Asset & Configuration Management

The Service Operation stage of ITIL is to run the deployed services, address incidents and fulfil user requests to keep business running as usual:

• Event Management
• Incident Management
• Problem Management
• Request Fulfilment
• Access Management
• Service Desk
• Application Management
• Technical Management

Continual Service Improvement is to assess the current state of services and processes, and to implement plans to improve the services and processes.

CAPABILITY 12-6. DIGITAL QUALITY MANAGEMENT

Digital Quality Management is a digital capability used to ensure that digital capabilities are developed in a way that the quality of digital capabilities is predictable and consistent during digital development, and that the quality is maintained throughout the lifecycle of the digital capabilities.

Digital Quality Management therefore includes ‘quality assurance’ activities to prevent defects, as well as ‘quality control’ activities to correct defects. Quality plans commonly include the following:

• Expectations from stakeholders on quality.
• Overarching principles to govern quality management.
• How quality work is to be performed in terms of how to prevent defects from a quality assurance perspective, and how to correct defects from a quality control perspective.
• How to improve quality management ability.

When it comes to the Digital Development & Operations capabilities, the traditional quality management frameworks do however not always work due to the iterative, incremental and continuous nature of development and delivery of Digital Development & Operations.

DIGITAL CAPABILITY PLANNING METHODOLOGY

The Digital Capability Model is used as a framework for the assessment of current digital capabilities and the design of future digital capabilities.

Planning methodology aims at supporting a full-scale digital capability improvement journey that diagnoses current digital capabilities, identifies needs for future digital capabilities, develops future digital capability blueprints and digital strategies, delivers one or more digital capabilities to meet those needs, and ensure that the value of those digital capabilities can be sustained over time.

• Stage 1. Identify current state.
• Stage 2. Design future state.
• Stage 3. Develop roadmap.

Stage 1 has the following 2 tasks:

• Task 1 – 1. Assess the current state operating model.
• Task 1 – 2. Define the maturity level of the current digital capability.

Stage 2 has the following 2 tasks:

• Task 2 – 1. Set the maturity level of the future digital capability.
• Task 2 – 2. Design the future operating model.

Stage 3 has the following 3 tasks:

• Task 3 – 1. Identify gaps and improvement opportunities.
• Task 3 – 2. Develop initiatives and business cases.
• Task 3 – 3. Develop a roadmap.

TASK 1-1. ASSESS CURRENT STATE OPERATING MODEL

This task is to understand how the organization operates to run its digital business. The result of the assessment of the current operating model state is to be used to evaluate the maturity levels of the digital capability.

Key inputs include:

• The Digital Capability Model customized for the organization.
• Digital capability diagnostic tool, e.g. MS Excel – based template to organize all key information received.
• Documents on the digital operating model, e.g. digital process models, organizational structure diagram, digital role description or job manual, digital application portfolio and infrastructure inventory. Interview questionnaire.

Key Outputs:

• Findings from the document review, system review and interviews should be summarized and organized into relevant digital capabilities.
• Interview questionnaire answered.
• Digital capability diagnostic tool with current state information.
• Current state assessment summary.

TASK 1-2. DEFINE MATURITY LEVEL OF CURRENT DIGITAL CAPABILITY

The purpose of this task is to translate the findings from the assessment of the current state operating model into maturity levels of the digital capabilities.

Key Inputs:

• Interview questionnaire answered.
• Digital capability diagnostic tool with current state information.
• Current state assessment summary.

Key Outputs:

• Digital capability diagnostic tool with current state maturity levels.
• Current state assessment report.

TASK 2-1. SET MATURITY LEVEL OF FUTURE DIGITAL CAPABILITY

The objective of this task is to set target state maturity levels of digital capabilities in order to provide specific directions for the future operating model of the digital business.

Key Inputs:

Corporate and business unit strategy, and goal of digital business.

Digital capability diagnostic tool.

Key Outputs:

• Implication of business strategy and digital business goal on digital capability.
• Digital capability benchmark result.
• Digital capability diagnostic tool with future state maturity-levels assigned.

TASK 2-2. DESIGN FUTURE STATE OPERATING MODEL

The purpose of this task is to translate the future maturity levels of digital capabilities into a future state operating model.

Key Inputs:

Digital capability diagnostic tool with future state maturity-levels assigned.

Key Outputs:

Future operating model per digital capability.

Integrated future operating model across all digital capabilities.

TASK 3-1. IDENTIFY GAP AND IMPROVEMENT OPPORTUNITY

During this task, critical gaps between the current state and the future state of the digital capabilities are assessed, and solutions to bridge the gaps are identified and organized into opportunities to improve the digital capabilities. The future state operating model is ‘what’ needs to be achieved, while the opportunities are ‘how’ the future state operating model is achieved.

Key Inputs:

• Current state maturity levels of digital capabilities.
• Current state operating models of digital capabilities.
• Future state maturity levels of digital capabilities.
• Future state operating models of digital capabilities.

Key Outputs:

• Gap list.
• Improvement opportunity list.

TASK 3-2. CREATE DIGITAL INITIATIVE & BUSINESS CASE

The purpose of this task is to aggregate the improvement opportunities identified in the previous step logically into digital initiatives.

Key Inputs:

• Opportunity list.

Key Outputs:

• Overarching digital objectives.
• Digital initiative list.
• Business cases.

TASK 3-3. DEVELOP ROADMAP

This task defines a road map that will be used to reach the future state operating model and maturity levels of the digital capabilities. A road map may also include quick-wins. A quick-win is a solution that can be implemented easily with little effort.

Key Inputs:

• Digital initiative list.
• Business cases.

Key Outputs:

• Digital initiative profile.
• Road map.