Forrester predicts 2019 is the year digital transformation is put into action
According to a report by the independent research firm Forrester, 2019 will be the year that digital transformation aspirations translate into “pragmatic” actions.
January is the time of the year when analysts and experts make predictions about the coming trends that will have the most impact over the next 12 months. Forrester has just published its unique perspective regarding what we can expect from 2019 in terms of digital transformation. After reviewing last year’s landscape, the overarching conclusion is that 2019 will be a year of “pragmatism”.
Reflections on the past year
Forrester claims that over the course of 2018 it was able to validate that business leaders fully understand the "scope and magnitude" of the challenges they face. As a result, in order to respond to the external demands of 2018 and to adapt to the rate of change – “the hyper pace of digital” as the consulting firm calls it – companies were able to "dream big." Their aspirations: to take advantage of new digital technologies to drive efficiency, enter new markets, and create new revenue streams.
In some cases, however, these dreams ran counter to the reality that a true commitment to large-scale strategies such as digital transformation and user experience requires. Such initiatives demand significant effort, and even more importantly, “challenge the way leaders run their businesses.” This is why, although many companies successfully achieved their objectives, many others failed to bring about the behavioral changes their strategies needed. In fact, Forrester maintains that the output of user experience strategies remained flat, and more than 50 percent of digital transformation endeavors floundered in 2018.
What was behind this floundering? Forrester indicates that many businesses were simply not prepared, some due to poor data management, and others because they simply "underestimated" the work required to address their technological deficiencies. Other reasons Forrester cites for companies failing to harness the potential of digital transformation include focusing exclusively on back-office technologies, a lack of executive buy-in for the strategy, and wariness about introducing change that could jeopardize quarterly results.
What to expect in 2019
Looking forward, Forrester believes that 2019 will be the year that transformation “goes pragmatic". A pragmatic approach will allow companies to address "fundamental challenges” such as technical debt, data governance, and aging brands. If business leaders can overcome these obstacles this year, they will be able to create a "more durable and powerful foundation" to succeed in the digital context.
According to Forrester, a year of pragmatism can create positive momentum, especially if the outcome is a decisive, goal-oriented, far-ranging strategy for 2020.
The identified trends
To help business leaders identify concrete areas of focus to successfully fulfill this pragmatic vision, Forrester outlines what it believes to be the fourteen key trends that can make or break a company’s strategy in 2019. Below are the most notable:
Customer experience continues to be a challenge
Forrester reports that 20 percent of brands will abandon their customer experience initiatives in 2019, and will opt for more traditional strategies, like price reductions, in order to achieve short-term objectives.
2018’s poor results in this area and turning to traditional approaches are, according to Forrester, due to the fact that many companies have chosen models that steer clear of true disruptive change, consequently, they fail to impress the customer. It is Forrester’s opinion that “championing and leading disruption in the existing operations” is the only way to achieve real gains in customer experience.
In 2018, for the second consecutive year Forrester singled out BBVA Spain’s mobile banking app as the best in the world. In its assessment, Forrester declared that BBVA’s application stands out for a “superb balance” between a wide range of “useful functionality” and excellent user experience. "BBVA customers can complete a wide range of tasks through the app, which also offers a range of next-generation features such as BBVA Valora,” the report pointed out.
Digital strategies pursue tangible results
Forrester predicts that 25 percent of businesses will “decelerate” their digital efforts in 2019. This is due to the fact that in 2018 many companies defined digital strategies that were not based on the "disruptive operational change" required to see digital ambitions become a reality accompanied by tangible results.
In the new year, some companies will shift to a more "pragmatic" approach with the aim of making "incremental and necessary changes to operations." There will also be “tangible efforts” such as moving customers to digital channels and launching new digital products. According to Forrester, if this is “done well” this approach would allow innovation to focus on the “most promising and pressing” areas.
Only 15 percent of businesses will succeed in executing a “client-driven” model based on agile delivery methods and “backed with modern architecture and development,” the research firm states.
In 2018 BBVA reached an important digital milestone: 50 percent of its customer base uses its digital channels. Furthermore, its commitment to agile methodologies and the reuse of technological components helped the Group fulfill its strategy of launching digital products worldwide.
Purpose regains meaning
According to Forrester, in 2019 purpose will regain its purpose as a strategic priority for “pragmatic reasons” such as standing out in a digital ecosystem where “industry lines are blurring” and to win over their employees.
BBVA's purpose ”to bring the age of opportunity to everyone” is more relevant than ever thanks to the digital transformation and organizational changes, which had significant impacts throughout 2018. In fact, BBVA is the first bank to embrace global product development as a way to ensure that it lives up to its purpose on a global level. By doing so, BBVA is able to provide its customers with the best banking solutions and the best data-driven advice about alternatives, anytime and anywhere.
Artificial intelligence builds a foundation
In its 2019 predictions, Forrester asserts that this is the year artificial intelligence and software RPA (Robotic Process Automation) "will join forces to create digital workers” – in other words, to automate processes – in more than 40 percent of companies.
The research firm believes that these technologies are a "change agent" to future operations. In 2018, its adoption was hindered by several factors: a lack of information architecture to make the most of AI’s potential; the lack of an overarching approach, where AI was mainly implemented “horizontally”; and business leaders’ inability to understand the true promise of AI for improving customer experience.
Forrester believes, however, that these obstacles will fall by the wayside in 2019, and businesses will be able to implement strategies that will turn AI’s potential into a reality. Specifically, the research firm says that businesses will expand the scope of their RPA pilots and proof-of-concepts to reach a wider range of products, processes, and experiences and thus achieve a "better understanding of AI's potential impact.”
Forrester's other 2019 predictions touch on areas such as cybersecurity, the employee experience (EX), and the automation of more business processes, such as talent management.
2018 was a year of achievements for BBVA. Its commitment to digital transformation proved itself by transcending “vision” and yielding tangible results with the execution of such projects as the global development platform and the deployment of global products. The transformation also had an organizational aspect in 2018, which came about thanks to the bank’s widespread adoption of agile methodologies. The cultural and technological change has allowed BBVA to continue moving from a closed model to an open one, breaking down departmental silos. Collaboration with the fintech ecosystem, a leading element in the financial system’s transformation, has also become an essential part of the Group’s transformation strategy.