Divisions Between IT and Business Could Impact Customer Experience, Says Pega Research

Organizations must tear down the walls between IT and the business and make more customer-centric investments if they are to improve customer experience (CX), according to new research from Pegasystems, the software company empowering digital transformation at the world’s leading enterprises.

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Pega’s 2020 Global Customer Experience Study was conducted among decision makers spanning 12 countries and seven different industries by research firm Savanta.

The study highlighted four key pain points businesses must address if they are to provide a better, more personalized customer experience, successfully differentiate themselves from the competition, and improve customer satisfaction and loyalty:

Walls between IT and the business are causing CX confusion: The research revealed that IT is twice as likely to lead CX business initiatives than any other group. Twenty-six percent of CX projects are currently led by IT, 13% by dedicated CX functions, 12% by general management, 11% by marketing, and just 7% by retention and loyalty specialists. While IT is critical to supporting these projects, problems can arise when they are forced to make business decisions that require those in other departments – many of whom are measured by a different set of metrics – to buy in and adopt a new approach, or a new technology solution. It’s a key reason why 81% of respondents cited ‘people issues’, including a lack of skills, sponsorship, adoption, and org structure among their top four CX challenges.

Where are all the C-level sponsors? Only 35% of businesses have a C-level sponsor for CX initiatives, and in 36% of companies these projects are led at director level or below. This can result in a lack of expertise, leadership, and awareness in the initiatives themselves and can also cause those working on them to question the organization’s commitment to CX. By contrast, the involvement of C-level sponsors can in itself break down the walls between IT and the business and accelerate change.

Lack of investment in the most relevant channels: Sixty-eight percent of companies say their channel focus is determined by the needs of their customers, but their actions say otherwise. Respondents named email (43%) and digital ads (42%) as their top two channel investments for next year – both of which are considered to be channels with increasingly lower customer response rates. By contrast, only 28% said they were planning to invest in chatbots, and 26% planned to invest in inbound contact centers, suggesting a focus on prioritizing short-term outbound gains instead of focusing on the inbound channels customer most typically want to use to communicate.

Reliance on outdated analytics: While analytics software evolves at lightning speed, the study found too many outdated and less effective analytics solutions still in use. For example, one quarter or more still rely on customer journey mapping (27%) or micro-segmentation (25%), while nearly one in five (19%) still perform arduous A/B testing. Even more telling is that use of customer-centric analytics that can really jumpstart CX, such as propensity modeling (37%), customer lifetime value projection (34%), or performance simulation (33%), are still far from prevalent.
Quotes & Commentary:

“This study demonstrates that while many organizations see the value of improving customer engagement, many still need to understand they can’t just implement a new technology and expect it to be a panacea for all their problems,” said Tom Libretto, chief marketing officer, Pegasystems. “Instead, a more holistic, strategic approach is required. Organizations need to look at their customers in a completely new way – as individuals that have unique needs and preferences within a very complex, real-time relationship with every brand they interact with. They have to earn the right to that relationship every single day, which requires change at the very top of the business, driven by empowered C-level leaders who are willing to re-architect their core business around the customer.”

Read ‘Pega’s 2020 Global Customer Experience Study’ report here:

www.pega.com/organizations-are-falling-behind-cx

Pega surveyed business decision makers in 12 countries and across seven industries to get their view on the state of customer experience today. The results were gathered from 5,000 respondents from the United States, Canada, United Kingdom, France, Germany, the Netherlands, Japan, India, China, Singapore, Hong Kong, and Australia. Respondents came from the insurance, healthcare, financial services, communications, automotive, utilities, and aviation industries.

About Pegasystems

Pega (NASDAQ: PEGA) is the leader in cloud software for customer engagement and operational excellence. Every day, Pega powers millions of automated processes, billions of customer interactions, and trillions of dollars of business by helping people open bank accounts, change phone plans, get healthcare, manage insurance claims, apply for permits, and more. The world’s most recognized and successful brands rely on Pega’s AI-powered software to optimize every customer interaction on any channel while ensuring their brand promises are kept. Pega’s low-code application development platform allows enterprises to quickly build and evolve apps to meet their customer and employee needs and drive digital transformation on a global scale. For more than 35 years, Pega has enabled higher customer satisfaction, lower costs, and increased customer lifetime value.

For more information, visit www.pega.com