With most companies struggling to find ways to pursue any meaningful digital innovation, R/GA’s Anthony Baker argues that the way forward is to go lean, with a modular approach to technology and innovation.
There’re probably very few people with an Internet connection that hasn’t come across the term “digital disruption”. A catch-all phrase full of buzz that's likely being mentioned at every business meeting by every tech, consultancy and advertising company on the planet. It is no surprise of course. We are indeed in a “US$2 trillion Digital Transformation Race”, a hefty incentive for everyone to look for a piece of the tasty pie.
However, what’s outstanding is that it’s a race with an alarming failure rate, where half of enterprises are not successful running a digital transformation program and more than 70% of companies claim to face roadblocks to innovation. Furthermore in 2018, IBM claimed that digital transformation projects take four years on average and 85% of them end in failure.
With the emergence of COVID-19, McKinsey reports claimed that the pandemic has “vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks”. Despite wiping out US$500bn from worldwide digital transformation spending, it has created pockets of innovation opportunities in most industries, from finance and education, to telecommunications, health and new platform business models, social commerce being one of the latest digital innovation trends.
Yet, we have observed that those who are locked in with traditional enterprise techs are struggling. Large CRM, content management, marketing and commerce solutions are not providing the flexibility that companies need to move quickly and tap into emerging opportunities. Because of their monolithic architecture, it’s much slower and costlier to make changes and react to the customer’s changing needs, hampering businesses in adapting to new behaviours, not being able to adapt quickly enough as compared to those with a nimbler and more modular tech approach.
Most incumbent enterprise platforms are offering no alternatives to these proprietary and slow-to-implement solutions and have a hefty price tag ranging from US$2m to mind-boggling $US30m. The enterprise price tags, in addition to an average time-to-market that rarely goes below 12 months, leaves companies struggling to close the gap between what consumers expect from their products and services, and what they can realistically offer.
In my 20 years’ career in digital technologies, I can see that now more than ever it’s clear that most companies are struggling to find ways to pursue any meaningful digital innovation, leaving them to face imminent disruption.
It’s precisely because of this situation that I’ve been working for more than two years on an approach I’ve called Lean Experience Innovation Stacks, an alternative for companies that need a different approach to digital experience innovation.
A framework for lean innovation
The Lean Experience Innovation concept is based on the fundamentals of modular, headless technologies, but instead of focusing purely on a technology architecture approach, it is intended to be a framework for creating technology stacks that support lean experience innovation.
What I mean by that is that the focus is to enable digital experiences to be delivered quickly, reacting faster to consumer needs and market opportunities, while enabling continuous improvement and innovation. The approach is based on small core teams, cutting out the clutter and any tech or services that a company or client doesn’t need, and building digital platforms in such a way that enables connectivity and change, with the ultimate goal of creating better services, products and stories for people to enjoy, and more importantly, get more value from.
Headless platforms are becoming ubiquitous, and they are a key element of the lean innovation approach. From content management platforms to customer management and data orchestration solutions, new tech players have understood that the key for flexibility and rapid and continuous innovation is based on the ability to cut down dependencies and play along with other platforms through secure, but flexible APIs allowing seamless integration.
By separating presentation technologies (user interfaces on the web, apps or devices), from micro-services, business logic and data, these solutions are better at fewer things, becoming easier to integrate with other technologies and layers of the digital ecosystem, often using standard and non-proprietary technologies that don’t require specialised teams (which often come with hefty training and certification fees).
This lean approach is focused on finding key integration points while creating ecosystems where different blocks are as independent as possible, yet modular and reusable across different touch-points and services. The main goal being that making changes on such modules should not have a big impact in the rest of the ecosystem, allowing for a faster and more flexible opportunity to react to consumer behaviour changes, industry trends and competition moves.
I strongly believe that Lean Tech stacks and APIs are here to stay. API-driven, headless modular services, cloud-based ecosystems hold the key for better and faster digital innovation for many companies, especially the ones that can’t afford to waste millions of dollars on proprietary technology training and long-term software contracts and licensing.
Headless is spreading across all types of solutions: from headless content management, headless customer relationship management, headless e-commerce, headless customer service. This in turn enables user interfaces to keep evolving and new channels to keep expanding (chat, voice, telepresence, gesture-based, emotional-powered interfaces).
The key development in modern stacks is the modularisation of specialised core business needs, and the standardization of headless technologies paired with the expansion and accessibility of cloud services. Now, the challenge ahead is that this architecture approach goes against the “suite” approach adopted by big enterprise software solutions, as it is nimbler and thrives by integrating with multiple systems.
Putting lean experience into practice
The Lean Experience Stack offers an alternative to the traditional big bang approach and the slow adoption process that incumbent enterprise solutions require. It enables us to design purposeful experiences for customers. Starting from the underlying tech architecture and the processes, we enable lean, real-world, testable iterations at a faster pace. Our approach enables us to help businesses get to market twice as fast with half the effort. This allows businesses to then shift their focus on creating a bigger impact in customer’s satisfaction while generating up to 60% of cost reduction and savings over a three-year period.
One such example is Merch Aid, an e-commerce initiative to connect designers and illustrators with small businesses to create and sell merchandise with 100% of the proceeds going back to the business. We created the whole experience in two weeks, and it was powered by a responsive platform which includes seamless content management, brand design and e-commerce capabilities, with more than US$150,000 raised up to date, helping more than 25 businesses in New York, Los Angeles and Austin.
In response to the Covid-19 pandemic, we created a community platform in Singapore called ‘I Go For You’ for volunteers to help the elderly get their groceries, so the vulnerable population can stay safe at home. In less than 10 days from idea to launch, we leveraged messaging and mobile services that overcome language barriers and created a tangible impact for a community in times of need.
The key to our lean experience approach is that we adopt a modular principle, which in turn leads to digital experience innovation. Instead of a monolithic “full-suite” approach, we craft bespoke solutions that piece together best-in-class services in the most flexible and efficient way. We then design the experiences to fully maximise these services in different layers and in different combinations, allowing for continuous innovation.
Think about it as Lego pieces. We can put together a simple model with a few pieces and make it work without big efforts or committing to a huge investment. Because of its modular nature, we can design a truly bespoke and effective experience by adding, replacing or removing pieces without affecting the whole model.
As we continue to face disruption, adopting a lean innovation methodology for your business will allow for constant iteration to deliver continuous, meaningful value to customers and ultimately, return value back to your business.