Have you seen the picture below going around LinkedIn in the last week or two? It made me chuckle at first, but this morning, when it showed up in my mailbox from the marketoonist guys, I reacted differently.

From my perspective, this couldn’t be less representative of what’s really happening inside businesses today (and I’m not just talking about organizations that are considered progressive or technologically advanced). Traditional brands have awakened and are in the midst of a digital transformation. This shift is happening because everything is becoming customer-centric. Mediocrity and bureaucracy are making room for efficient, creative engagement for consumers.

Chart-1

Software is Eating the World

The real driver here is that brands have figured out that digital experiences are the way to directly engage and maintain relationships with customers. Or putting it as Andreesen Horowitz does, “Software is eating the world.”

Business models as well as customer experiences are being rewritten by software. Take the introduction of mobile check deposit first introduced by USA in 2011. Now widely adopted, this one capability has removed one of the major reasons for visiting branch locations. How does retail banking evolve in the long term? Retailer Amazon’s new Fire phone takes the concept of show-rooming to a whole new level – I call it life-rooming. The Fire phone’s Firefly capability let’s you snap a picture of any product you see in the real world and it will find it on Amazon for you to purchase. Taco Bell just introduced a new mobile app that introduces multiple features to bring a completely new experience to customers. It combines mobile ordering and payment with location-based order preparation so your food is fresh and hot.

The Age of the Customer

In today’s age of the customer, winning the game of customer experience is on the C-level agenda. Understanding users and identifying how to add value at every stage of their journey, is the path to sustainable competitive advantage. Investors, not blind to this, are also rewarding organizations that are customer experience leaders. Forrester’s customer experience index (CXi) reports market returns from 2007-2012 for leaders of 43% vs. -33% for laggards.

Another artifact of the rise of customer experience in the Enterprise are the emergence of in-house design and UX teams as evidenced by the recent acquisition of design and UX firms Adaptive Path by Capital One and Mark Boulton Designs by Monotype Imaging , both customers of the respective firms.

The Application Economy Impact on the CIO

The application economy started in 2007 with the introduction of the iPhone and user friendly, intimate even touch screen personal computing devices. CIOs need to transform their organizations to ensure technology investment is effective and has a directly measurable and positive business outcome. With CMOs increasingly taking on P&L responsibility they desperately need to partner with the CIO who controls most of the development and technology stack for delivering customer experience.

So in essence, the picture of marketing functionality in organizations looks more like this today.

CustomerExperience