CIAM: The Future of the (Digital) Enterprise

  • By Sagara Gunathunga
  • 19 Jun, 2018

A few months back, I came across the following diagram in the World Economic Forum's Twitter feed. I thought this was one of the best visual representations on the strength and size of the economy around the internet.

This is the first article in a series which discusses the rise of the digital economy, how it has become an integral part of a business’s survival today, and how Customer Identity and Access Management (CIAM) is the ideal solution to tackle challenges encountered by businesses as they implement their digital transformation strategies.

Rise of the Digital Economy

The digital economy did not happen overnight - it started two decades ago in the mid-1990s and evolved to become what it is today. Looking at the internet’s involvement in this story is worth discussing here. The digital economy began with a few web based stores, and at that point in time, its significance was not apparent. Instead, it was considered as a ‘nice to have’ or ‘cool’ feature that businesses could explore. However, nearly a decade ago, the digital economy began to be considered as a differentiator factor. A business which had successful web based delivery and customer care channels was thought to have a competitive advantages over businesses which did not have these channels. This is a significant shift in viewpoints, compared to how the digital economy was viewed when in started in the 1990s. Given these developments, what is the importance of the digital economy today? Consider 3 digital businesses which are considered phenomenal today - Netflix, Amazon, and Uber. It is common knowledge that Netflix began as a DVD rental service in the 1990s, today it is only only a movie streaming channel but it also creates original content. Amazon, which started out as an online bookseller, is now arguably the world’s most popular e-commerce site and also a cloud computing company. Finally Uber - the app which changed the taxi industry and user experience.

During the early stages of the digital economy, we could not have imagined such businesses. Yet, they are now part of our everyday experiences. These 3 businesses have the following common factors which have led to their success:

  1. They are not merely successful businesses, they have revolutionized the industries they operate in. With the growth of Netflix, it’s hard to imagine a bright future for traditional video clubs unless they come up with another innovative idea. Same is true of Amazon. Unless companies that still try to sell server hardware and try to compete with Amazon. By disrupting conventional business operations, these innovations have changed the competitive landscape.
  2. For companies like Netflix, Amazon, and Uber, digital channels have become their main business and not an alternative channel. For example, we don’t spend our time worrying about where Uber’s main office is, as all our interactions are done via a mobile app. Same applies to Amazon. With free delivery guaranteed within 3 days, users are not particularly concerned whether or not they have a stores located nearby. These businesses are primarily designed to target the digital economy and operate on the internet. The flip side of this is, if there is no internet of course, these businesses cease to exist!

Let’s revert to our original question, what is the importance of the digital economy today? It’s no longer a ‘nice to have’ feature or a differentiator. Instead, it’s compulsory for survival, any business which does not initiate digital transformation efforts is not going to survive, whether or not management believes in digital transformation. A simple web search will give you many examples of businesses which ceased to be relevant by ignoring digital transformation.

In the following section, I list out some important factors that need to be considered when defining a digital transformation strategy.

Design Digital Delivery Channels

Traditional delivery channels consist of a few showrooms in multiple locations, sales personnel , and a talented marketing team to support sales. We can easily replace each of the above in the internet. For example, showrooms can be replaced with a simple web based store. Yet, is designing a digital delivery channel limited to a web based store? If you can recall your own experience with Uber or Amazon, you will answer this question as a ‘no’. Instead of merely replacing a physical store, an organization must take into consideration other factors to complete their design of a successful digital delivery channel. These include:

Sales are increasingly based on real-life user comments and ratings

Traditionally marketing leaders bet on marketing strategies such print and electronic media commercials. However, in a digital delivery channel, real-life user comments and ratings are the real boosting factors for sales. When designing a digital delivery channel, it’s important to think about how a user can provide his/her comments and ratings after using the services/goods as well as how new users can view previous user reviews/ ratings to make their decisions regarding a purchase. After implementing these important requirements, a web or mobile based store design and defined user experience flows should be designed, allowing people to provide their comments and ratings. Some businesses facilitate the creation of public wish-lists for goods and services - this is another marketing method for digital delivery channels.

Digital delivery is the main delivery channel

It’s no longer necessary to have impeccably designed showrooms (with high maintenance costs) to build a popular and valuable brand. Instead, a thoughtfully designed web based store can serve the same purpose in a much more cost-effective manner. As I mentioned earlier, who cares about the locations of Amazon showrooms or Uber offices when you can access their products and services from your smartphone?

Consumers look for very efficient consumer channels

Customer care teams or help-desks which operated from 8:00am to 5:00pm have traditionally provided customer service but in today’s world, waiting on the phone until a customer care representative is able to speak to you or waiting in the line leading to the help-desk are neither popular nor convenient. Today’s consumers want contact with businesses in the same manner as they communicate with friends over social channels or instant messaging/VoIP channels. When designing successful digital delivery channels, you need to consider these consumer preferences. For example, what is the best way to integrate social channels with your consumer care offerings.

Personalized User Experience

Another distinguishing feature of successful digital businesses is their ability to individualize user experiences. For example, an online books store can track your favorite authors, suggest new arrivals, other books you may be interested in, and show you the availability of a book you had viewed previously, which was out of stock at that moment, but is now available.

When defining a digital transformation strategy you need to focus more on how you can personalize the user experience. In most cases designers understand the importance of personalization but their designing are not appealing to consumers. An example would be to have a form to gain a better understanding of customers’ favorite authors (which would be time consuming and tedious for consumers), when this could be done by tracking their previous purchases.

Know Your Customer

How can businesses identify their users uniquely?

Let’s take a brief look at some traditional techniques used to identify users:

  1. Provide an online registration form so that before consuming services, end users would complete the form with profile details and select unique usernames and passwords.
  2. These user profiles along with usernames and passwords are stored in a database or similar user store.
  3. Whenever the same user revists the the store, he/she needs to login with the originally registered username and password so that the business can uniquely identify re-visiting users.

These look like a very simple set of techniques at a glance (and they are) and they served well for a decade or so. Yet in today’s wave of digital transformation and rapid rise of digital businesses, these techniques are not scalable and are also inadequate when looking at the entire process of digital transformation. Some of the main drawbacks are discussed here:

  • If you maintain a single web store it make sense to ask consumers to complete registration forms and select usernames and passwords according to your policies. In contrast, from the consumer’s point of view, your businesses is one of the many businesses that ask them to complete registration form. This is known as Registration Fatigue. Consumers are loathe to complete such registration forms over and over again.
  • Each organization has their own policy on usernames and passwords, as a result consumers cannot use same username or password with different organizations. Consumers are then required to remember multiple usernames and passwords, which is inconvenient.

Customer Identity and Access Management

Identity and Access Management (IAM) is a security discipline that enables the right individuals to access the right resources at the right times for the right reasons. IAM is a branch of computer security and has evolved to cover a very broad area. For practical purposes, IAM tools and practices are categorized into several areas - specifically workforce IAM deals with employees’ identities and access to internal systems.

CIAM is a specific area within IAM. A whole range of requirements are addressed by CIAM. For one, it facilitates business organizations to capture and maintain identity and users profile of customers, and control their access to online resources and online service offerings. CIAM also enables businesses to connect with their customers, help provide personalized customer experiences, and help protect consumer data. In the second article of this series, I will explore in-depth how CIAM tools can be used to facilitate each of the above mentioned possibilities. In the second part of this article series, I will delve more into CIAM.

About Author

  • Sagara Gunathunga
  • Director
  • WSO2 Inc