Using Digital Transformation to Turn CX into Competitive Advantage

Harnessing technology to drive CX improvements

According to ContactBabel, over half of companies say customer experience is the most important factor when it comes to out-competing rivals, reinforcing the importance of a clear customer experience strategy. Given its importance to organizational success, how can businesses transform their operations to meet customer needs, while increasing efficiency? Based on the latest ContactBabel UK Customer Experience Decision-Makers’ Guide, sponsored by Enghouse Interactive, this article highlights where technology and digital transformation benefit customers and the business.

Why CX is central to business success

Senior leaders overwhelmingly understand the importance of CX to business strategy. 83% of respondents in the ContactBabel UK Customer Experience Decision-Makers’ Guide see it as key to differentiating their business from competitors, ahead of product quality or price. The Guide, sponsored by Enghouse Interactive, creates particular value by interviewing both CX leaders and consumers to get their perspectives on the current state of customer experience strategy and operations, and how those strategies and operations can be advanced.

Improving CX has positive impacts on both customer satisfaction and efficiency. While 62% of businesses rank increasing customer retention as a top 2 reason for CX improvement, a similar number (64%) rate lowering costs as their key goal. Backing this up, 57% see reducing headcount as an important part of AI deployments. Clearly, programs need to balance a better experience that delivers on customer retention strategies with higher productivity in the contact centre.

The importance of digital transformation

Technology and customer experience are closely linked. IT is the main lever for CX transformation, attracting nearly half (45%) of investment, ahead of improving business processes (25%) and training (17%). Yet, despite this level of investment, the vast majority of CX leaders are not happy with the results:

• 85% say their legacy technology is a major or minor problem, impacting their operations
• 40% say their current CX technology is either poor or average

Partially, this disappointment is down to a mismatch between customer needs and where money is being spent. Nearly two-thirds (64%) of customer interactions are still via the telephone channel, a figure that has been broadly static for the last few years. This rises to 78% in the housing sector, where organisations have to deal with more complex interactions that require personalised, empathetic responses. Yet, while the telephone is the busiest contact channel, only 33% of budgets are spent on it – ignoring the latest innovations that can improve its experience and efficiency, such as AI-powered agent support.

How can organisations turn CX into competitive advantage and meet their objectives?

Analysing the ContactBabel Guide, there’s clearly a need to better target CX technology investment if organisations are to meet their strategic objectives of delivering better service, more efficiently. Based on the best practises outlined in the report, and our own 40+ years of experience working closely with CX leaders, digital transformation for customer experience means focusing on four areas:

1. Look at cloud options for flexibility and innovation

Many legacy systems remain on premises, and some find this limits their ability to support a changing business. One option is to move to a CCaaS platform but, increasingly, a hybrid model is becoming a more attractive proposition to many organisations with the option to supplement their core CX platform with cloud-hosted add-ons. Consuming cloud-based SaaS solutions can deliver a wide range of benefits:

• It increases efficiency as organisations only pay for usage, rather than fixed costs
• It reduces the time to onboard new technology or channels
• It removes the overhead of supporting internal IT solutions and hardware
• It adds flexibility, with the ability to scale usage up or down, as well as enabling hybrid and remote working
• A full Contact Centre as a Service Solution makes it easy to add new channels, as and when required
• It future-proofs infrastructure, providing access to innovative new solutions such as AI

Essentially, the cloud can make it simpler to build and manage a customer-centric digital experience platform, with the benefits that this brings, now and in the future.

Depending on factors such as their size, maturity and sector, organisations will vary in which solutions they want to move to the cloud, the speed of change, and the type of cloud (public, private, hybrid) that best fits their needs. Also, moving to a cloud deployment doesn’t need to be a major uplift; it can be incremental to match specific requirements and timelines. Working with an experienced partner that understands the options is vital to make the cloud work for you.

2. Look to improve the voice channel

Given the long history of the voice channel, most organisations have contact centre telephone systems in place. However, technology is not standing still, and there are a growing number of ways to improve the voice channel for agents, customers and the business. Systems such as conversational AI automation, AI-driven knowledge bases, unified desktops, single customer view and other in-call support all empower agents. This enables them to operate more effectively and deliver a better CX to callers. Experience bears this out: 86% of those that used AI agent assistance said it had a strongly/somewhat positive impact on the customer experience, with a similar number (85%) saying deploying a unified agent desktop delivered similar benefits. AI solutions to support First Contact Resolution (FCR) help meet the customer goal of getting fast, reliable answers without needing to make contact again.

Technology, especially AI, also increases efficiency. Processes such as post-call wrap-ups, which were once manual, can now be automated. AI summarizes the conversations, saving time while delivering consistency. More and more complex queries can be answered through online or conversational voice self-service, connecting customers with information more quickly, automating simpler, or lower value, transactions, while freeing up agents to handle calls where humans add more value.

3. Offer channel choice

While the majority of interactions are through voice, other channels are better suited to particular demographics or type of query. Essentially, customers want their interactions resolved quickly, first time, without having to wait in a queue. Companies must provide the right mix of channels to achieve this as part of a broader customer experience strategy. Demonstrating the importance of channel choice, for example, 87% of respondents said live web chat delivered benefits to customers, based on its combination of direct access to agents and online convenience.

The reason for making contact also steers channel choice – and the resources that organisations need to have in place. The ContactBabel report includes valuable guidelines that help CX leaders match best-fit channel options with customers’ reasons for getting in touch. It suggests the channels that customers look for, based on the emotional importance, urgency, or complexity of their need.

Below is an excerpt from the table.

Reasons for channel choice (excerpt)

© ContactBabel

Alongside a selection of broad reasons, different demographic groups have their own preferences, depending on the scenario. For example, younger generations prefer to email in a high emotion scenario, while those over 65 will pick up the phone. Based on consumer research, the report highlights these differences, and what they mean to channel resourcing.

4. Analyse and continually improve performance

Delivering CX is a continuous process. New customer needs, competitor activity and a changing business landscape all mean that today’s superior CX becomes the bare minimum tomorrow.

Understanding where to improve requires deep analysis of interactions and activities, using customer journey analytics. While just under half (49%) of respondents to the ContactBabel survey use interaction analytics, those that do see an impressively wide range of business benefits including:

• Agent improvement and increased quality of service
• Business process optimisation
• Avoidance of litigation and fines
• Customer satisfaction and CX improvements with greater customer loyalty
• Increases in revenue and profitability
• Improvements in contact centre operational performance
• Cost reduction

Deploying interaction analytics is the cornerstone of continual CX improvement, meaning that those organisations that have yet to embrace interaction analytics risk missing out. In the report, over 70% of respondents using the technology found it very/somewhat useful in assisting with customer journey analytics, identifying business process failures, identifying opportunities for self-service, identifying dissatisfied customers or checking the quality of customer interactions.

Transforming your CX in 2026

Organisations across every sector see CX as central to customer retention and greater efficiency. As the 2026 ContactBabel UK Customer Experience Decision-Makers’ Guide demonstrates, technology, especially digital transformation of customer experience, is at the heart of achieving these twin objectives.

Download the comprehensive guide today to learn how digital transformation is driving customer experience and how to upgrade your CX in 2026.

Download Guide Now

Further Reading

• eGuide: A Practical Guide to Applying AI in Customer Service
• Case Study: Enghouse AI Housing Association Case Study
• Blog: Business Failures bring CX Consequences: Reducing Failure Demand with Quality Monitoring and AI Insights

About the Author

Simon Adnett VP of Sales UK&I/MEA Enghouse Interactive
LinkedIn

Simon leads go-to-market and customer engagement strategies for contact centre solutions across UK and Ireland. A seasoned CX advocate with a strong technology background, Simon regularly advises IT and CX leaders on their CX strategy, sharing insights on AI, automation, and customer experience transformation across industry platforms.