In our digital age, all companies must change how they think, how they interact with customers, partners, and suppliers, and how the business works inside. Customers, partners and suppliers expectations have changed, and a gap is opening between what they expect from their interaction with companies and what those companies are currently able to deliver. Companies must immediately work to close this expectation gap, or the entire business is at risk.
There are groups of digital natives out there that are extremely capable, have greater access to capital than ever before, and are very likely to re-imagine the business or an entire industry from the ground up if we don’t start making the necessary changes to eliminate the opportunity.
If they attack, they will do it with a collection of digital strategies that utilise the power of the digital mindset to more efficiently and effectively utilise the available people, tools, and technology, and to design better, more seamlessly interconnected, and automated processes that can operate with only occasional human intervention.
To stay ahead of the competition, a business should start thinking like a technology company to avoid being left behind. Part of that thinking is to fundamentally re-imagine how you structure and operate your business. We must all look at our businesses and our industries in the same way that a digital native company will if it seeks to target our market share.
To make this process easier, we can ask ourselves these four questions:
- If I were to build this business today, given everything that I know about the industry and its customers and all of the advances in people, process, technology and tools, how would I design it?
- From the customers’ perspective, where does the value come from?
- What structure and systems would deliver the maximum value with the minimum waste?
- What are the barriers to adoption and the obstacles to delight for my product(s) and/or service(s) and how will my design help potential customers overcome them?
Digital strategy vs. digital transformation
Once we’ve answered these questions, we should focus on how much appetite for going digital companies actually have!
This is where the question of digital strategy versus digital transformation comes in. The two terms are often misused, in part by being used interchangeably when they are in fact two very different things.
The scope of a digital strategy can be quite narrow, such as using digital channels to market to consumers in a B2C company; or broader, such as re-imagining how marketing could be made more efficient through the use of digital tools like CRM, marketing automation, social media monitoring, etc. and hopefully become more effective at the same time.
Meanwhile, digital transformation is an intensive process that begins by effectively building an entirely new organisation from scratch, utilizing all the latest digital technologies (artificial intelligence, predictive analytics, BPM, crowd computing, etc.), the latest tools (robotics, sensors, etc.) and the latest best practices in the process (continuous improvement, business architecture, lean startup, etc.)
All of this ends of course with a plan for making the transformation from the old way of running the business to the new way. Because if you don’t re-invent your company now and set yourself up with a new set of capabilities that enable you to continuously reinvent yourself as a company, then some venture capitalist is going to see an opportunity, find the right team of digital natives, and give them the necessary funding to enter your market and reinvent your entire industry for you.
It’s all about the interfaces
One way technology companies differ from non-technology companies is that tech companies naturally focus on interfaces, because that is where complex systems often fail. So if a company is pursuing a digital strategy on its way to a digital transformation, it must first pick an interface and then optimise the experience at that interface. It could be the interface between the company and customers; it could be the company-to-employee or employee-to-employee interface; or even the company-to-partner or company-to-supplier interface. Whatever interface is chosen, the goal is to ultimately look at that interface with a fresh modern lens and then utilise all of the latest (and emerging) approaches from a people, process, and technology perspective to create a more efficient, effective, and better experience.
The better job a company does as an organisation at removing friction at the interfaces, the more likely it is to become a partner, supplier, employer or a brand of choice. The value of becoming any or all of these could be the difference between the survival and growth of the organisation and a slow death at the hands of a new digital entrant or a digitising incumbent that completes a digital transformation before your leadership team can even agree that it’s necessary.
How’s your company facing the digital transformation? Leave us a comment in the section below!