In my past posts "Digital Transformation - The path and its challenges" and "Digital Transformation - The Opening Phase", I shared the challenges faced with when "going digital", and how companies need to reshape their corporate thinking across the organisation. In this post, we will look at practical concepts that can help you with your digital transformation business strategies.
A digital strategy should be central to any business today. Digitalization changes how companies go to market and the process of digitalization involves a re-examination of an organization's business model, from how the model is designed to how the model is delivered, operated and implemented. So let's take a look:
- A change in the competitive landscape - Traditionally competition is a zero-sum game where we are competing with other similar businesses who make the same kind of products using the same kind of business model. Now we are shifting to a world where the line between competition and partners is blurred. Competitors could be different verticals and do not look like a traditional competitor; but they solve the problems for our customers the same way we do, but as part of a solution. Competition is about who can provide the customer the value bringing solutions that are optimized to work with other products, improve the quality of experience, and deliver significant incremental value that satisfies a broader underlying need for their customers.
- Rethink data and its role in the organization. Review and consider how the organization thinks about how the business interacts and uses data to drive change. Look at your business through the lens of data instead of the lens of process. Analyse and understand your data in order to anticipate, predict and comprehend customer habits, preferences and needs. Be prepared to make decisions and process changes dynamically with faster feedback cycles from the customer. In other words, find out what's working and what isn't and adjust appropriately - making your response to customer requirements faster than ever.
Adopting data into the processes requires integration into the software, so the company needs to change how applications are developed and deployed, and allow the enterprise to make the fundamental changes from:
- A static platform-centric view to a customer-centric view
- A traditional service paradigm to a fully programmable automated platform
- An operational model with fragmented responsibility to a new collaborative and synergistic model
- How we think about innovation and manage change within an existing enterprise? The ability to innovate must be enabled by the corporate strategy and the associated processes, resources, organizations and culture. Innovation capability can be built inside any department or any part of the value chain - it is not linked only to invention or R&D, but is clearly linked to new value creation and the capture of value in a new way. As I have posted previously, organizations need to provide employees with the autonomy and resources to experiment with new ideas, empowering collaboration. Company leaders must encourage and support employees, creating business cases using problem solving thinking, make decisions based on data analytics and metrics like risk tolerance or failure tolerance. Finally, give a voice to the workers and enable them to come up with innovative initiatives. But more importantly - make sure their voices are heard and their initiatives are rewarded - even "failed" ones as evidenced by Spotify's [model] Engineering Culture.
- How do we define our value as a business to the market? Companies must start by truly understanding the context in which their product or service is used - Why/Where/How and by Whom? At the core of understanding the user experience are the concepts of empathy and relevance - and the question of how the product or service provides value for the customer. Functional approaches to creating empathy in the business environment include: customer modelling, social media listening, immersive user experience design, and deep analytics. Develop processes or reorient existing core processes and operations to build on the culture of the organization and enable employees to deliver a unique, consistent, and hard-to-replicate user experience.
Unfortunately, there is no magic formula that can take you from the bottom directly to the top of the digital wave. I truly believe that if you can change and think differently, learn to challenge your rule-books - that define how you understand your customers, your competition, your data, innovation and value - you'll have great potential to take your company into the new digital marketplace.