Digital Thinking – the ability to disrupt markets using cloud-enabled big data and analytics capabilities – can positively transform how an organisation differentiates itself from competitors and optimise costs.
So how can an organisation maximise the benefits of Digital Thinking? Here are some ideas…
The Mirror Technique
A digital disruptor turns a sector on its head by making it a lot harder for incumbent players to strategically identify, assess and respond to the threats they pose. For example, Uber, Airbnb and TaskRabbit don’t buy or supply the services in the sectors they compete in – they are not direct competitors in a traditional sense. Rather they are convenient intermediaries that offer both customers and suppliers faster, smarter ways to transact with each other using their own monetised cloud services.
Arguably for many organisations (large and small) Digital Thinking like these outlier disruptors can be challenging, particularly where barriers of entry to their sector are considered to be high. To help validate any threats or opportunities from such market innovation, an organisation can apply “The Mirror Technique” – no matter how impossible or unfeasible it looks, what would be the exact reverse of its current approach to market or operating model? What would be the impact on the organisation and its customers if a direct competitor or new entrant implemented this approach first? And critically, how fast could available cloud capabilities realise these potential disruptive forms of competitive advantage?
This application of scenario analysis can help an organisation identify and assess the risks and opportunities it faces from previously unforeseen cloud-powered Digital Thinking – could it be standing on a burning platform or an untapped goldmine?
Big Data Learning
Gathering large volumes of unique data about customers and operating model performance is emerging as a key source of competitive advantage for many organisations. For example, UK high street retailers are capturing data about customer buying behaviours across their physical/in-store and online channels to better personalise their offerings against the experience delivered by Digital Disruptors like Amazon.
A key challenge is learning how to yield these disjointed, complex data sets into something coherent that delivers effective moments of delight for an individual customer using an efficient value chain. Furthermore, by an organisation treating its big data capability as a barrier of entry for competitors, there is a risk of delaying the time to market of any resulting initiatives because it’s having to learn by itself, in isolation, how best to use this form of Digital Thinking.
One way to potentially accelerate and de-risk this learning process is to for an organisation to collaborate with its partners or suppliers in the gathering and application of big data using a cloud platform. In addition, it may even want to consider coopetition with its competitors where participants share their experiences and capabilities together for mutual benefit – “Big Data Learning” enables greater competitive advantage for all the more its shared.
The face to face test
Digital disruptors exploit analytics to inform the design of new forms of personalised engagement including customer centricity, social media and media content. Combined with their ability to offer competing services with lower (or even zero) switching costs for customers; such Digital Thinking risks rendering an organisation’s established market offerings obsolete.
Another outlier disruptor vividly illustrates the competitive advantage of such a move – FaceBook’s $16 billion acquisition of cross-platform mobile messaging service WhatsApp. Not only has WhatsApp decimated Telcos’ revenues from text messaging services, these incumbent players will have no direct access to this huge Social Media channel (estimated 900 million global user base) and the customer insights it generates – Facebook is using Digital Thinking to create an unbeatable barrier of entry as well using this unique analytical capability as a platform for future growth.
However, unlike many traditional organisations, disruptors arguably have no experience of physically serving customers directly to inform these capabilities. This weakness can be exploited by using “The Face To Face Test”, where an organisation applies its own tacit, historic experience of customer engagement to develop a new disruptive market approach using analytics. This test asks questions about how one of their own real life customers would react if a digital service was delivered to them physically by an employee. Example questions include: what information should your employee intuitively, instinctively know about this individual customer before they start serving them? What things shouldn’t they know or ask about? How can your employee genuinely surprise and delight this long standing customer every time?
By applying analytics as a representation of a physical employee drawing from real world experience, an organisation can arguably personalise their customer engagement approach in ways beyond the reach of digital disruptors.
If you would like more information about how cloud-enabled big data and analytics can benefit your organisation please contact the Sopra Steria Digital Practice.