Digital transformation strategy is about enabling enterprise and embracing digital disruptions to evolve new digital business models.
In the digital business ecosystem, there are technovators (technology innovators) who research and innovate disruptive technologies, and there are biznovators (business innovators) who evolve new digital business models. Biznovators leverage technology disruptions such as drone-based delivery or aerial photography and video surveillance, use 3D printers to enable customers to order tailor-made products to their liking or health scientists to print 3D vertebra for corrective spine surgery in humans.
These new digital business models leverage the Nexus of Forces, help enterprises achieve competitive advantage and are recognised as the leaders in technology-led business innovations. For new digital business models to succeed, the DNA of the enterprise needs to change to be able to support the flux of operations triggered by the mix of traditional business models and new digital business models.
Take the case of Amazon and Dominos who might use drones to deliver supplies to customers. While this does not replace the existing delivery model that has been their core business model, the new digital business model opens upa new market segment and an expanded customer base. To achieve the desired business velocity, organisations would have to adopt a bimodal strategy where they continue to support the core business model with existing IT, whilst they evolve lean and agile operations leveraging digital disruptions to enable and support new digital business models.
This bimodal strategy applies to enterprises that want to take on the digital transformation roadmap including the IT service providers who play a major role in helping enterprises with their digital transformation. As IT service providers continue to support enterprises to manage and maintain their existing business models and operations, they will have to develop a parallel IT ecosystem consisting of the young turk technocrats and digital strategists to help customers’ CMOs and CIOs adapt and adopt disruptive technologies to evolve new digital business models leveraging the Nexus of Forces.
The bimodal strategy should only be a tactical approach for the near-term with the long-term objective being convergence of the existing operations and IT with the new lean and agile IT. This will help enterprises to streamline their bottom line with unified operations that are capable of supporting the coexistence of both business models to continuously improve and expand the top line.
To get started, enterprises need to assess where they rank in the digital maturity model and think about their digital business growth.
i) What things CAN’T your customers or employees do on their own mobiles to use or serve your products and services?
ii) Do you have one application that gives your employees all the RIGHT information about the relationship you have with a specific customer or client?
iii) Is there is one area of your business (no matter how small or large) that if improved to WORK SMARTER could deliver big benefits quickly for customers and/or employees?
Answering one or more of these questions can help a client find the critical pain points that could be addressed using new ways of working supported by digital technology – the power of digital transformation!
Let me know your top three…
Responding proactively in an instant to an individual user is arguably at the heart of the digital experience.
But as a result are companies being increasingly tactical in their outlook?
I use different digital banking services from two major high street banks yet their digital channels practically look and feel the same – the difference is the product not the channel.
The other day I was comparing prices for a product across different on-line retailers; if it wasn’t for their different logos the experience was pretty much uniform across all of them. Even the big data(?) driving my personalised experience felt repetitive – probably because they were all using the same personal and social information to engage me.
I expect government information to be available digitally and all in one place – an intuitive experience like on-line retail. As a user I don’t necessarily care about how that information is produced as long as it’s accurate and doesn’t require me to go anywhere else.
To succeed, companies and organisations need to respond quicker, faster and smarter to my needs – a tactical, not a strategic response. And that’s just for one user; is there a risk that chasing competitive advantage by meeting the tactical needs of thousands or millions of users could result in a company not having sufficient resources to adapt strategically when further market disruptions occur? Or alternatively end up being dependant on technology change to innovate, differentiating the user experience rather than the company’s own products and services?
What ways can companies and organisations enjoy the benefits of digital transformation while keeping the right tactical AND strategic focus for their business?
- The old rules still apply: competitive advantage still comes from increasing differentiation and managing cost – give your customers what they want short- and long-term using digital only where it adds value (not the other way round)
- Digital is immature; it needs your guidance: use the same measures and indicators for offline vs digital channels and regularly compare their relative performance to each other (and competitors). This should indicate if your digital strategy implementation is moving in the right long term direction rather than delivering only short term tactical benefits
- Live and breathe Agile – even strategically; it’s not easy to move from Waterfall but the benefits of being responsive, open about failing fast enables genuine learning that creates innovation that delivers sustainable tangible business benefits
Let me know what you think…