Reimagining the possibilities for business by becoming a digital enterprise is a key expectation in competing for success and survival in the future for many businesses around the world. This is a tall order that calls for going beyond creating revenue by mere digital substitution. A digital strategy that focuses on specific business outcomes leveraging various forms of digital technologies can create an edge for the enterprise and, in many cases, a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together, transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience.
The reality is that any company large or small, old or new, can leverage digital technology and principles to create a winning edge for its business and, perhaps, its industry. Your customers, competitors and suppliers are all digital now. More often than not, you can’t address this change with a bolt-on strategy that adds an app here or a site there. You need a comprehensive strategy that embraces both digital markets and digital operations.
While this may be early times in the digital journey of enterprises, a few things are clearly known to be central to several digital initiatives. For instance here are some of the big drivers:
- Digitized interactions drive data growth – so much so that a new framework is needed to just manage this. Customers have even bigger power, and they don’t hesitate to assert it. Technology is just a component of products and service but perhaps among the most significant. Media fragmentation upends traditional marketing. Customer experience is the differentiator and, in many cases, the most significant factor for successful digital initiatives.
All the drivers listed above dictate several actions for digital businesses. Specifically, they must:
- Position themselves to engage successfully with customers and manage their experience.
- Understand and leverage the strategic importance of new and emerging business models and the various options for monetization including mobile and contactless payments.
- Thoughtfully balance creating the future while judiciously leveraging the past where it matters – balancing between renovating and modernizing the platforms while managing productivity, governance and control in synthesizing their operational platforms. This includes but is not limited to:
- Creating a new front-end state of the art digital experience
- Rearchitecting and upgrading technology platforms to run matured legacy back-office functions
- Leveraging state-of-the art application development enabling mobility and cloud as native ingredients for a successful digital-age platform
At a deeper level, to get to the best digital customer experience, organizations must recognize the following:
- Data is king, whether it comes from the outward-facing systems of engagement or inward-facing systems of record. The most effective digital business efforts will enable closing the loop at ease. This must be done by meticulous integration, standardization, analysis and application of data from both types of systems covering all processes into business planning and management.
- Superlative efforts are needed in IT leadership. There has never been more need for, or more value in, IT leadership cooperation and involvement with key business management and control functions like finance. There’s no scope for success without the right integration of the IT function with business functions.
- Process redesign is necessary to make the digital ecosystem more agile. Typical back-office functions such as mortgage review go through 35+ manual handoffs, an anachronism in modern digital-age speed in which responses are needed. Likewise, in every industry organizations need to examine their processes for substantial transformation/facelift possibilities to keep up with the times.
The most significant challenges to digital business success are people centric, not just centered around IT and processes alone.
Finally, here are the significant constituents of success in digital business:
- Providing superior customer experience of digital offerings
- Managing the monetization of digital offerings
- Developing solutions in a digital architecture that embraces cloud and mobility
- Agile development for an agile business. New technologies, applications and sourcing strategies need to be accompanied by new delivery methods such as “agile” development, which stresses rapid, collaborative, iterative and incremental software development involving cross-functional teams.
Let’s examine each of these in little bit more detail.
Customer Experience Management (CXM) is at the heart of this transformation. CXM is an essential discipline because it concerns what matters most to customers in their experience journey. This includes their thinking process, expectations and learning throughout the life cycle, covering all elements involved therein.
Unarguably, in the digital world, experience triumphs the value associated with product or services in and of themselves. The digital capabilities can substantially alter and elevate that experience, but more importantly would be able to collaboratively capture data about the experience and feed it back to the enterprise to correct and upgrade their experience delivery for future occasions. This level of expertise in understanding how to engage with customers and manage their interaction throughout their journey and learn adequately to provide superior experience on an ongoing basis is the key tenet of being customer centric in the digital age and acts as a foundation for digital success.
Business models and monetization
It’s now clear that resilient and reborn digital companies will have to look at actively creating new business models for engaging with customers. This includes actively breaking existing business models of engagement in some cases. Examples: taxi and hospitality companies reexamining their business models in the age of Uber, Airbnb, etc.
Reimagining and managing monetization in a digital business requires a complete reassessment of solution options and customer value delivery mechanisms. This is not just an exercise in choosing among various options or making every service a subscription business; it’s actually more involved than that. It’s a real possibility to create a unique approach and framework in serving customers, which could become a digital signature for enterprise success.
This requires deep commitment and focus to stay the course and provide sufficient investment and research support to sustain and grow the model. In this fast age of competition, very few real barriers can be built, and those that can serve as a differentiator must get needed resources and attention to grow. The business should gear to address unanticipated changes in the market quickly and efficiently. Mere digital enablement would not meet the competitive threshold of success.
To compete as a digital business, enterprises should look for a quantum jump in stretching the best of the past and quicker adoption of the future. Copious leverage of the capabilities that new digital technologies provide will be a key determinant of success in the digital world. Cloud, mobility, the Internet of Things, and robotics provide an unmatched range of opportunities and at their intersections provide huge opportunities to experiment with new models of engagement.
A quick ability to roll out, test for success, launch and re-launch based on results is a fundamental expectation in the digital business era and the system need to enable this with ease. Needless to say, the classified back-office system needs to be sufficiently upgraded to keep pace with demands made on a business in the digital era.
Many businesses demand liberation from the response limitations that IT imposes when they want to try a new market initiative and get upset with the slow pace of change that’s generally possible with IT inside the enterprise. In the digital age, such expectations only get higher. So enterprises that have their back-office system and data available for quicker, cheaper access and amenable for experimenting with new models of engagement would be valued higher.
Developing digital solutions that are services-oriented and layered into multiple tiers on both the client and the cloud requires architectural mastery, and this is a key determinant of business success. The competitive advantage will come from flexibility and reach; both are essential needs in a digital business.
Digital business success does not spring out by just leveraging technology nor by just conceptualizing new business models of engagement. Success comes out of being able to fuse together as a holistic phenomenon with participation and support at all levels of management.
Every organization will find their own ways and means to adapt to digital business and deliver customer value. Of course, enterprises need to carefully calibrate and define their own models of success in the digital age; but they can’t succeed without mastering customer experience, monetization models and platform resilience as core capabilities. In addition, digital business transformation is a journey that takes many years and quantum efforts to stabilize, so the effort requires constant focus to sustain and grow.
There are various constituents of digital business that redefine value creation inside the enterprise. Successful enterprises win by a differentiated approach to innovation through varied approaches on how business gets created and managed as well as rethinking IT strategy, operations, customer engagement and sustaining focus and investments to enable digital business. This is the mix that every enterprise need to focus on to taste success.
Sadagopan (Sada) Singam is vice president (Global) and business leader at HCL Technologies.