5 premises of a digital strategy
A digital strategy is not just about outlining how to adopt new technology, it’s a blueprint for an entirely new mindset and way of working. As we enter the most transformational time in human history, we have to move away from ‘business as usual’ thinking and accept that the way we work will never be the same as before and the skills we’ll need will be dramatically different too. This will be hard as the economist Keynes famously noted: ‘the difficulty lies not so much in developing new ideas as escaping from old ones’.
The following five premises form the central basis of every digital strategy, and when combined, will underpin the success of a digital business transformation.
1. Creating a single view of the customer
The combination of advances in cloud technology, along with the rapid adoption of smartphones and the rise of interconnectivity has changed what customers want from you – real-time information, on mobile, 24/7.
Digitally native companies have been swift to respond and meet the needs of the new consumer. They recognised early-on that providing a good customer experience wherever their customers were would be a key differentiator in a digitally connected marketplace. They identified new omnichannel paths to purchase that included physical, digital, mobile and desktop devices and realised the importance of tying together the behaviours across these different touch points to create a single view of the customer.
Top tip: your digital strategy needs to begin with an understanding of how customers would ideally like to engage with your brand as they move through their relationship with you. It should map out their path to purchase across all touchpoints and reflect any major differences between key audience segments you are seeking to target.
2. Recognising that the competition has changed
Digital technology has given rise to the growth in asymmetrical businesses competing to solve the same problem for the consumer. You only have to look at what Uber did to taxis, Netflix has done to DVD rental, and how Spotify upended the music business to realise that competition is radically different in a digital era.
There are now new ways of working that were never considered possible before, such as the increase in ‘frenemies’ or ‘coopetition’ – where two companies who were once fierce rivals in some aspects of their business, are now closely enmeshed as partners or working together and trading with each other.
Top tip: your digital strategy needs to do a 360-degree analysis of what’s happening in the wider world of business, rather than just focusing on what’s happening in your sector or industry.
3. Using data in new ways
The rise of the Internet of Things and the introduction of sensors, tracking codes and geolocation tags means we’ve never generated as much data as we are doing today. Data is not just coming from our computers, web servers, or our smartphones, but from all kinds of devices, including thermostats, jet engines and even lamp posts too.
Businesses that use their data as an asset, rather than for just improving operational efficiencies, are gaining a new source of value creation. If you take a look at the top 20 most successful businesses in the world (Amazon, Alibaba, Facebook and Google to name a few), all of them have built their empires on data.
Top tip: understanding and utilising of data should be central to every digital strategy. The strategy should look at new ways of collecting, handling and working with data. This means taking it from departmental silos or divisions (such as transactional data, conversions, behavioural) and bringing it together to create a more holistic view of the business.
4. Taking a new approach to innovation: failing fast & trying again
Gone are the days where long development cycles prevail, and the HiPPO (highest paid person’s opinion) makes all the innovation decisions.
In a digital era, innovation is approached in a radically different way. Many businesses are adopting the Silicon Valley start-up approach, where a product is never finished and that every new innovation is released as a beta, ready for continuous evolution.
Phil Simon, a recognised authority on how technology impacts business, says that being risk-averse is a “serious impediment” that plagues many established companies. “For every Google, Amazon or Facebook taking major risks, hundreds of large companies are still playing it safe,” he says. “Today, the costs of inaction almost always exceed the costs of action.” He believes that businesses must acknowledge failure as a prerequisite for success. “Failure is a valid outcome,” he says.
Top tip: plan and design a minimum viable product (MVP) and learn as much as you can early in the process. Take your learnings and move to the next step, be fast and iterate.
5. Adopting technology for a purpose, not an end in itself
Unless a technology is proprietary to a company, it ultimately won’t provide a competitive advantage on its own, said Nicholas Carr the eminent writer on technology in an article he published in the Harvard Business Review. The trap to avoid, according to Carr, is focusing on technology as an end in itself. Instead, technology should be a means to a strategic end.
Top tip: a digital strategy should set out to identify and unify multiple technology stacks and platforms which typically include: an experience platform/web content management system, marketing automation, CRM and e-commerce systems. These tech functions often work in silos but should be married together so they work in synergy.
Come and talk to us about how we can help you navigate your digital strategy to kick-start your digital business transformation.