Digital Means Strategy

Team Capital Guest Blog by Markus J Becker, former Global CEO of Swiss Post Document Solutions Group. Markus is an expert and thought leader in Digital Transformation and has appeared on the BBC and Channel 4.

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With an ever-increasing pace, new technologies are entering our everyday lives and have a lasting impact on how we act as consumers, as private citizens and as business leaders. How we take advantage of such technologies in response to changing consumer and employee behaviour as well as in production and supply chain can make or break the future of any business.

The combination of the four digital technologies, namely flexible data storage and applications access (cloud computing), availability of a near-complete information pool and the power to process such (big data), changing behaviour to one-to-everyone communication (social media) and the unstoppable mobilisation of data (mobile devices), creates a digital revolution that no business leader should ignore. The innovative power of these four digital forces will inevitably have a disruptive impact on any business and if the Pope accepts this (he tweets as @Pontifex) you may find it hard to find an excuse. The question is how you can use it to your advantage.

Understandably most companies can draw little benefit from comparisons with high-tech firms such as Google, Amazon or Apple who are hailed as examples of digitised business models. However, research conducted by the MIT Center for Digital Business together with Capgemini Consulting across many large “traditional” companies shows that companies with a high digital maturity generate up to a 26% higher profitability compared to those companies who only tactically adopt new digital technologies. Such companies are changing how they work, how they interact and sometimes even what they are as part of their digital transformation journeys.

It is happening, whether you like it or not

Ignoring the digital revolution tends to be a bad idea when you look at companies like Kodak or Encyclopædia Britannica. And there may just be someone out there that is reshaping his business model, which will end up being disruptive for not only your business but your whole sector. Remember what online business models did to the newspapers industry or the music industry!

Sounds big? Because it is. This is not about executing one project with a set timeline and budget and a steering committee overseeing its progress. It is a journey that affects leadership, culture, skills, brand, and many existing strategic assets of your business. Although digital technologies are the drivers for this, it is not primarily about removing paper from your business, albeit this is likely to be a welcome benefit. The focus is on leveraging digital innovation to better engage with your customers, empower your staff to tap into the intellectual energy across your organisation, remove inefficiencies in your production process, optimise your supply chain and develop additional revenues streams. It’s about changing the way you do business and taking advantage of the possibilities new technologies provide.

Sometimes digital technologies are used to replace substantially the same functions with different technologies (e.g. automated invoice processing), other times they can be used to enhance the customer experience (e.g. billing data analytics) or operational processes (e.g. mobile front-line support), both delivering solid benefits to the business. However, most significant value is created if a process is fundamentally redefined using digital technologies (e.g. location-based services, predictive analytics).

Develop a digital-ready culture

A framework for a successful journey comprises of normative, strategic as well as tactical elements. Whereas bespoke operational changes are being implemented in an iterative approach, it is imperative that an organisation firstly adopts a “digital-ready” organisation. And as with any normative changes, the main focus lies on leadership, vision and engagement all impacting on a company’s culture.

A transformative vision focuses equally on how to drive change as it does on what that change includes and can only be developed from the top of an organisation with a helicopter view of the business. It can entail qualitative aspects (e.g. improved customer satisfaction) or quantitative objectives (e.g. reduced time from design to production, faster issuing of credit card to applicant, 30% of revenues generated through online channels).

Change starts when such vision of the future is communicated effectively across the organisation. In a digital-ready culture, such communication typically ignores hierarchical structures. It works bi-directionally allowing for a real dialogue between leaders and an engaged organisation. Enterprise social networks can greatly facilitate the change in collaborative and communicative behaviour and have the ingredients to lastingly alter cross-company collaboration.

A digital vision drives behaviour

From a compelling vision of a future we can develop a functional path to move the business to such desired future state and break it down into individual projects and initiatives. Some of these projects will be based on clear business cases with tangible benefits, others might be more experimental with limited funding and risks. This is a reiterative process taking into consideration environmental changes, internal and external responses as well as required skills and infrastructure.

Translating the digital vision into actionable plans means shifting the focus from the governing framework to the company’s strategic assets and business capabilities, i.e. identifying which of these can gain an advantage through digitisation. Digital innovation can impact any part of the business, it is not only about multi-channel customer fronting activity and consumer behaviour modelling . Digitisation creates mobility and along with it track-able information. Analytics of such information can help uncover previously hidden correlations and patterns that may be essential for decision making in the production process or as part of an integrated supply chain.

Most leaders are aware of the digital technologies available today, but struggle to see how they may be used to give their business an advantage. To make use of digital innovation goes above placing a Facebook link on the company Website and centres around how to change the business by integrating digitisation into anything the business does externally and internally. Transformation originates at the top, moving the business to a successful digital future.

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