What does it mean to be “digital”?

“Digital” can and does mean different things to different organizations.  But many organizations have allowed the term “digital” to distract their thinking.  To those organizations, “digital” may mean just standing up a responsive website or rolling out a mobile app.  While doing those kinds of things does allow the organization to leverage technology, frankly, the technology part is the “easy part” of the digital equation.

Progressive organizations realize that “digital” means much more than that.  To those organizations, “digital” recognizes that the use of technology is critical to achieving business strategy.  But it’s the business strategy that dictates the use of technology – not the other way around.  Business strategy has to answer the what, why, when, and who about the use of technology, and then how technology enhances or enables the customer experience.

While “going digital” has become critical for today’s businesses, it is not a decision to be taken lightly.  The effective use of digital technology will have far-reaching impacts beyond just the technology.  As your organization becomes more “digital”, the following areas will also increase:

  • Transparency – The digital approach establishes a clear line of sight between organizational strategy, tactical decisions, and daily operations.
  • Data-driven decision making and process execution – The presence (or absence) of data is the basis for making decisions and executing processes. In the digital economy, manual interventions should be considered “bugs”.
  • Communicative – Information and feedback must be dispersed quickly across all parts of the organization, so that people stay aligned with the organization’s digital strategy, challenges can be quickly addressed, and successes can be recognized and celebrated.
  • Empowered teams and people – When businesses are working at digital speeds, the people within those businesses must be empowered to make decisions and manage issues. In the digital economy, there simply is not time to escalate every issue or decision.

“Digital Transformation” vs. “Digitization”

“Digital Transformation” and “digitization” are terms that are often used interchangeably.  However, there is a significant distinction between digital transformation and digitization.

Digitization is applying or using technology to enhance existing ways of doing business. An organization can incrementally improve through digitization.   Digitization can result in new ways of doing work, or new ways of doing new work, but this work is based on existing business models.  Examples of digitization[1] include:

  • Processes become automated.
  • Content produced by the business move from hardcopy print to electronic formats.
  • Customer engagements move from phone calls or emails to interactive chats or social media interactions.

Digitization can result in operational improvements but is not the same as digital transformation.

Digital transformation results in completely and dramatically new business models, through exploiting technology. Digital transformation results in new value propositions, new markets and customer bases, new products, and new partnerships.  Digital transformation is really business transformation but featuring technology use as a central element of the development of business strategy.

Should you digitize?  Yes – I think digitization is critical for businesses in the digital age.  Digitization is a foundational requirement for digital transformation but is not the same as digital transformation.

What about “Digital Disruption”?

Digital disruption refers to the changes that occurs when new digital technologies and business models affect the value proposition of existing goods and services.[2]  To understand digital disruption, think about the impact that ridesharing services like Uber and Lyft have had in the taxi industry.  Uber and Lyft dramatically changed the way that people obtain and use transportation, by making it so convenient to use transportation.  Everything regarding a trip from point A to point B is addressed – routing, payment, the time of pickup and arrival – all from a mobile device.   But the impact of this digital disruption hasn’t stopped with just the advent  of Uber and Lyft – many taxi providers have rapidly deployed mobile apps to mimic some of the conveniences introduced by the ridesharing services.

Digital disruption is nothing new; we’ve had disruption occurring for several years.  Think about it – what was the impact of email on the postal service?  What was the impact of corporate websites on marketing and advertising agencies?

The point is that after disruption occurs, the impact and result of that disruption soon becomes the normal way of doing business.  Websites have moved from novelties to critical aspects of a company’s   branding.  Can you even imagine a world without email?

But regardless of whether your company is digitizing, leading (or feeling the effects of) a digital disruption, or going through a digital transformation, the digital age has arrived.

What the digital age means to every business

The digital age brings new opportunities and challenges for every business.

  • Always on, always connected – In the digital age, consumers are always online and expect to be able to connect and interact with your business from anywhere, at any time, from any device. Your “store” cannot be closed.
  • User experiences are hyper-critical – While value will continue to be important, the user experience will trump value. A poor user experience will cause the user to abandon the interaction. Continued poor experiences will result in users sharing their experiences socially, damaging the reputation and ultimately revenue of your business.
  • “Digital” is not the responsibility of a single department – Digital is not just something that the marketing or the IT department do, but something that includes all parts of the organization. In other words, the business must truly work as an enterprise, not as a collection of parts.  If one part struggles or fails, the entire enterprise suffers.
  • Not becoming “digital” may mean your business gets left behind – For many businesses, the digital age will result in expanding their business model from just a business-to-business model to include a business-to-consumer model. And consumers demand an effective and frictionless digital experience with your business.  If your business cannot deliver that experience, the consumer will simply take their business elsewhere.

Three things your company must do before you can “go digital”

The digital age is here. What must your company do to “go digital”?

  • Set your “digital course” – Get clear on what your need to do, but more importantly, why you need to do it.  What does the business need to accomplish?  Why?  What will the business no longer do (if anything)? Setting your digital course is the critical first step so you can move your company into the digital age.  Setting your digital course establishes your “true north” and becomes the foundation for organizational and cultural change, process design and improvement, and helps separate the trivial from the important.  Remember, the digital course must take a “business-first, then technology” approach; otherwise your investments in technology will be wasted.
  • Map current value streams – A value stream map represents how information and materials flow through the organization to deliver value to the customer. Businesses do evolve over time and very often, supporting processes have not been changed to reflect the changes in the business. Or business processes are not well-understood or documented.  Observe and map the value streams of your business so you have a complete understanding of how work and information moves through your business to the customer.  Once you’ve completed that, identify and assign accountability for each value stream, so that there is ownership for that value stream. Remember, customers do business with the entire organization, not just a single department within the organization.  Assigning accountability ensures that the value stream will deliver the outcomes required by your company and ultimately the customer.
  • Develop customer journey maps – The customer experience matters! A customer journey map depicts the steps a customer goes through when engaging with your business when buying products and services.  Develop customer journey maps so you can put yourself in the customer’s shoes and experience doing business with your company from the customer perspective.  This helps identify what is working well as well as areas for improvement.

How Tedder Consulting can help

Tedder Consulting can help you plot your digital course.

  • WorkshopsWorkshops ranging from “Defining your Digital Strategy” to “Customer Journey Mapping” and “Value Stream Mapping” provide you with the tools you need so you can get your digital initiatives heading in the right direction.
  • Training – Tedder Consulting provides certified  VeriSM trainingVeriSM is the service management approach for the digital age. VeriSM training gives you the knowledge you need so you can understand and leverage the management practices and emerging technologies of the digital age.

Want to learn more?  Contact Tedder Consulting  to discuss how the digital age will impact your organization – and what you need to do now! 

[1] https://sloanreview.mit.edu/article/dont-confuse-digital-with-digitization/

[2] https://searchcio.techtarget.com/definition/digital-disruption

 

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