Information Technology Management with a Purpose

Aug 23 2015   11:15AM GMT

Going Digital

S R Balasubramanian Profile: S R Balasubramanian

Tags:
digital
digital business design
Digital disruption
Digital strategy
Digital transformation

Digitization is a subject which is current and hence everyone likes to dabble in it, itching to get on to the bandwagon. They know if they don’t embrace this new approach others would do so and run away with the booty. Therefore we find companies rushing in to go digital and pull all stops to get there first. Though there is nothing wrong with companies adopting contemporary methods and gaining a competitive advantage in the market but they need to take a considered view and proceed with a bit of caution ensuring they take the right direction with everyone on board.

Differing perceptions

Since so much has been written and spoken about going digital, it is but natural for executives to be bombarded with information and opinion coming in from various sources. Using this input they develop their own perceptions and lend their weight to the digital initiatives in the organization. For some executives it is all about extensive use of technology, for some others it about a new and effective way of engaging with the customers and other stakeholders while for the rest it may be about an entirely new approach to business and growth. While none of them would be wrong in their assumptions, these differing perspectives could cause hurdles to charting a clear and an unambiguous path for digitization. Such a lack of alignment would inhibit working out of a common vision about where the business needs to go. In such situations, companies may embark on a few piecemeal initiatives or make uncoordinated efforts which may result in missed opportunities, sub-optimal performance or false starts.

Business leaders therefore should have a clear and a common understanding about what digitization involves, what it means to them and the resultant impact on business. They should delve deeper and evolve a meaningful digital strategy to drive business performance and to achieve business goals. In order to make this work, one can look at the following three objectives of digitization to lend clarity to the approach.

Creating new opportunities

Digitization opens up new possibilities that the organizations can exploit and be ready to reexamine the entire way of doing business as also to explore new areas that provide value. It may be new methods of service delivery or newer methods of engaging with the customers or starting new businesses that are possible now with digitization. For example ‘Internet of Things’ opens up new opportunities for disruptors who can use unprecedented levels of data capture & accuracy to identify weaknesses in value chains and to take immediate corrective action. Using mobility and location aware sensors, companies can be in touch with developments on the ground and take proactive steps to get ahead of the competition. This requires company’s commitment to understand the implications of the developments in the marketplace and to evaluate how they may present opportunities or threats.

Adding value to the current business

The next element of digitization is to use this new capability to improve existing level of delivery, customer service, stock movement, decision making etc. For example understanding each step of the customers purchase journey, irrespective of the channels, and then using digital capabilities to ensure the best possible experience to the customer would be one such step. Similarly the supply chain can be improved upon for greater flexibility, efficiency and speed to deliver the right product at the right place. At the same time, data and metrics can focus on delivering insights about customers that in turn drive marketing and sales decisions. These will be cyclical dynamic processes where processes and capabilities  evolve based on inputs from  customers and other supply chain constituents.

Making technology work

Another element of going digital is about building technological and organizational processes that allow an enterprise to be responsive, agile and efficient. The basic platform on which the new initiatives would run will have to be properly designed and adequately equipped to handle the new demand of the times. IT systems will have to be architected afresh and decoupled from the earlier legacy systems. The new platform will have to be flexible, agile and open, in order to handle company’s response to the changing market conditions. A key feature of digitized IT is the commitment to building networks that connect devices, objects, and people. This approach is embodied in a continuous-delivery model where cross-functional IT teams automate systems and optimize processes to be able to release and iterate on software quickly. For these to work, it will be important to address mindsets of people so that they adopt and work with the new processes. Companies often create small teams which work iteratively to bring about initial changes and help institutionalize these methods and build capabilities for the longer term.

In conclusion I would say that the objective of going digital should be to unlock growth. Companies may interpret or act on this in different ways, but by having a clear understanding of what digital means allows business leaders to develop a shared vision of how it can be used to capture value. When rightly applied this could take the organization to the next level of growth and performance or otherwise they would just rue their missed chances.

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