What does it mean to become a Digital Enterprise?
The annual MIT CIO conference is one of the leading events for thought leadership in Digital Transformation. During this year’s conference they spent time defining what it means to be a Digital Enterprise.
The Definition of a Digital Company – Jeanne Ross presented what it means to be digital and how companies are progressing.
- A True Digital Offering is an Information Enriched Solution that Engages Customers in a Seamless and Personal Experience to deliver Customer Solutions.
- It’s no longer sufficient to “Enable” customers instead companies must “Inspire” their customers by leveraging ubiquitous data, unlimited connectivity and massive processing power
- New customer solutions offer new value propositions and discover new sources of revenue.
- Only 28% of companies have an operational backbone to support a truly digital enterprise – therefore 72% of companies cannot become a digital yet!
My Summary: Being digital requires being open to reexamining your entire way of doing business and understanding where new opportunities of value can be unlocked.
Digital means developing new offerings to improve how customers are served. This is grounded in an obsession with understanding each step of a customer’s purchasing journey— and thinking about how digital capabilities can design and deliver the best possible experience.
These enhanced front-end experiences must be able to talk to updated back-end systems that can withstand the increased scale of transactions via API’s.
Digital Winners versus Losers – I heard 4 major actions that companies can take to become a digital winner versus a loser.
- Every company must now consider themselves a technology company even if technology is not their core business. If this isn’t clear to the C-Level and the Board then a company’s survival is at risk.
- Business as Usual is not an option. The first task a company should perform is a threat analysis for digital technologies. This will show that waiting and not taking action is the riskiest decision.
- Companies lagging in their digital makeover are the ones that are struggling to put the customer at the center of their digital initiatives and do not focus on customer journeys.
- Companies leading in their digital makeover have Executives driving the digital change and those who can’t join them must leave. This means companies must determine if they even have the right leadership to pull this off. After companies go digital as much as 50% of executives leave due to a lack of fit with the new digital order.
My Summary: Orchestrating a successful transition to digital offers significantly higher revenue and increased profitability. Companies who think they have time to navigate this transition are placing their companies at ever increasing risk. The pace of change is accelerating every year and loyal customers will quickly leave for a better frictionless experience from a new entrant if large companies don’t offer one first.
Example of a Digital Winner - Peter Weill presented 6 questions the C-Suite must answer to achieve Digital Transformation and one example of a company that achieved success with this methodology.
- BBVA – This bank undertook six key actions to transform themselves into a digital company:
- PERFORMED A THREAT ANALYSIS: Recognized there was a major gap between customers and retail banks that could be closed with digital offerings.
- BUSINESS MODEL: Viewed themselves not as a bank but a KNOWLEDGE BASED INFORMATION COMPANY.
- COMPETITIVE ADVANTAGE: Instead of focusing on the rooftop of products and services they focused on building a digital foundation.
- LEADERSHIP: STRONG VISION that MADE HARD DECISIONS and ENGAGED EVERYONE.
- CAPABILITIES: PERFORMED Organizational Surgery on talent, culture, customer solutions and engineering. Started AGILE TEAMS.
- CONNECT: Made Customer’s cell phone their own remote control so everything was purchasable in under 1 minute.
The results from BBVA’s initiative were impressive:
- Digital accounts for 36% of all products and services sold
- #1 in NPS in eight core markets
- Grew Digital Customer base by 44% to 18M Customers
Summary: What used to work in the past doesn’t work today.
The conference hit the key pain point in industry today – the major gap and disconnect between vision at the C-Level and execution below. Closing the execution gap when the pace of innovation is accelerating requires doing things differently than before:
- Different Business Models: Companies must start with a threat analysis of how digital can upend their future. Then they must start viewing themselves as a Knowledge based company
- Different Leadership: One speaker noted that “Going digital is like an intervention! You have to drive serious behavioral change in your staff.”
- Different Workforce: Simple hiring is not going to work as there is a shortage of workers with sufficient skills.
- Different Technology partners: Big companies are going to have to find innovative and nimble partners.
Companies must start now and or risk being disrupted by an unseen competitor.
Have I forgotten anything? Please let me know at firstname.lastname@example.org.