Is your Digital Strategy Working?

Digitalization is a multi-billion dollar industry for consultancies and IT firms of all sizes. Apparently, everyone is making money except the ones who are getting digitalized.

This may sound cynical, but is often a real board room topic in most companies. While they do see the benefits of digitalization but often struggle to unlock the full potential.

Even though the cost of deploying high-end technology is reducing every year, many digitally transformed companies are yet to successfully defend their markets or make money with newly enabled digital assets.It is for this reason many digital programs often get budget cuts midway or never get the promised hike in the coming years. In the end, they are often categorized as Digital Transformation or Change Management projects to justify the spending.

In the last decade, the Digital agenda has moved from the office of CFO to CDO to CFO to CMO to CIO to CTO, in general, it was never owned by them. One of the reasons being they have always seen it as an operational excellence activity.

While that could work for a company that focuses on Operational Excellence as a business model, but for companies that focus on product leadership or customer-centricity were never able to get a real return out of it.

Ironically these were the companies that were supposed to get the maximum benefit out of it.

As the real-physical-world becomes more and more digital, The Strategy itself in the future will become Digital, if not already for many industries.

While that’s a topic for another post, it is worth exploring how advances in technologies are making it easier and cheaper to do things than they were before – and that’s happening consistently year after year.

Anything and everything in the very near future will either be digital or enabled by digital.

It is, therefore, Digital Strategy must be driven at a strategic level.

Companies need to find where in their value-chain “digital” could bring real value.

While this is easier said than done, it helps to start with any two of the following three, which two to select depends on where you want to play.

That’s exactly what Uber did when they developed a Digital Platform for the Taxi business. Today Taxi owners are exasperated to see none of their investments in digital are able to fight with Uber’s business model.

How Uber made money from an existing business.

Remember it was not the big consultants or IT firms who made Uber or Amazon, but how advances in Digital Technologies allowed them to scale up on someone else’s business model.

Similarly, your strategy needs to identify digital opportunities in your business model or maybe your competitors’ business model.

You never know which part of your business or others business could become your biggest business in the future.

Also posted on LinkedIn here