Today, digital technologies have evolved to include multiple transactions and digital integrations to their processes. Some of these technologies are: Internet of Things, Artificial Intelligence, Big Data, and Machine Learning. Finding ways to react and shape digital disruption should be on the agenda of each member of the Board of Directors and the Management Committee.
Digitization is no longer a complementary feature of existing channels, products and services. In contrast, many aspects of the customer experience are digital by default, such as the processes that underpin it. Leveraging digital technologies is more than just a good deal—it's critical in order to stay relevant and profitable. Lagging companies in this area risk losing ground to new entrants and business models that are ready to disrupt markets with innovative products and services.
The most obvious industries interrupted by digital are music, retail, media (print and TV), and tourism, but similar patterns are occurring in more traditional industries such as banking, agriculture, energy, health care, industrial goods, and manufacturing. For any industry, speed is essential. Accelerating digital transformation should be a key priority for any company that wants to compete in the future.
How can leaders maintain their competitive edge in the new digital economy?
DIGITIZE YOUR BUSINESS
It's not about implementing traditional IT projects (most of these projects don't add value to the business or its customers). Instead, an ERP project can give a lot of order and control to the processes. Sadly, in the face of the consumer there is very little value and innovation for the customer experience. Digitizing the business is primarily about transforming business processes to make them faster, more agile, and more profitable. Think of where is it that digital efforts can bring the biggest changes in performance and value for your customers, not only in marketing, but also in operations and management. Successful companies tend to cope with many efforts in parallel, using standardized processes and agile techniques to accelerate execution and provide more flexibility to iterate into strategy. See the digitization platforms of companies like Salesforce, Magento or Liferay; many of these tools have free licensing that will help you with innovation in your company.
CREATE VALUE FROM DATA
Your main goal should be data! There lies the secret to the success of a Digital Transformation strategy. Every company should look for new ways to collect more and better data from its customers, which sounds simple, but requires valuable techniques and methodologies. Then you should focus on better using internal and external data. Companies that use large amounts of data effectively tend to generate higher revenues and come up with more innovative project ideas and capabilities. In the process, they create completely new revenue streams, business units, and independent businesses.
TECHNOLOGY + METHODOLOGY
In this Digital Transformation operation, it is important that your company automates processes with platforms that make it easier to achieve goals in the shortest possible time. A very common mistake is to leave your strategy in a lot of coding that doesn't necessarily channel methodologies that help you succeed. You should always support the adoption of new technologies with methodologies that give you optimal ROI.
PROTOTYPE OF YOUR STRATEGY
The most successful companies in the Digital Transformation processes test and refine products and strategies in close cooperation with customers at a breakneck pace. The traditional three- to five-year strategy and planning process is no longer effective. Agile methods of innovation have been successfully pioneered in companies such as Google, Amazon, Apple and Tesla, companies that have demonstrated that there are real advantages in the following areas:
- Learning by doing
- Fast and frequent delivery of functional products inspired by the real needs of the consumer
- Develop innovative delivery methods and value propositions
- Adapting to changing requirements
Take methodologies of companies such as IDEO or Strategizer. (two of the companies with which we carry out our consultancies). You can view the free prototyping tools they use, which will be of great help in contextualizing the Digital Transformation process.
MAKE YOUR BUSINESS DISRUPTIVE (BEFORE OTHERS DO)
To survive in the world of exponentially growing competition, companies need to create innovative businesses that allow them to be more disruptive in their own approach. Companies can build a strategic advantage by leveraging existing strengths, brand recognition, existing customer relationships, and specialized products and services. The key is to do it fast! Digital speed is up to five times faster than traditional business work, and that speed is essential for becoming a fast leader or follower. Use Design Thinkign methodologies to reinvent your business processes and models to create new product and service proposals for the market.
POSITION YOUR BUSINESS IN THE LARGEST ECOSYSTEM
Ecosystems are increasingly important in the digital economy. They are becoming essential to building new relationships and capabilities, leveraging new technologies, and accelerating innovation. By collaborating with partners and institutions, companies can create new opportunities to address consumer needs in B2B and B2C spaces. Platforms that enable devices, applications, data, products, and services to work together in new ways, become a central part of the overall business strategy.
Finally, remember that there is no single path for Digital Transformation. What’s paramount is to take the first steps to digitize your company's processes. Look for small, measurable, controlled, and impactful achievements that can deliver results to the Board and Management. Executives who adopt these six recommendations are committed to genuinely transforming their businesses. This means assuming some risks in terms of strategy and execution, which might be intimidating yet smart, given that otherwise, they run a risk of a fate worse than disruption: extinction.