A digital strategy is the analysis, development and implementation of an entity’s digital framework aimed to drive growth and optimization through technology. It looks at the organization’s assets (people, tools, infrastructure, among others) concerning external drivers such as competition and technological advances to define strategic goals and clear steps to accomplish the entity’s desired goals.
For Customers – At the beginning of 2019, it was estimated that there were 5.1 billion unique mobile users (Source: Hootsuite & We Are Social) and this number continues to grow at a steady rate. The digital world is becoming increasingly prominent across the globe, which creates a unique opportunity for organizations to reach out to audiences at a scale never seen before. A strong digital strategy can create the right environment to maximize the benefit of a connected world.
For Employees – Happy, productive employees are considered an extremely valuable commodity to organizations. Happy employees have been shown to boost productivity by 20% in the short-term(Source: SMF). This happiness is often derived from a good work-life-balance, interesting work, learning & career development opportunities, among other areas. The right digital strategy can help organizations implement digital initiatives that decrease laborious tasks (via automation for example), improves written communication (grammar & spellchecking tool), expands customer experience (CRM excel tool or Salesforce) and provides learning opportunities (for example, online classes from institutions such as Coursera). Engaged employees with the right tools to support their operations can help ensure a productive and successful enterprise.
For Making Sense of Data – According to DOMO, 2.5 M Terabytes (2.5 quintillion bytes) of data are created every day and this number continues to grow at a rapid pace. Organizations have the potential to find a lot of insights that can be derived from data, however, without the proper tools & know-how to help generate, process and make sense of it, data is just a bunch of 0s and 1s. Digital strategy can help businesses create the right framework to use data analytics solutions and tools to help make sense of the data and drive decisions.
For Better Investment Opportunities – There is a limitless number of opportunities that can be invested in. At the same time, companies have a limited amount of resource and not all opportunities have the desired return on investment (ROI) it may be looking for. The digital strategy creates the framework to help connect business objectives to a variety of potential digital initiatives which can help guide the implementation of projects with the highest ROI.
For Better Organizational Support – There are a variety of digital tools used by businesses to support their operations. Some are “generic” such as Microsoft Office while others are niche tools to cover a certain business or department need. Now suppose that the Finance department may have hit a roadblock with MS Excel after their 10th file reached 2GB and it is taking 2 hours just to open it. Now, there are hundreds of digital solutions available in the market that can solve this specific problem, however, knowing when to use a generic solution (think Microsoft Office) and when to use a niche one is a process that can be resolved with digital strategy.
Beliefs and ideals are considered an essential part of an organization’s core structure. To ensure that a digital strategy is successful, certain initiatives should be looked at throughout the process, which includes the implementation of digital initiatives at a later stage. A lack of consideration in this area can lead to suboptimal gains, employee resistance, dissatisfied customers, among other issues. Inspiring a culture of agility within the organization should be a part of the digital strategy and the broader overall business strategy. This in turn helps permeate a culture that has the flexibility to pivot to success at a faster pace than its competitors, an essential competitive advantage given the age of disruption society is currently in.
Data analytics is the process of looking at data and deriving outcomes that can support organizational decisions and improve performance (For more information about data analytics, visit our article “Data Analytics Explained”). A strong digital strategy must consider whether moving the organization towards a culture of analytics will drive sustainable competitive advantage or not, in such decisions, the use of data is essential for optimal result. It is worth noting that without the personnel with the right know-hows regarding data analytics, costly mistakes and less than optimal results may follow.
Some businesses may want to try to address business needs by utilizing a one size fits all digital strategy to cut costs or time. This can lead to a less than optimal customer experience in client related digital transformations. It can also lead to internal challenges risen by departments with diverse needs. Digital strategy should aim to navigate the needs of different stakeholders to strive for a solution that best suits diverse needs while also considering the increased cost of attempting to cover the needs of all.
The democratization of technology led by increased accessibility to electronics and the Internet has been a key driver in the growth of technological disruptors. For example, decades ago, small general stores were the go-to places to provide goods & services to the local community. Then, major department stores (e.g. Walmart) started to appear everywhere, driving small shops out of business. Today, technological advances are driving consumers to online e-commerce sites such as Amazon forcing competitors to re-think their overall business and digital strategy to match these new forces. Technological advances can be a two-edged sword: it can serve as a competitive advantage for forward looking, digitally inclined businesses, but also allows competitors to scale at levels never seen before. Creating a digital strategy that considers these opportunities and threats can be challenging in today’s environment.
According to McKinsey, 8% of business leaders believe that their current model will remain viable in the face of digitization. Although what worked yesterday may have achieved the desired results, understanding current and potential future environments are essential to ensure that the organization has the right digital strategy and initiatives to optimize short to long term success.
The answer in most cases is yes and no. It is beneficial to have, at the very least, a broad understanding of direction in which the department/organization should go while considering the following elements:
Regardless of the breadth and scope, there are a few other questions raised by Ken Favaro of act2 under HBR’s “Don’t Draft a Digital Strategy Just Because Everyone Else Is” that is also worth considering:
Several factors need to be assessed and studied to ensure a successful digital strategy. Among several aspects, here are a few: