React to digital disruption
A change in the general operating environment of business demands that firms re-evaluate the products and services they offer, and how they offer them. This is particularly very necessary in customer- centric industries because of intense competition for customer loyalty, improvements in Information Systems (IS) and supply chain distribution. There are both opportunities and threats to market positions due to new digital capabilities provided by expanded digital architecture. Digital transformation influences the realignment of business strategy and IT strategy.The idea of crafting a Digital Business Strategy (DBS) is to facilitate a strategically channeled digital approach to business challenges and look at how technology can be used to improve the way business operates and interacts with its customers.
A DBS moves or transforms the entire business vision, operations, functions and processes across the physical and virtual worlds to tap into revenue generating value. Digital technologies offer organizations new innovative ways to create customer value by utilizing digital business strategies, processes, and digital products.
Many of today’s digital masters and strategists outpace their marketplace competition, companies such as Apple, Google, Amazon and Walmart are the very obvious market share leaders in revenue. How about others? Fortunately, digital sales channels such as e commerce, online and social media platforms make it easy to set up small, low-risk experiments of integrated online and offline sales, with immediate results on revenues and value creation. Value creation is collaborated between organization and customers or suppliers via the digital tools, social media, mobility, analytics and cloud computing (SMAC).
Dulux and Plascon are leading brands of construction paint competing digitally to change customer experiences. Both offer mobile applications for customers to virtually swatch their rooms in different paint colour schemes before purchasing. With the mobile app, the different sample paint colours appear on the customers’ photos of their rooms with a tap of the screen aiding in purchasing decisions.
As Stephen Covey famously said, “Begin with the end in mind.” We are seeing organizations in customer-centric industries such as retail, banking or consumer services deploying revenue-generating products and services that their customers are demanding. Becoming digital enterprises offering digital products and services. However, this does not mean the total elimination of physical products and ‘brick and mortar” premises but in most cases a hybrid, integrating both the virtual and physical sales channels.
New business value models need to be identified according to the competitive advantage that can be gained through digitization.. Agility, customer centricity, collaboration, connectivity, speed, flexibility and efficiency of business processes may be the strategic objectives of operational departments that have broken down the walls of siloed business. Leveraging digitization produces value-multiplying business models in customer-centric industries such as financial services, real estate, travel, entertainment, and retail.
"The best way to predict the future is to create it." Peter Drucker
The Five Implementation Steps of the DBS Model
1. Adopt a digital culture
2. Merge Business and IT strategies into a DBS identify the required digital assets.
3. Create digital value propositions and business models
4. The re-aligned digital business model enhances the business processes
5. Implement the three organizational value models
© Copyright Albert T Mubako 2017. All rights reserved. Unauthorized use without express and written permission from author prohibited
Want to know more about the Digital Business Strategy (DBS) model and the five implementation steps above? Stay tuned , in the next coming weeks I will be offering a free e-book entitled “THE DEFINITIVE GUIDE TO A DIGITAL BUSINESS STRATEGY”