Digital strategy is a broad term, involving injecting new technologies or digital capabilities into your business. For some, its about improving business systems and processes, or using marketing automation across social media channels for brand management and customer engagement. For others, its about investigating how exponential technologies can open new business opportunities. Digital is fundamentally shifting the business landscape in all sectors, and it’s easy to get left behind. At greatest risk are larger incumbent firms, who need to leverage brand and data to remain relevant, but may struggle with change management. With an increasingly low barrier to entry, new entrants can enter the market from unexpected places. Innovative startups are challenging the status quo to disrupt entire industries; a quick look at the Techcrunch Unicorn Leaderboard shows an interesting selection of rapidly growing private companies with post-money valuations of over $1 billion.
Key drivers of digitisation include an increase in customer expectation, an increase in price performance with more being delivered for less, and the ability to plug in a particular digital capability. There’s an interesting McKinsey article here on the value of digital, with “digital winners” collaborating and sharing data, and investing in IT infrastructure flexibility. A key strategic business decision can be whether to “attack or defend” a market position, and with so many options and possibilities a company must ensure it takes the most effective path. An understanding of the P&L in the medium term can help determine the amount of investment in digital, and the speed of execution required to remain competitive.
Exponential technologies have reached a price performance tipping point, with many business leaders considering or implementing intelligent, digital, and mesh technologies. Gartner describes the top 10 technology trends for this year as:
- Artificial intelligence (AI) and advanced machine learning, including neural networks, deep learning, and natural language processing. Systems can learn, and modify future behaviour.
- Intelligent apps including virtual personal assistants (VPA’s), utilising analytics and AI to improve the customer experience.
- Intelligent things, including drones, autonomous vehicles and robots. Existing Internet of Things (IoT) connected devices become AI embedded, leading to collaborative learning networks.
- Virtual and Augmented Reality (VR and AR) immersive environments are widely available, and are being further developed to include all human senses.
- Digital twin — creating a digital representation of real world physical assets enables simulation and scenario analysis.
- Blockchain, a type of distributed ledger in which value exchange transactions are sequentially grouped into blocks, providing transparency over information in the chain, and adding trust to untrusted environments.
- Conversational systems, enabling people and machines to communicate across the digital device mesh including through sensors and IoT systems.
- Mesh app and service architecture (MASA), a multichannel solution architecture delivering flexible and dynamic solutions. Intelligent mesh architecture, including cloud, microservices and API’s, provide complete interconnected experiences.
- Digital technology platforms, the building blocks for a digital business, including some mix of information systems, customer experience, analytics and intelligence, IoT, and business ecosystems.
- Adaptive security architecture to support the above.
Many business leaders I’ve spoken with have taken the challenge up, and are working on business transformation options. There’s no doubt that digital strategy is essential, and defining what this might be for your business can be complex. The speed at which industries can be disrupted is accelerating, so keep an eye on the technology trends that are emerging in your sector.
And take action sooner, rather than later.