The 3 types of digital strategy

Penny Webb-Smart
Sep 22, 2016 · 3 min read

Digital is a surprisingly hard-to-pin-down concept. While most people have a clear view about what digital is, their views differ widely, and often depend on what part of an organisation they come from. Someone in the digital team might think it’s about websites and apps; someone in IT will see it as being about technology; the communications team will say it’s about marketing and social media; and if you ask someone from Silicon Valley, they will see it as all of those things plus different business models and economics, new types of products and services, and disrupting industries.

Although none of these views are wrong, they provide either too narrow or too broad a frame from which to develop a digital strategy.

To do that, you need to start with the question of what benefits do you want to drive from digital.

When you look at what digital has to offer through the ‘how do we drive benefits’ lens, there are three possible strategies:

  1. 1. Digital Interactions — the goal here is to increase customer satisfaction and reduce costs through enabling customers to interact online, anytime, anywhere. It includes enabling online transactions, simpler websites with better information, and using social media.
  2. 2. Process and Experience Improvement — this strategy seeks to simplify processes and improve the customer experience. It is often the next step on from a digital interaction strategy, in that the catalyst may be reaching a stage where the digital front end of the organisation is constrained by process and policy complexity behind the scenes. Its goals are therefore similar to a Digital Interactions strategy — lower cost and greater customer satisfaction — with increased efficiency.
  3. 3. Service Model Transformation — the third strategy is for when radically improved outcomes or radically reduced costs are required. In the public sector, it includes when there is a desire to readdress really difficult policy problems. This strategy is the most far-reaching and includes rethinking services, service delivery models, and/or the supporting organisations or institutions.

As can be seen, the first two strategies are about taking what an existing organisation does and making it better — simpler, easier, and more convenient. The third strategy is more ambitious and more radical. It involves rethinking how to deliver and derive greatly improved outcomes for users of services and the organisation. This is the space in which startups naturally operate, although existing organisations can be and are successful here also.

Of course the third strategy — and digital — is not a silver bullet for difficult problems, but does offer a promising and comprehensive set of tools that can be used — via prototypes and pilots — inexpensively and at low risk.

Technology, data and analytics underlie and are inputs to all of the above strategies, but as inputs, are not strategies on their own. To give an example, identity management is important but does not of itself deliver benefits to users unless it supports a service like applying for a passport or enrolling children in school.

A final point is that all of the above strategies can be the right choice depending on the circumstances — what you are trying to achieve and what mandate for change you have.

Penny Webb-Smart

Written by

design, digital, human behaviour, new ideas, aspires to live up to surname. www.pennywebbsmart.com.au.

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