Digital Strategy 2020 vision, using Digital to do Service Delivery Better
Digital Strategy is a business answer to a digital question. “How should our business evolve to survive and thrive in an increasingly digital world?
The Digital Strategy is not a separate strategy, but instead a lens on business strategy. The Business Strategy should be reviewed in light of Digital Strategy considerations, and these considerations used to leverage business operations today, and into the future.
It is important not to confuse the Digital Strategy with the IT/IS Strategy. The Digital Strategy lays out how a Business can meet today’s and tomorrow’s customer expectations for information and product delivery, but the IT/IS Strategy defines the specific key technological, staffing and process implementations in order to support the Digital Strategy vision.
Digital customers expect control over what and how they buy, as well as what value they receive for their money. They are empowered by technology, and have the ability to affect price, critique and buy anywhere. This relationship of customer control, technology and consumerism is called the “Nexus of Forces”.
The traditional view of a customer as a simple consumer is no longer valid – it is important to recognise that in the digital age, interoperability becomes the key to offering exceptional customer value. As such, customers are evolving to include downstream service providers, appliances, intelligent personal devices and ‘things’.
It is possible to draw parallels between our current position and our future if there is no change to our strategic objectives in the near term. Our current model relies on a number of competitive pillars that have proved impotent when faced with competitors who use digital to do business better:
1. Brick-and-Mortar divisions with a flexible digital competitor
a. Blockbuster had a unrivaled retail presence that did not address a flexible, rapidly changing digital competitor (Netflix) and is no longer a viable business for the long term b. HMV, Tower Records, and Virgin Records no longer exist due to market share erosion from digital competitors iTunes and Pandora
2. Household names with a digital competitor offering superior value
a. Weight Watchers are now a distant second in market penetration compared to brands such as Fitbit, Garmin and Apple b. Flight Centre and Student Flights are no longer the first port of call to search for best value flights - Kayak.com, Expedia and Webjet are now the leading brands due to better digital models.
3. Monopolies protected by government or other forces
a. Taxi Services are being challenged by web incumbent Uber b. Hotels are being challenged by crowd-provider AirBNB
Every industry faces these online challenges (known as digital disruptors). Deloitte’s Digital Disruption Map (2012) put us in the highest risk, biggest impact sector – the “short fuse – big bang”. Businesses in this sector have a low barrier to entry and allow competitors to deal large amounts of damage to the status quo. Should a serious challenger arise, it would take only a short term and relatively small investment for them to capture a significant share of our current customer base.
Digital Disruption and implementation of our Digital Customer Led Strategy
Like most agencies and organisations in the world, we too are facing difficult challenges. How could a highly traditional service and governance organisation remain relevant and provide a satisfying, rich customer experience? Staying traditional – but pushing the envelope towards digital disruption, and implementing the digital strategy presented a unique set of challenges which needed to be met:
1. What were the major obstacles with implementing a digital strategy in a slow-adopter environment? 2. Why were stakeholder engagement and outcomes-driven discussions necessary for implementing the digital strategy? 3. What are the main structural elements for a successful digital strategy implementation?
1. Implementing a digital strategy in a slow-adopter environment:
Change the language: objective-based to outcome-based. Every coach knows that plans are only good until kick-off. Have a plan, but emphasize what you learn. It’s not about sticking to the plan, it is about;
- it’s about what we will learn about the customer
- it’s about what how we can evolve the product
People understand Action Plans: Step by step action list is easier to understand than essays or abstract concepts
- Get going and prove what you’re saying – until you do so, it’s all hot air
- Do as little as possible to prove you’re right.. or wrong – data doesn’t lie
Navigate the Corporate Wheel of death: identify stakeholders on interest vs. power and always manage them accordingly;
- Uninterested Stakeholders with Low Power – let them lie
- Interested Stakeholders with Low Power - keep them informed
- Uninterested Stakeholders with High Power – demonstrate the benefits
- Interested Stakeholders with High Power – help them drive
2. Why are stakeholder engagement and outcomes-driven discussions necessary for implementing the digital strategy?
- It’s a new thing: It’s hard for people to understand benefits if they don’t know how things will work
- It’s new to you too!: It’s not about being right, it’s about doing the right thing for the customer. Being wrong and stopping it before it goes further is a great outcome too!
3. What are the main structural elements for a successful digital strategy implementation?
The Customer: If you don’t have a customer, you don’t have reasons to exist = the customer is all. To keep our customers happy, we need to know the customer.
- Measure everything: Until you can prove it, it’s all hot air
- Test everything: Until you know it’s better, it’s all the same
- Build a solid foundation: Check that old assumptions are true before you build new experiences on top.
Ship it: If your customer isn’t using it, it’s worth nothing to you.
- Small evolutions beat big revolutions: The sooner you can get something out there, the quicker you can collect data
- Just enough to make the customer happy: No one remembers the perfect product that didn’t ship – everyone remembers the great product that did.
- Leverage technologies and processes for speed: The slower you are, the bigger the gap you will have.