Six Steps To Build A Successful Digital Business
Digital business is changing the role of technology from a supporting player to a leading player in innovation, revenue and market growth. However, digital business should not be considered an IT program and should instead become an enterprise mindset and lingua franca, with digital expertise spread across the enterprise and value ecosystem, says research firm Gartner.
Gartner has identified six crucial steps that will enable CIOs and other business leaders to build a successful digital enterprise.
Step 1: Create the Right Mindset
Digital business is not just about expanding the use of technology. Digital business leaders must think about technology in a fundamentally different way than in the past. A more proactive model focuses on creative disruption and new business models to gain competitive advantage. CIOs need to rethink the role they play in a value stream and illustrate a wide variety of possibilities and players and help companies envision and design new businesses that integrate people, businesses and things to do things that were not possible five years ago, says Ken McGee, vice president and Gartner Fellow. The hallmark of a digital business will be the ability to spot these opportunities, however fleeting, says McGee.
Step 2: Put the Right Leaders in Place
The fast-moving digital world is exposing gaps in digital leadership, especially with regard to front office disciplines (those related to the customer experience) and head-office disciplines (those related to enterprise strategy). While titles such as digital strategist, digital leader etc are currently on, they are a part of the title chief digital officer (CDO). Some CIOs also play the digital strategist role already.
These roles are likely to be around for the next five to 10 years, but are really just interim positions, says Gartner. This is because digital will simply become a part of the way we do everything soon, making a single, separate role dedicated to digital initiatives inappropriate, if not impossible. More generally, there will be significant innovation in the way businesses are managed and led in the next decade or two. While three discrete roles are optimal, one person could play multiple roles, and the people fulfilling these roles could also have other responsibilities.
Step 3: Launch a Digital Business Center of Excellence
Create a digital business center of excellence (COE) to provide input, advice and opportunities for the collaborative formation of a digital strategy and the collaborative advice, innovations and capabilities needed for execution.
McGee believes organizations should engage people from throughout the enterprise and, more importantly, from outside the enterprise and industry, such as current and potential users, as well as recognized and unrecognized thinkers, both associated with and orthogonal to the focus of your enterprise’s main vision. Assessing opportunities and especially threats start with identifying what you have not yet thought about — a task that requires requisite variety to ask new questions and suggest new ways of thinking about the issues such as via co-creation and crowdsourcing.”
Step 4: Formulate a Digital Strategy to Respond to Opportunities and Threats
Once the necessity of a digital strategy has been established, the following five elements must be addressed:
New Digitally Enabled Business Models: Creating new business models will become an almost automatic default position of a digital business strategy.
The Product and Service Portfolio: In an increasingly digital world, products and services can be virtual, with no physical presence.
Information as an Asset: Information, and its effective use, has become a strategic asset and a competitive advantage to the digital businesses best able to exploit it.
Technology: While SMAC (social mobile, analytics and cloud) technologies are the order of the day, evolving and implementing an effective technology strategy are more complex than ever before.
Content, Media and Channels: A successful digital business strategy critically depends on understanding customers’ preferences for channels, the segmentation, and the possibilities associated with each instance.
Step 5: Develop Digital Business Skills and Roles
Digital business combines the expertise, skills and roles found not just in IT, but across the enterprise. Digital business is not an IT program but an enterprise mindset. While digital business has roots in digital technology, it is ultimately about business. Decision making will be owned, operated and potentially influenced by the relationship between CIOs and business leaders.
In another recent survey Gartner however noted that 44% IT organization said they did not have the right skills and capabilities in place to meet upcoming digital business challenges. As digital business picks up speed, CIOs, HR executives and other business leaders must re-imagine their quest for talent, emphasizing new approaches that accelerate and widen access to talented people while minimizing the bottlenecks of traditional serial processes, says the analyst firm.
Step 6: Create New Digital Business Capabilities
With the expectation that digital business expertise will spread around businesses within two or three years, but the acknowledgment by many that their workforce is unprepared and inadequate, organizations will need to explore the kind of disciplines needed to drive digital business initiatives.
“Traditional recruitment practices will not suffice. Instead, organizations should consider launching boot camps and other learning programs about digital business across all areas of the business,” says McGee adding that companies should mine informal networks and investigate “work mashups” by applying digital technologies to the distribution of work and look at piloting new channels for finding, building and acquiring digital business capabilities.
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