Let’s start with a definition of Digital Strategy. Essentially a Digital Strategy is a plan for optimising the business benefits of the organisation’s data and technology-focused initiatives aligned to (and often disrupts) the overall business strategy.
“Do I need a Digital Strategy?” this is a common question raised by clients, in particular those who are considering digital transformation.
Digital transformation often drives change across the organisation’s business model, processes and its staff, partner and customer experience. Digital transformation requires coordination across the entire organisation and involves cultural changes.
Digital Strategy, on the other hand, focuses on technology, not culture. Digital Strategy is most relevant to changes in business models and uses technology to create the capabilities a business needs to become a digital business.
Developing a Digital Strategy is a key component that informs digital transformation and ensures that technology is being implemented in a way that supports the business objectives. Harvard Business Review published an article titled “Don’t Draft a Digital Strategy Just Because Everyone Else Is” that suggests consideration of the five following practical questions around digital technology — which encompass both new technology tools, platforms, and the use of the data:
- Does digital technology change the businesses you should be in?
- How could digital technology improve the way you add value to the businesses you are in?
- Could digital technology change your target customer?
- Does digital technology affect the value proposition to your target customer?
- How can digital technology enhance the enterprise capabilities that differentiate you from your competition?
It would be unusual to find a business today that has not already begun to implement some form of digital technology. For some, these investments are tactical, point solutions because they did not address changes to the business model. These businesses suffer from a patchwork of siloed solutions held together by inefficient and often manual processes and tactics that have been implemented in response to digitisation.
Innovative business models are emerging. Digitisation is enabling new, disruptive business models that aggressively compete with legacy models, putting pressure on traditional business revenue and profit growth. Completely new industries are forming as many traditional one’s struggle or fail.
Regardless of industry or the size of the business, it is critical to integrate digital into the big picture strategy – transforming the business with a business model that encompasses digital across the business.
A Digital Strategy is much wider than just IT as it involves the business as a whole. It is critical to fully engage business users in the development, implementation and use of a Digital Strategy. Merging digital technology and operational business practices fosters efficiency, productivity and an improved experience for staff, suppliers and customers.
Depending on the appetite for chance, organisations tend to take two main approach to developing their Digital Strategy.
- A solid Digital Strategy will focus on using technology to improve business performance, whether that means creating new products or services or simply reimagining current processes.
- Whereas a bold Digital Strategy allows a business to prepare itself for success with a business model that provides the opportunity to meet challenges.
Innovation to enable a digital business begins with people and seeks to create a business model with optimal processes to support customers, suppliers and staff. Because this is new, it's often not possible to simply copy "best practices" or ask for "requirements," since neither exists. This is where techniques such as Design Thinking come in.
Design thinking is a powerful approach for anticipating business needs through a set of methods to develop empathy and a deep understanding of what people are faced with. The approach provides the possibility to view situations through a more holistic lens, offering insights into what strategic moves could make sense.
A Digital Strategy needs a clear roadmap to succeed. Avoid creating lofty statements of objectives with no clear avenue for actual execution. Apply agile delivery approaches to design and deliver the Digital Strategy – look for incremental and regularly-delivered value and continue to validate against the business model and strategic objectives.
Discover more about finding the right Digital Strategy for your business. Contact MOQdigital today.
- Written by: Jacob Formann Principal Consultant, Business Services at MOQdigital