The era of Digital Darwinism is upon us. Businesses have no choice but to adopt digital technologies or disappear. Traditional businesses which do not leverage digital technologies risk becoming irrelevant or losing business to native digital companies which understand technology better. The good news is that most companies realize the importance of digital. However, the not so good news is that many still approach digital as “nice” or “cool to have” rather than treating it as an important aspect for business. Digital is no longer good to have: either be digital or be extinct – there is simply no other option.
Most businesses realize this today and strive for a footprint in the digital world. Many have refreshed their web presence, are taking orders online, creating mobile apps, running social media campaigns, etc. to reach their customers. Several banks have mobile apps which enable remote deposit of checks and online transactions; retailers have mobile apps for online ordering and tracking etc.; and utilities companies have mobile web presence for bill payments and customer engagements. While these are laudable initiatives, the digital customer or user experience is just the starting point of the digital journey and not the end game. An effective digital enterprise is one that integrates front-end digital customer/user experience with the system integration value chain and brings the entire organization onto an integrated digital platform. True digital integration is as much about middle- and back-office system integration as it is about front-end systems. It not only enables a seamless and consistent customer experience across all touch points but also creates significant supply chain efficiencies and unlocks the true potential of data analytics.
Highly successful native digital companies such as Uber, Airbnb, Netflix, Facebook, etc. have been built with true digital system integration that spans the entire value continuum, and not just the front-end apps. This is what makes them successful. For example, Uber has effectively leveraged Google Maps and online payment systems to create a frictionless experience for the taxi business and eliminated two major inconveniences – the unpredictability of hailing a taxi and the payment after a ride. It has also efficiently integrated engagement with its drivers, their onboarding and settlement, etc. on a weekly basis. For digitalized businesses, their mobile presence is just the beginning. Their true strengths come from the digitally integrated value chains that allow them to predict and respond to market changes.
Traditional enterprises which are being reincarnated as digital have decades of existing systems and processes which need to be digitalized and integrated into the value chain before impacting the customer/user experience. When a customer deposits a check using a bank’s mobile app, the initial convenience of remote deposit fades if the funds are not credited within a day. Sometimes, due to integration issues between the front-end and back-end systems, it can take 3-5 days before a check is credited and the funds become available. The financial world is preparing for crypto currencies, messenger-based payment systems, instant mobile payments, etc. Digital will impact the entire financial value chain. Native born digital companies have created massive disruption in every industry and have also forced traditional enterprises to become more agile, effective and market relevant.
Digital transformation for traditional enterprises must have CEO sponsorship, talent, collaboration across multiple business units and relentless user (internal and external) centricity. Several companies have created an exclusive digital centric team anchored by the Chief Digital Officer (CDO). CDOs have the mandate to architect an enterprise wide digital strategy, manage the implementation and drive business results in collaboration with the business units. Since technology is the biggest competitive advantage and a major ally in the digital pursuits, relevant partnerships with platform, software, digital solutions and services companies are important elements which can be leveraged well by enterprises.
Digitalization is a marathon and not a sprint. Design thinking, platform development and support, global launches, business units, partner and eco-system integration, digital run, operations and continuous improvement, etc. are key components of any successful digital enterprise. Security enabled technologies are essential for the long term success of digital programs. The ever-expanding global internet penetration, new platform and technologies, mobile and wearable devices, industrial and consumer IoT, cloud, analytics and big data, social collaboration, etc. will accelerate digital adoption across the globe and impact all industries. All businesses must fast become digital-led. Either be digital or be extinct. Digital is the new D – Darwin.