DIGITAL BUSINESSES: ARE YOU IN OR OUT?
It is suggested that, by 2020 more than seven billion people & businesses and at least 30 billion devices will be connected to the internet. With that in mind we could eventually call it the world of digital business world with people, businesses and things communicating, transacting and negotiating with each other.
Think different here people what makes digital business quite different from the e-business we know is the presence and integration of things in it through non linear connection and intelligence with people and business. What we should relatively understand is that this could incorporate greater intelligence and sensors into jet aircraft engines to improve passenger jet performance and even reduce the need for maintenance.
In a retail digital business we could involve the provision of retail fashion customers a world with seamless integration between digital and physical that integrates the boundaries between both. Just think about it a customer could enter a store , try on a coat and the store system would know about it. They would then easily project an image of the buyer on a screen with the coat on and propose some accessories or alternatives that would go well with a set of new clothing, all the time taking into consideration any price limits suggested by the customer in the purchase process.
People should stop confusing the Internet of Things with digital business. IoT however plays a very important part in the digital business. Remember that IoT by Gartner is the network of physical objects that contain embedded technology to communicate and interact with their internal state or the external environment. So running it down, digital business is about the creation of new business designs by blurring the physical and digital world and more about the interaction and negotiations between the business and things.
Furthermore, remember that it is when things starts to negotiate amongst themselves as well as people and business that we can start to see how we can enter an entirely new disruptive world.
I personally believe that the digital business will disrupt all industries and business executives in the longer run. However, we need to be disruptive in our minds itself and see things differently and be able to adapt to the environment and the technology is already here for this. We need to be able to accept that the world as we knew it is no more and very much out phased and obsolete and a should start to see things differently and grasp and start to visualize the new opportunities that is at bay. Businesses need to start seeing a world which is different and understand the real digital industrial economy now and build for the new era.
I believe profoundly that the real success and successful business leaders will be the ones who will eventually develop the digital leadership and technology capabilities. In essence the reality is that by 2020 we may need to understand that digital leadership will be a must and inert knowledge for all business leaders at par with other executive skills such as finance. From my take this is how the future is looking like. It is not what we may have believed in the 80’s that by year 2000 we would have flying cars etc., like the movie “Back to the future”.
Looking back at a reality which is very much part of our current one, we need to understand that while most digital evolutions are looked upon from a technology- and company-centric perspective, often leading to disconnected business strategies, it’s important to cut through the noise and buzzwords of the day, put them in context and focus on the real questions: how to improve your efficiency, business and the lives of the people in the ecosystem you operate in.
Digital business goes beyond social business and certainly beyond marketing or ICT. It’s about business and people, or as said: about experiences. And those experiences are shaped, among others, by having the proper information, resources, tools and much more, to allow choice and a partial/gradual shift of control. The “i”” of IT (information) plays a key role in it, as does the context within which it resides.
The real reason why integrated marketing is important, for instance, is not (just) because it enables marketers to have a unified customer view. It’s because customers don’t want to be treated differently, depending on why, how and where they interact with your business. They don’t want to see the organizational silos and disconnected systems, leading to poor customer experiences. They want the right information at the right time etc. The same is happening in IT, for instance, where we see customer experiences (with the customer being also employees, for instance) pop up as a parameter for success (also in enterprise applications). It’s about measuring value through what you do is valued.
Digital business is also about YOUR people and processes. Because a connected digital business approach, across all functions, and a connected interaction with the ecosystem of your business can only happen if they are connecting the value dots and docs well, regardless of job function. And sometimes can disconnect. That mix is the challenge we all face in an age of digital business.
Bear in mind that, Digital business is not just about technology, disruption or even business in the strict sense. Technology is not a holy grail. What matters is how digital technologies impact business in real life because they impact the behavior and attitudes of people across all their activities. Just consider how organizations, executives, teams and people use them to improve the ways they serve their customers, collaborate and operate. Value.
Digital business is business with a people-centric view and agile processes, whereby digital technology is used to enable people (customers, employees, managers, etc.) to succeed, optimize all business functions and make your business more relevant and profitable. Value. It does this in the increasingly connected ecosystem in which organizations and people live and work. The CIO, CMO will need to learn from each other and not understanding the role of digital and how it is used by customer, employees and other stakeholders is not an option for any C-level exec anymore. You can’t “manage” a business or business function without missing competitive benefits if you don’t understand the digital reality and its’ impact on customer experiences in the broadest sense.
The aspect such as the People-centricity and humanization sometimes means disconnecting from efficiency and technology as well. We can optimize and improve everything. Efficiency, productivity, profit, customer experiences, the ways we work and collaborate, but in the end, nothing works when we ignore that human element. We are not robots, we cannot always focus on being more productive, collaborative and connected. We need the conditions, space and environment in which our freedom and creativity can be nurtured and cultivated. We cannot do business if we cannot be “human” and inefficient at time.
Digital Strategy foreruns Competitive Advantage
Digital strategy is the process of identifying, articulating and executing on digital opportunities that will increase your organization’s competitive advantage.
Of course, it’s easier said than done! The introduction of cloud computing, or more specifically the rise of the Software-as-a-Service (SaaS) delivery model, means that when it comes to internal processes –everything from accounting, email, and resourcing through to social media monitoring – businesses now have a vast choice over which applications they deploy. The flexibility of SaaS means that organisations can make application decisions on a monthly basis, changing to a new system with ease.
Purchasing power has also shifted: IT is no longer the sole force in driving technology change. In fact, in many organisations it has been forced into a reactive position, with individual departments such as marketing or finance calling the shots as to which applications they feel best suit their individual needs.
The ubiquity of SaaS applications and the ease at which they can purchased (a lack of CapEx means that business departments can be run on a credit card) has transformed enterprise IT –leaving it as an interchangeable patchwork of apps from numerous, distinct vendors.
For CIOs and the IT department this presents a significant problem. Increasing the complexity of the IT estate means more time and resource is spent in simply maintaining the system. While the application layer may work as patchwork, running the underlying infrastructure in this way is inefficient, dangerous and leaves the organisation at risk of outages. Businesses need a single platform which is flexible enough to cope with an ever-changing workload while being reliable and resilient to ensure all-time availability.
By outsourcing IT infrastructure, businesses can re-focus their IT departments, allowing them to have a more significant impact on revenue-generating activities. The CIO, relieved of worries over server maintenance, can now add both budget and strategic thought to improving the unique selling points of the business and differentiating from rivals. This could be anything from developing a social media analytics team, to developing a new, multi language, multi currency commerce platform.
What a business means when its says it has a ‘digital strategy’ therefore depends on whether they are trailling the pack, engaged in the present, or looking to the future.
Businesses have had a decade and a half of packaged innovation. They’ve just said to the IT suppliers, sell me the next thing I need to install to upgrade my business, whether it’s supply chain optimisation or customer relationship management. But that’s finished – there’s nothing left to sell at that level.
“Now businesses have to invent their own future.”
Sectors like music retailing, consumer-electronics retailing, airlines, and hotels have seen their business and operating models permanently changed. They have experienced the “double whammy” of digital enabling very different sales trajectories and altering cost structures. For instance, digital sales for music retailing and consumer-electronics retailing is expected to exceed two-thirds of these two industries’ total sales in five years’ time. On the cost side, fundamentally different expense structures have emerged. For example, iTunes has no physical distribution, and even asset-heavy industries such as airlines are using automation to cut customer-interaction costs (for example, with e-check-in and automated departure gates). These industries will need to pursue automation in new areas; for instance, companies can leverage big-data analytics to boost supply-chain efficiency and improve asset utilization (through smarter maintenance scheduling, for example). Companies in this cluster that succeed will be those that recognize the long-term trajectory of their current model and make bold bets to reshape themselves accordingly. Given the typically thin margins in these industries, even reducing costs by a few percent will translate into significant bottom-line impact.
The clear message is that companies need to fully embrace digital but should do so in line with their own unique opportunity. Why build a gleaming digital empire if more targeted improvements will suffice? Conversely, why dabble with small-ticket experiments when the value at stake can radically transform your bottom line? To assess and act on the digital-transformation opportunity.
Capturing the value of digital transformation will be important in most industries—and critical for survival in some. Business leaders must assess their own company’s value at stake, invest proportionally to address key opportunities and risks, and keep in mind that the greatest digital value may reside beyond their customer-facing functions.
The potential impact of digital technology varies widely by industry, but most enterprise leaders share an important challenge: how to get beyond the small share of the prize they are capturing today by looking for impact across the whole value chain.
Still, digital business remains about business and about what Gartner says: convergence and disrupting – or maybe better: transforming, changing, adaptive and more and more indeed truly disruptive – business models.
So bottom line is that whether you are looking at being able to be disrupted and be disruptive. How much rethinking are you able to lay down for grasping what’s at your doorsteps. Why copy what others are doing when you can use the bits that you have and innovate or make it better. I have never personally believed in copying others models but surely they act as eye opener and like it or not you should never copy if you want to make that impact.
N.B: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of the African Academic Network on Internet Policy.