Growth Through Digital
What is Digital Strategy?
A Digital Strategy is an organisation’s plan to use digital lens and technologies to engage with its customers and manage its operations. It is a way of moving an organisation into the digital age, enabling customer touchpoints to be frequent, fluid and frictionless. Most of all, it is an opportunitity for an organisation to prepare itself to take advantage of the ongoing rapid transformation occuring throughought the economy
An effective Digital Strategy helps an organisation to centre itself on its customers and understand its value to those customers, and how this value can be best delivered through a digital lens.
However, digital strategy is not simply about improving existing processes by adding fresh technology – it is about changing the way you think about your organisation and your customers. It is about making the best use of digital technologies to enable a seamless customer experience that delights your customers.
As an example, banks used to be known for their ability to manage money in the form of cash. People used to go to a bank to make transactions with notes and coins. Today, a bank is a digital box of electronics that provides financial services. Financial services, and the way we navigate around these services, have been re-imagined with a digital lens.
The Need for Change: The Need for a Digital Lens
We are interested here in 2 kinds of change – the change we are subjected to by external circumstances and the change we ourselves directly control, which we call innovation.
Evolutionary theory tells us that survival depends on organisations ability to adapt to change, and given that the rate of change in our world is accelerating, and is certain to accelerate even further, the adaptability of our organisations has never been more crucial. Some of us are averse to change: we might prefer to reject it or pretend it will not affect us. The better approach is to embrace change and ourselves innovate so as to advance the organisation and excite and motivate our staff.
A digital strategy is a key component for embracing change: it is critical that organisations take on a future-focussed digital vision.
Digital strategies are often thought of as simply the adoption and assimilation of new technologies and trends such as artificial intelligence (AI), big data analytics, cloud computing, blockchain, the internet of things (IOT) and machine learning.
It is true that these technologies offer new ways we can live, work and play. But it is critically important to realise that, while technological advances may enable transformation to occur, they should not be the starting point for a digital strategy. The starting point must be to understand the current systems and processes and to re-imagine these with the customer at the centre, employing a digital lens to envisage the solution.
Put simply, it is important to remember that technology is not the end, but the means, of delighting the customer.
Why data drives success
The Data-driven Organisation
The essence of digital transformation is to become a data-driven organization, ensuring that key decisions, actions, and processes are driven by data-derived insights, rather than by biases and guesswork.
Data-driven organisations are organisations that consciously gather the data that will allow them to make evidence based business decisions. They value the data their organisation possesses and are skillfull in analysing it. They understand the importance of data quality and how to manage data risk. They explore new sources of data and integrate data from different systems into their data warehouse. They mine their data for the pure gold of insights and turn those insights into actionable information.
The ability to collect and analyse data from all aspects of business operations will enable organisations to improve decision making, increase efficiency, and reduce costs. Becoming data driven requires a shift in mindset and culture within an organisation away from the traditional modus operandi or the hunches of the most powerful or vocal member of the organisation.
Why Digital Strategy is critical to being customer-centric
Why Digital Strategy is 80% Strategy, 20% Digital
Digital Strategy is a critical component of being Customer Centric. It will enable your organisation to better understand your customers’ needs and wants, and then deliver products and services that meet those needs.
At the core of the strategy is the creation of new and better forms of value. This value does not take the form of revenues or profits, but of value for end customers. Quite simply, your strategy can create market change by progressively optimising the value you provide to your customers.
The starting point in the development of any successful strategy is a clear understanding of the customers needs and experiences. Once you fully understand this, and can re-imagine how value can be delivered with a digital lens, you not only have a well-developed digital strategy, but also a clear roadmap to enhanced customer-centricity.
Digital strategy is a way of looking at the world through a digital lens. This means you look at our customers from a different perspective than before. You see them as people who want to interact with you digitally. You then ask ourselves what this means for your business model.
A common misunderstanding is that it is all about streamlining manual or out-dated processes using technology and IT to make them more efficient, thus saving the organisation money. In other words, 80% digital and 20% strategy.
This cannot be further from the truth. While it is true that a by-product of implementing a digital strategy is cost saving, the essence of a successful strategy, which will unlock growth for your organisation, is to re-imagine how you deliver value to the customer with a digital lens, that is, 80% strategy, and 20% digital
Why it’s Essential
Why You Need a Digital Strategy
The digital world has changed everything from how we communicate to how we consume information and how we make purchases. This means that businesses must adapt to stay relevant and competitive.
A digital strategy will help you understand what your customers want and how they behave both online and offline. It will help you identify new ways to reach out to them. And, simultaneously, it will streamline and optimise every element of the internals of your organisation.
Organisations without a digital strategy lack direction and strategic clarity when they try to adapt and compete in the rapidly changing modern market.
5 Common elements
5 Common Central Elements of a Digital Strategy
We at The Strategy Group have identified five common central elements of a digital strategy as follows:
Digital strategy starts with people, which is a useful reminder that whenever we talk about data — especially valuable data — there are humans at the end of it. For most organizations, the “people aspect” of transformation refers to the access an organisation has to its consumers, clients, and employees. Historically, the interactions in these relationships were not accorded serious attention – either they were not recorded or not carefully considered.
A strong strategy respects the consumers, clients and employees and values the data they provide. It requires a work culture for employees which encourages change, experimentation and flexibility around digital technologies.
Accessible and retrievable records of the interactions which your consumers, employees, and clients have with your organisation, across all mediums, are invaluable resources that a digital transformation strategy provides.
Technology can have its biggest impact — by capturing or creating digital records for people and their interactions with your organisations (for example who they are, how they behave, what they prefer, etc.) Allowing the identification of patterns, the analysis of trends and subsets and the projection/optimisation crucial to planning.
Many of technologies key benefits are not “hard” (i.e., cheaper systems or infrastructure), but “soft” (i.e., capturing valuable data).
The value of data depends on whether we can clean it, refine it and use it to fuel something impactful.
Without a model, a system, a framework, or reliable data science, any data will be useless, just like 0s and 1s.
But with the right expertise and tools, data can be turned into insights. This is where technology gives way to analytics — the science that helps us give meaning to the data. To the degree that we have meaningful insights, a story, a notion of what may be going on and why, or a model, we will be able to test this model through a prediction.
The point here is not to be 100% right, but to find better ways of being wrong, that is, to approximate closer to the truth. All models are wrong to some degree, but some are more useful than others.
The most interesting, captivating, and curious insights will go to waste without a solid plan to turn them into actions.
AI can make predictions, and data can give us insights, making an impact requires actions, and these actions need the relevant skills, processes, and change management.
This is why talent plays such a critical role in unlocking (or indeed blocking) your digital strategy, and is why it is critical that your organisation has a clear and effective framework and process to turn insights into action.
5. Evaluating Results
In the final stage of the process, you can evaluate the results or impact of the actions you take.
The process is iterative, so, truly, there is no final step – the evaluated results are fed back into the data, the results themselves becoming part of the new dataset, which will be augmented and improved with the findings of the process.
Through a retroactive feedback loop, your insights become more predictive, which itself gives more meaning and value to the data.
In the process, you enhance and develop the people skills that are needed to produce greater synergy between humans and technology.
Dealing with the Challenges
Challenges of a Digital Strategy
The biggest challenge in creating and implementing a digital strategy is that many people think they know what digital means, but in fact don’t really understand it. This leads to misunderstandings of what the strategy should actually involve. For example, some companies believe that ‘digital’ means using social media to promote products. Others think that ‘digital” means using online marketing tools like Google Ads. These are both wrong.
A key challenge in becoming a data driven organisation, which is essential to any digital strategy, is the ability to collect and analyse data from every part of the business. Organisations may need help to set up data gathering processes that permeate their future.
Other challenges include “naysayers” – those who question why change is needed and the status-quo cannot prevail. The reality is that organisations that have transformation efforts impeded by naysayers will ultimately shrivel and die – the pace of competition and the high-level of customer expectations are just too overwhelming to accommodate those who are slow moving and unable to accept change. This is why ‘people’ is a critical element of any successful strategy – to grow and implement the strategy, an organisation needs a culture which is not only accepting of change but in fact embraces it at every level.
Creating A Digital Strategy
How to create a digital strategy?
The creation of a digital strategy needs to be a deliberate, iterative process that is driven by research (both qualitative and quantitative). Successful organisations will invest in their strategy by ensuring there is ‘buy in’ across the organisation, that there is a clear creation process, and that the process is facilitated by experienced digital strategy specialists.
The Strategy Group uses a myriad of tools to enable the creation of a digital strategy including design thinking, empathic interviewing, detailed journey mapping, ideation, re-imagination workshops, and our own proprietary digital readiness assessment diagnostics.
Who should be in charge of the digital strategy?
The CEO is responsible for setting the strategic direction of the company, but it is important to understand that this role does not mean he/she has to be the one doing all the “digital stuff”. A senior executive who understands the digital landscape and what needs to change may be deputised to guide your team through the process.
However, the ideal person is not the CIO, or someone who has a technology background. Digital strategy is not an initiative lead by technology. It should be led by a CTO – Chief Transformation Officer – someone who is capable of leading the transformation journey, someone for whom customer centricity is key and someone with passion for bringing all stakeholders in the organisation along for that journey.
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Why The Strategy Group
should be your strategy partner
We will work with you to design and support implementation of a strategy for your business unit, for your entire organisation, or for any segment of your organisation where a fresh approach will add value.
We will use a combination of globally-recognised leading-edge processes, coupled with our proprietary validated toolbox to develop a bespoke, customised strategy, which we can assist you in implementing, that will deliver tangible impact and value to your organisation, employees and customers.
We have been designing and implementing strategy solutions since 2003 and we have the expertise and the experience not only to deliver, but to overdeliver.