With digital now shorthand for many aspects of what is becoming a mainstream movement across the spectrum of industry and the public sector, business is changing fast.
The world of business, in particular, is resolving into two camps: Those with digital technology in their DNA and those threatened by digital competitors.
Those with ‘digital DNA’ are aggressively disrupting traditional industries and business models – from banking and retail to transport and accommodation. They focus on owning the interface and redefining the customer experience – using applications and data to change the way customers interact with a service or product.
Along the way, they are transforming the cost of doing business. Starting with digitally enabled business processes and using them to scale their organisations, means they can serve more customers and geographies – and generate more revenues than non-digital businesses could achieve without massive infrastructure investment.
Given the massive rewards that can be reaped, it’s no great surprise to see Fintech, Healthtech, Edtech, Energytech, Drivertech and all manner of other xtech companies springing up around the world.
The organisations threatened by these new digital competitors, meanwhile, are now scrambling to find the digital services and applications that will disrupt and transform their own industry, existing business model or business processes. They are seeking to create new products, customer experiences and revenue streams, while operating their organisations at lower costs – ultimately to create more profit or consume less tax-payer resources.
Digital innovation is, however, far more challenging for existing organisations of scale than it is for a startup.
These traditional businesses are built on decades of investment in people, processes and technology, all of which define how the organisation works. Digital innovation, then, must be supported by a modernisation of skills, processes and platforms. From the technology that underpins current IT delivery, to the core business processes, and in many cases the underlying culture of those organisations.
Quite simply, ‘going digital’ doesn’t simply mean developing a new mobile app and presenting it to your existing customers. A retail bank or government service moving online or mobile, must also modernise the processes, systems, platforms and operations that make these new experiences reliable, scalable and secure. New digital on old business processes, technology or operational models simply isn’t going to work.
In many cases, that transformation starts with organisational change. For instance, many businesses are hiring Chief Digital Officers or Chief Data Officers to drive digital and data innovation, and most now see line of business executives driving their own digital innovation projects.
These new digital leaders are already driving big change – they are creating a new dynamic and taking more ownership for defining, buying and paying for many existing and a growing new range of IT services.
We’ll look in detail at exactly how they are changing business through digital enablement in part two of this series.