These are good pre-requisites for rapid growth. But what is a digital business and what are the main technologies thatenable such business?
It is all about Broadband, IoT, Cloud and Mobile Apps
Well let’s start with the technology! What I will describe here is not an official definition but rather a simple view on the main drivers of the digitalization process. For a start I would say the internet, broadband and mobility have made it possible to be connected all the time, but also to connect everything and everywhere. By connecting assets, products and services, we are now creating a new type of internet, where real world objects can be accessed and manipulated in a digital manner; this is referred to as the internet of things. This gives possibilities to communicate in new ways, but also allows things to communicate with each other. This provides us with opportunities to redefine business processes and also to create new value. The cost of managing, analyzing and acting on all the data provided by these things has now also become manageable thanks to cloud technologies. Cloud technology provides memory, compute and storage capabilities at a fraction of the cost of traditional IT systems and gives us scale. Last but not least mobiles devices have become much more than just communication devices, they have become remote controls that allow you in a virtual way to control the physical world.
So in which ways should I leverage these technologies and how are businesses impacted? This is where it often becomes blurry, where Consulting companies and IT Players talk about complex digital transformation or where others limit their views to operational efficiencies and digital marketing only. I will try to give here a simpler definition, which I hope can be used equally for SME’s as well as for larger corporates in order to quickly define a digital strategy. The suggested approach is built around 4 pillars: the digital workplace, the digital customer experience, digital marketing and finally innovation and value creation in a digital world.
The digital workplace
The digital workplace is all about efficiency. I would like to look at this from two or three perspectives. One is that tomorrow’s workforce and company boundaries in general will become much more dynamic and permeable, compared to today. Millenials are more likely to join a company for a key project rather than for a permanent employment. This means that workplaces will need to cater with these new requirements and expectations. You don’t want to invest in heavy IT systems but rather use software-as-a-service model or even consider open-source and license free software for parts of your business.
Secondly you want to make sure you get the best talent to work for you and in a digital world you are no more limited by geography and distance. Employees can work remotely, as long as you provide them with the right tools for collaboration. For SME’s and start-up’s I am thinking about collaboration tools like twillio or evernote just to name a few, but even applications like whatsapps and skype are becoming critical business communication tools. Managing talent in the digital world means also that you can also enable new ways of assessing and learning, peer reviews through social collaboration platforms can become more powerful than traditional performance management tools.
The digital customer experience:
Consumers and customers in general are getting more and more accustomed to get anything at the control of the finger tips. Why? Because whatever the needs, whatever the pain points the consumer journey often starts with a google search or ordering something through a mobile app. Providing a digital customer experience means to support the customer throughoutthe various phases of their journey: from search to evaluating options, purchasing, usage and support. What this means is that you need to think twice on how to engage the customer and also quickly understand their context. Using location, time of day, recent searches, application reporting can all be elements that help you understand the customers context to serve them better. Mobile applications, online portals and marketplaces are all digital means to sell good and services, but it is the context and the way you guide the user toward a relevant choice that will make this experience pleasant. Take Careem for instance, this is a mobile application that will allow you book a taxi ride. In most cases when I look for a taxi, I want it now and I don’t care about the taxi type, right?
So the default option in the application is to ride NOW! So by one click, the YALLA button, I order my taxi, no complicated process. At the same time the application indicates before booking how long it will take for closest taxi to be here. I am more likely to book when it is that simple.
Similarly customer feedback and support can be simplified. Nowadays call Centers are not necessarily efficient ways to get feedback on your product or provide support, social media is getting more and more used to provide support, but also to understand customers through customer sentiment analysis.
As mentioned earlier customers and clients are nowadays doing most of their initial purchasing decisions online. So how to do you make sure people know about your products and services, and how do you make sure they develop a preference for you. I guess there are two ways to look at this. One is what are the mechanisms you put in place for people to find you, and secondly how do you engage in ways so that you create a buzz around your offering. For the first part, social media is proving many digital channels to engage with potential customers. Instagam can for instance provide good ways to describe your portfolio. Facebook pages can be used in similar ways to market your company and offerings. Blogs can be used to attract various types of readers and even youtube or vimeo video content could be created to talk about your brand and solutions.
Different channels can be used, and you need to target the right ones based on your target group, you also need to tag information in the right way, so that your content appears on top of user searches. This is called search engine optimization or SEO. The difficulty for smaller businesses comes from managing multiple channels in a coordinated way, and also how to regularly create new content to attract new users. For the consistency part you can use platforms like buffer or social bro, which would allow you to post content is an automated but controlled way. I also found scoop.it! very valuable for content curation, which allows you to mix personal and third party content in a blog like output.
How continuously create engagement is difficult though, so it might require innovative approaches in what content you decide to create, and you might want to leverage end-users or followers to become advocates for your brand.
Innovation and value creation in a digital world.
Now we are coming to the most critical pillar. In the digital world everybody is at a risk of becoming disrupted very quickly so you need to find ways to continuously innovate to stay at the top, but it also means that anybody could become the next Uber or AirBnB.
So let’s start with these companies and let’s see how they have managed to take over the world. On one side and in both cases you have an asset, which is a taxi or a flat, which is turned into a digital asset, that somebody owns. On the other side you have demand, a consumer, which by being online, becomes a digital consumer. Connecting the digital consumer with the digital asset, suddenly creates a marketplace where the broker can take a commission whithout ever owning any of the assets. This value chain and business model innovation is also strengthened by additional value that is created in the search process. Whether it is location of the Airbnb property, pictures of the flats, peer ratings of the accommodation, price levels, amenities, these are all elements that help in the search process. Similarly the booking process and feedback allows for a very solid customer experience from the initial search to rating your visit. Once you use these type of services they become very sticky. So when trying to innovate you need to leverage the possibilities to digitalize what is not already digitalized, find problems and paint points that can be addressed in new ways. The innovation can be done in multiple ways: in the creation phase you can assess and leverage both internal and external ideas based on a continuous insighting, about technologies, trends and behaviours. Concepts can then be developed where new user experiences and delivery models are explored. Thanks to technologies like cloud, IoT and Mobile Application development, these concepts can quickly be explored, validated and scaled without taking too much risk on the existing business.
Another interesting angle to consider in this innovation process is that of creating value to the end-user, the actual monetization can sometimes be taken as a second step. Take social networks for instance. The size of the community and the reach a community can provide has an intrinsic value, as with twitter for instance. When taking that approach hybrid business models, like the freemium model can be explored. Take Smule for instance. This is an online karaoke application, that is very popular. It leverages on the fact that a lot of people like to sing, but also that all music is today available in digital format.
The user experience and social sharing are nicely implemented since you have good sound quality, nice recording and can share with the community. Now this is where the business model is smart. You provide a few free songs to get users hooked… then you have to pay. But actually, no, the other option is to still continue singing but only the second part of somebody that has paid. By doing that you create connections among users, add virality and ultimately will create an urge for the user to get their own subscription and drive their own popularity.
So where does this leave a startup, an SME or a large corporate? How do youbecome a digital business than can bloom, scale and prosper?
The path toward becoming a true digital business
Now it might not be that easy to find the right starting point, but most important is that the company leadership set an agenda when it comes to some or all of the pillars I mentioned in this article. Most important is probably to have a strong vision to start with on how to continuously innovate and how to manage talent in an optimal way. This is why I believe a company needs to start having a strong position on how to innovate in the digital world and also on how attract and retain talent by providing a digital workplace that leads to agile and lean approach to innovation. The digital customer experience is something that should be developed early on as conceptsare defined, but will most likely follow if there is a strong vision. Digital marketing is also something that is also more likely to follow if the other elements are in place, but it will become increasingly important as you define the true identity of your brand and position your company should take in the market. One thing is sure though, becoming a digital business is not an afterthought, but should be a key preoccupation of any business that doesn’t want to get disrupted.