Digital – An opportunity to build strategic competitive advantage
Most companies have used digital for operational improvements (cheaper marketing, cheaper customer support etc.) and for keeping up with the trends (we need to have an online presence on Twitter). This is old hat; nothing new here. While this is obviously useful and required, I would argue that this piecemeal approach is missing the bigger system view & opportunity. How so?
Digital is not just another technology. Mobile is changing what information people have at what time. Unlimited data is changing the power relationship of information. Social has changed the behavior of how people get recommendations. Location based services have upended the power relationship that companies used to enjoy. The traditional approach of treating digital initiatives as a one off is missing the handoffs that need to happen between functional areas and the opportunity of using analytics to dramatically change things. Fiddling at the edges is not going to work.
Companies have a narrow window of opportunity to develop sustained strategic advantage by moving quickly and doing digital holistically. Smarter companies are starting to step back and envision what a truly digital enabled “next generation” company would look like? I.e. if we were to build a company to have digital in its DNA, what would that look like?
- HR – What if we could increase the quality of our hires and reduce churn tenfold? Better analytics and social can do this
- Facilities – What if we could cut our facilities spend by half? We can through better analytics about what is used when and by sharing with (gasp) other companies.
- IT – What if we could switch the traditional 80/20 operational vs. strategic spend on its head? We can through cloud and outsourcing.
- Sales & Marketing – What if we could reduce our sales & marketing by half, yet increase our effectiveness? We can by re-examining the traditional sales & marketing funnels.
- Product & services – What if we could create new service / produce lines without large scale capital expenditure? We can through better use of data & collaboration.
I see smarter companies starting to think about how they could be re-wired and the implications for each functional area & overall company strategy. More on this in subsequent postings.