Confused and overwhelmed by all the digital terms being shoved at you? Let’s start with those that are relevant to your organization first – digital strategy and digital transformation.
These latest buzzwords have been used interchangeably that the essence of each phrase has been diluted. As an organization set on going digital, you must know the distinctions between these two.
Digital transformation refers to the transformation of an organization’s mindset and culture to go digital. It drives changes in 3 main areas of customer experiences, operational processes, and business models with the end game of gaining competitive advantages.
This mindset change has to be done in a top-down approach as it requires coordination across the entire organization in adopting new technologies.
While digital transformation is all about culture, digital strategy focuses on technology.
With a growing number of operations and business processes being digitalized today, it’s only logical to model your business strategy around digital technologies. The ultimate goal here is to create business capabilities that set you apart from competitors.
And what motivates an organization to embrace digital transformation and build digital strategy?
To leverage technology to create new values in business models, core operations and customer experiences – essentially morphing into a digital business. And this is the edge it needs to go up against other competitors.
How does one start addressing digital strategy? For starters, keep in mind that the fundamental layer of digital strategy is your basic business models.
This is where you examine the weak links within your business models and determine if they can be fixed by digital solutions or by simply employing non-technological methods. It’s easy to get carried away thinking that digital is a goal when you should treat it as a tool.
Your people are your most valuable asset. Get them on board to support your digital strategy and the ensuing initiatives.
According to 2019’s employee engagement statistics, organizations with high employee engagement outperform those with low employee engagement by 202%. One of the factors that contributes to high employee engagement is alignment with company goals.
There is no harm in having frequent engagement with your employees to ensure that they feel included and get them on the same page.
To develop your digital capabilities, upskilling your people and hiring relevant talents should be high on your agenda.
According to TalentLMS, 80% of employees say that upskilling/reskilling training has boosted their confidence. It went on to state that 66% of employees ranked the joy of learning new things and developing new skills as the top upskilling motivator.
So, take advantage of your people’s natural propensity towards learning new skills to define and harness your digital strategy.
Also read: Future of Supply Chain Management and What Trends for 2021?
Your digital strategy should take into account the revamp of your internal processes and operations. In particular, how does going digital help your people to streamline, simplify, and automate operations?
It’s also worth looking into integrating processes that work in silos so that you eliminate double work and get things done faster.
Be aware that digitalizing all your processes without conducting objective assessments of the processes involved could backfire. To illustrate this, let’s take a look at a company that decided to put all its HR transactions online.
In terms of leave applications, they neglected to acknowledge that getting manager approvals in the form of their signatures isstill embedded within the process.
Imagine having to chase your Immediate Manager who is rarely seen in the office to sign your leave application that you’ve entered online!
Yes, it’s THAT counter-intuitive, not to mention, an utter waste of employees’ time and resources. So, all this hassle can just be avoided through the proper execution of revisiting and assessing processes.
Platforms are where all the digitalized operations and processes take place. They can be anything depending on your core business operations from supply chain management, data analytics to customer information systems.
A lot of organizations are moving their data centers to the cloud. Instead of jumping on the bandwagon, ask the question: What is your company’s motivation to move to the cloud?
If it’s indeed to cut costs and manage expenditures better, then yes, having a cloud platform is one of the tools to achieve this. The key here is not to let the platforms dictate your goal, instead, let your goal dictates which platforms you should capitalize on.
In this regard, it makes sense to define an IT strategy that supports your digital strategy so that you have a tech-driven view and assessment in determining which platforms and technologies to invest in.
Both IT and business people need to put their heads together to work out the right mix of business processes that can be supported by digital platforms to ensure efficient and results-driven operations in a seamlessly integrated ecosystem.
If your digital strategy does not involve enhancing positive customer experiences and growing new customer base, you’re practically leaving money on the table for your competitors to take it.
As more and more customers are going online to learn about products, check product reviews and compare with other brands, a solid online presence is important that encompasses marketing and advertising, sales channels and personalized customer interactions.
Although you may not be selling tech products, your digital strategy could enable having products meant to attract new customers such as responsive websites, mobile apps, and augmented VR experiences. The end game still boils down to customer conversion.
Be careful not to get carried away with all the available social media platforms and online marketplaces.
You could risk blowing your budget advertising your products in all those platforms only to find that your target customers are not there. So, it’s wise to include identifying your target market first in defining your digital strategy.
You can check out this article on ways to know your customers better.
5) Demand and Supply Chain
If you’re having a hard time managing your network of suppliers, digitalizing the overall procure to pay chain should be part of the strategy.
While you’re at it, look into automating the vendor selection and performance processes too. This way, you have visibility on your procurement spend across the value chain along with accurate insights on vendor performance.
You can look for opportunities to drive down costs and retain high-performing suppliers.
In cases where you need to manage your inventory right from order processing to shipment, a digital strategy should have the aim to increase efficiency, decrease waste and eliminate human-related errors, taking into account the fact that your customers dictate the demand.
Eventually, it’s in your best interest to ensure that customers benefit from the automation of demand-driven supply chain.
Leadership should be at the top of the list. But it would’ve dawned on you by now that an influential leadership with masterful orchestrating abilities is needed to drive this transformation and the efforts mentioned above.
Usually, a CEO or a designated Chief Digital Officer is at the helm. Their role is paramount in exerting their influences to get full buy-in from their people because let’s face it, with the organizational change, comes hard work and long hours.
This brand of leadership should also walk the talk and be more hands-on to inspire their people in facing this paradigm shift.
Also read: Importance of Supply Chain Management
Like crafting a masterpiece, the journey to becoming a fully digital business takes time. It’s prudent to take a measured approach and not implement all your initiatives concurrently. Start with what matters first.
If your internal operations have been working in silos on unsupported legacy systems, maybe it makes sense to start from there. Then, you can focus on initiatives to digitalize your customer experiences.
There is no one-size-fits-all digital strategy. You can have a look at how other companies do it, but at the end of the day, it should be customized according to your organization’s needs and future directions.
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