Going digital with a clear destination

MUCH has been said - by analysts, consultancies and the media - about the "digital revolution" and its impact on business, but little is heard from the workplace, from business managers grappling with the new realities brought about by digital on a day-to-day basis. To uncover the truths we initiated a study to examine the reality of digital in today's workplace. Our aim was to understand the implication of digital technologies for companies, how it is being incorporated into organisations, what managers and their boards expect of digital, and how it is truly changing the way business is conducted.

The findings, published in the report The Real Impact of Digital - As Seen From the "Virtual Coalface", were surprising and challenged our own perceptions.

Of the 1,160 people surveyed - managers, executives and board members from a broad range of organisations, industries, functions and regions - all were engaged in digital initiatives.

However, the extent to which the meaning of digital differed between organisations astonished us. It was not without a challenge that we grouped their digital initiatives into 20 categories. We concluded that the number of business problems addressed by digital is both vast and varied.

The most quoted reasons for engaging in digital initiatives were to improve customer engagement and increase efficiency; other initiatives touched primarily marketing, sales and business processes. The complexity of engagement was also wide-ranging. While some companies were effectively "defining industry 4.0", others were still focusing on "trying to get all their staff on to e-mail".

Companies' engagement in digital is often driven, not by an over-riding digital strategy, but by a multiplicity of business needs and aspirations that are both external and internal to business. In the majority of cases, these initiatives originated at a grassroots level where digital is applied to reach specific business objectives, some not feasible until innovation in digital technologies.

Digital initiatives are generally launched and managed by functional areas inside a firm. While they may at times cut across different functions, digital initiatives are rarely company-wide or mandated from the top. In fact, in many cases senior management or board members did not know the initiatives are taking place.

While over one-third of respondents indicated their main digital initiative has delivered or exceeded expectations, as many as 60 per cent stated it was too early to say.

Surprisingly, among those who claimed success, few (just 12 per cent) attributed it to the right technology. It seems despite digital often being positioned as a technology, it is by and large the combination of a right vision, effective leadership, and a supportive culture that make the difference between success and failure. Successful digital initiatives typically start by understanding how digital is changing the business environment, and then proceed by defining how the organisation, its products and services, and also its business model can leverage the opportunities brought about by digital.

For the majority of organisations we surveyed, digital is a journey of discovery with no clear destination. The companies appear to be finding their own digital pathway, navigating through their individual challenges and distinct opportunities. Thus the question to be asked is not "how can I digitally transform my company?" but rather "how can I achieve a competitive advantage in a digital world and how can the technologies emerging in this world help me succeed?"

NO ONE-SIZE-FITS-ALL APPROACH

There is no "one-size-fits-all" or right way to do digital, nor has a corporate digital solution emerged to benchmark against. This then raises the fundamental question as to whether a single form will indeed emerge around which organisations coalesce, or, at the other extreme, whether digital creates the opportunity for true customisation of a company's offering, business model and processes, potentially to as many different digital forms as there are organisations.

The findings formed the basis for 10 recommendations for managers, executives and board members looking to effectively manage digital within their organisation.

Digital technology is changing fast, constantly pushing the limits of what is possible. It will continue to do so and at an even greater speed. To compete, companies first need to understand what business in the digital age means in general, and subsequently its far-reaching implication on the organisation, the way it is managed, and finally the way it shapes and modifies a company's value creation.

When considering what investments to make and capabilities to develop, managers, executives and boards need to take into account that digital does offer rich opportunities for innovation and distinctiveness, unavailable until now. Capitalising on this, however, will require exploration, understanding and insight.

In sum, be wary of "the promised golden path to digital heaven", but do not ignore the possibilities brought about by innovation in digital technologies .