The business world is largely getting wise to this, with organisations from many industries making digital a priority. However, companies often struggle to turn their digital ambition into genuine competitive advantage.
The main reason we see is that companies focus on developing distinct digital strategies, bolting things on like a website or an app, rather than taking a holistic approach and digitising their business strategy – a subtle but important difference.
The true experts are fundamentally changing how they go to market, changing processes, operations and customer experience to deliver real value to their customers.
To investigate this further, a Forrester report jointly commissioned by Salmon and Rackspace analysed how 150 global businesses approach digital transformation and benchmarked those companies that are succeeding in digitising their business strategies.
From this, we can identify the key success strategies that separate the digital experts from the laggards.
From our experience, it’s clear that businesses by and large are aware of the importance of digital development. Of the businesses surveyed, 81 per cent stated that they have a clearly defined and articulated business strategy that covers digital.
Organisations also appear to have significant confidence in the implementation of their plans – 74 per cent of businesses claimed to have the right structure and internal skills to deliver their digital strategy. But the question is whether this confidence translates into real digital success?
To assess each organisation’s digital maturity, the study asked respondents to analyse their own approach to digital and technology, assessing criteria including executive support, resourcing, vision and operational effectiveness.
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Based on the results, Forrester segmented the companies into categories ranging from digital experts down to digital laggards – which represented a surprising 57 per cent of the businesses.
Despite digital being named as a priority, only a few organisations are executing digital successfully and maximising the value of their investments.
So what makes the 11 per cent of companies that believe they are strong at digital (digital experts) stand out from the 57 per cent that believe they are under-performing (digital laggards):
(1) Focus digital transformation on the customer
Experts approach digital with customer impact in mind, focused on generating new revenue, attracting new customers and launching into new markets. By contrast, laggards focus on internal processes and cost reduction. This outward customer-focused approach is a key differentiator between experts and laggards.
(2) Unite the business to drive digital
Digital transformation cannot sit with one team. Instead, organisations should assess digital requirements from across the business and set objectives.
Businesses should bring together cross-functional digital talent to digitise their strategy and break away from the legacy approach of creating a digital strategy that is distinctive to the overall company strategy.
The study found that digital experts were more likely than laggards to establish a digital Centre of Excellence combining business insight, customer experience and technology expertise.
(3) Find the right funding model
Digital experts set clearly defined and articulated KPIs, not solely targeted at revenue. Across the business, metrics such as customer lifetime value and employee satisfaction are just as important as increase in revenue.
Digital experts also brought in non-traditional teams such as the finance department to establish a clear funding model early on in the life of their digital transformation programmes.
It’s reassuring that businesses are giving digital the attention that it warrants. However, to deliver on plans and achieve value for the business, organisations must break away from the desire to define and execute digital strategies that run in isolation to the overall business strategy.
It’s only when an organisation “digitises its overall business strategy” that transformation is truly achieved.
Elsewhere in the world of digital, using wearable technology for business will provide benefits across sectors.
Martin Girdlestone is head of consulting at Salmon, an ecommerce agency that works with some of the world’s largest companies to digitise business strategies and ensure that digital innovation brings true business value.
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