Do a search on “Digital Readiness” and you’ll get about 300 000 hits. So there’s a lot being talked about on the subject. However we’ve found that a lot of executives don’t understand the business implications, or are “buzzword compliant”: they’ll say “we are digitally ready”, without knowing the real meaning of the concept. In a recent survey of senior executives it was found that 80% of executives misunderstood the concept.
Firstly digital readiness is about business, not technology. It’s about how you do business, how you interact with customers and how your internal processes work on a digital platform. Also being digitally ready means that you are able to react quickly (like in days) to developments in the market or in your competition. Finally being digitally ready means that you are able to lead the market by disrupting the competition or even the market itself.
There’s two factors to look at: What elements of your business contribute to digital readiness, and how far along the journey you are. Leaders in digital readiness have the platforms in place to disrupt their environments. And survivors have the bare basic elements in place.
Step 1: Digital Ecosystem
A digital readiness strategy starts with your digital ecosystem. This is how you frame what your business is and where it operates. In leading companies, their digital ecosystem is a key part of their business model. Leaders understand their unique strengths and integrate these with their partners to provide services that are greater than the sum of the whole. Survivors’ ecosystems are sad things – an ecosystem with one player.
Step 2: Online Presence
Another element of readiness is the face you present to customers – your online presence. To get from survivor to leader, you need to have integrated online ordering and to use your presence to establish a relationship with your customers. (A relationship is a two-way street – or so my wife tells me).
Step 3: Digital Marketing
You need to also take the digital marketing journey. You move from supplying information online – an inside-out approach (“Here’s what we have, come and get it”), to an outside-in approach where you track what customers want, test products and services against these wants, and include your customers in your marketing plans.
Step 4: Ecommerce
Ecommerce is where any business or commercial transaction involves the transfer of information across the Internet. This is commerce with customers, suppliers, partners and anyone in your digital ecosystem – the important part is that it involves the transfer of value across the internet. Survivors use the internet to find people and things, while leaders in ecommerce have stitched their internet processes together to present a single face to their ecosystem’s customers. They have integrated their offerings and share strategies to reach customers.
Step 5: Customer Experience
Probably the most important element of the digital readiness journey is the customer experience. This involves, not just the buying experience of customers, but the experience that customers have throughout your value chain. In leading customer experience companies, their customers are part of the product development process. Leaders find out what customers need before releasing new products. Survivors in this space deal with customers at arm’s length – through emails and through their website.
Step 6: Mobility
Another element of digital readiness is “mobility”. This is significantly more than allowing customers to use their smartphones to interact with you. It involves all devices that can be carried – laptops, tablets, and phones – to allow customers, staff, suppliers, and well anyone really, to interact with you no matter where they are. Leading companies use geolocation (knowing where any device is connecting from) to provide location specific services. Surviving companies think mobility is about customers viewing their website on their phones.
Step 7: Digital Legacy
Legacy systems almost always put the brakes on the digital readiness journey. Not only are they lacking in functionality that takes advantage of latest digital developments (e.g. Mobile), they also are jury rigged to fit business processes. Finally they are often customised and are difficult to upgrade. However there is technology available that helps integrate legacy systems quarantining them from digital developments and business progress. This is your first step to move beyond survival in this space. The steps towards leadership involve fully integrating everything, separating systems into their rate of change and business or customer focus, and finally real leaders have agile development platforms that allow them to respond in days.
Step 8: Digital Products
Digital products are the last element you should look at. (It’s pointless developing products if you’re not digitally ready everywhere else). You begin by digitally wrapping physical products – putting in place virtual showrooms, comment and rating systems, and so on. Then you can digitally augment physical products by linking them and their status to digital systems – a home security system comes to mind. Finally there are products that are purely digital. They exist only online – they can be reviewed, bought, downloaded and operated online.
The digital readiness journey begins with reviewing your business ecosystem. This involves a deep look at your business model. Then you digitally connect the ecosystem on a platform that allows value to flow between components. Then you can look at your online presence, digital marketing, e-commerce and customer experience. At the same time you need to take action regarding your digital legacy. Once this is done, wrapping, augmenting or developing digital products should be a breeze.
One final note: Leaders in the digital space start their thinking with the customers’ needs. They use customer needs to drive strategies, development and their business model.
Click here to take the OutSystems digital readiness assessment to understand your businesses’ digital capability and steps to improving your businesses’ digital focus.