The Digital Enterprise: A Framework for Transformation

The global business environment is being disrupted by the collision of an unprecedented wave of innovation. The combination of pervasive networking, the explosion of big data, the availability of advanced analytics and social media, and the fact that mobile technology will become businesses’ new face of engagement means that, in the very near future, “digital” and “business” will be synonymous. To grapple with this fact, businesses need a new framework of understanding and action.

Big data, cloud computing, social business, and mobility are causing digital disruption across many industries. Social media and mobile technologies have shifted the balance of power and influence to the consumer. Engaging effectively with the ecosystem to drive ROI requires a shift in both technology and culture.

Many business leaders simply see digital as siloed components affecting only certain parts of the organization. This is a critical error. Digital does not impact some parts of your business: it ripples and through it and will change almost everything about your business.

Harnessing the disruptive force of digital requires a holistic view of the enterprise, encompassing both technology and culture. Digital must be ingrained and integrated across sales, customer service, marketing, and human resources, affecting the entire universe of business operations. Don’t create a digital department. All of your departments will be digital soon (see “Expanding the Digital Guest List” in this edition of Perspectives).

At some point, digital will impact your P&L enough that you will be forced to change, but if you wait until you see a significant shift to act, you’ll already be behind. The key is to predict the most likely and extreme areas of impact, as well as the areas you can leverage for your business, and to become a “digital first” mover rather than a reactor.

Survey: Social Business Maturity

Select each social program/effort you are actively engaging in as a business

Social Progress Score
Have a presence in social media (for example: a company Facebook/Orkut account) 2
Have multiple functions operating in social (for example, you have both a corporate Twitter account and a customer service account) 3
Have begun integrating social media activities as well as coordinating social efforts across channels 4
Have begun using social media tools to improve internal operations (for example, social collaboration for improved productivity and performance) 5
Have embedded social media into business processes or are conducting business processes over social media/networks (for instance, managing customer issues via Twitter) 6
Have incorporated social analytics into your decision making (for instance, using social insight to make marketing investment decisions) 7

Scores:

  • 2-9: emerging social business
  • 10-20: maturing social business
  • 21+ advanced social business


Drivers of Transformation

Four critical areas of technology are driving the changes in today’s enterprises and creating a perfect storm of innovation.

Big Data. Companies, customers, partners, and machines are all generating more data than ever before, structured, unstructured and semi-structured. Twitter streams, social media data, and more are unstructured data that doesn’t fit into neat categories, but if it can be assimilated, it’s also more valuable than structured data. The rapid expansion of big data means you’ve got more data about customers in more places than ever before, but more data doesn’t it easier to develop a composite picture of the customer.

Social Media. Social media is largely responsible for a shift in the balance of power from businesses to consumers. It has also created a powerful, two-way communication between consumers and businesses. As a tool, it has tremendous potential for both business-to-business and business-to-consumer engagement, building loyalty and sharing or “crowdsourcing” solutions among partners and customers in the ecosystem.

Mobility. Enabled by mobile communications, the “anywhere, anytime” culture is pervading and transforming business. Location-based offers to mobile devices target consumers near the point of sale. Productivity increases as workers access corporate resources from mobile devices. Business processes can be rethought, informed by mobility (dynamic rerouting of service calls for example). Mobile apps will ultimately be the face of customer engagement. And depending on the app, the traffic could strain your infrastructure.

Cloud Computing. Cloud computing offers new scalability and economy, but also creates shadow IT initiatives, as one department signs up for cloud resources unknown to the IT department. This in turn creates more silos. The fact that cloud offerings are typically paid for by subscription makes them economical and moves capex to opex, but even this indicates that digital strategy must be embraced holistically: Finance must understand the implications of that shift.

The problem is that companies are “doing” big data, social, mobility, and cloud. Such initiatives are not holistic or strategic but scattershot and isolated. The digital transformation is not being managed holistically.