It makes sense that companies should have one digital strategy that guides certain digital investments. But the question then becomes this: What should that strategy be?
From our study, we see three broad types of digital strategies, each of which has very different implications for an organization:
Digital modernization: Improving a company’s existing business model, offerings, and business processes but without changing the business model, products, services, or business processes. Some 46% of all our survey participants – leaders, followers, and everyone in between — defined their digital initiatives this way. However, only 31% said this would be their strategy by 2020. (See Exhibit IV-17)
Digital transformation: Keeping the business model largely intact, as well as products and services, but making radical changes to business processes and unifying the customer experience. The Walt Disney Co.’s MyMagic+ digital initiative is an excellent example of this strategy. The same percentage of survey respondents (46%) said this was their digital strategy today. Fewer (38%) said this would be their strategy by 2020.
Digital reimagination: Using digital technologies to create a whole new business model, new digital products and services, new segmentation approaches and channels to customers. A distinct minority of survey participants – 8% — said this was their digital strategy today. However, 32% said it would be their digital strategy by 2020. Companies that have already begun to digitally reimagine their businesses are Netflix and many of the major auto manufacturers. Companies like Samsung say they may do so in the future.
Exhibit IV-17: The Most Common Digital Strategies Today and Predicted for 2020