What does adopting a digital strategy mean?

More and more businesses are taking advantage of the digital technology to innovate and differentiate its products and services. New startups are redefining the rules and disrupting the industry. It is becoming a trend to progress beyond the conventional computerization into digitization giving rise to new business models. This is the digital economy era.

What does it mean to adopt a digital strategy?

Adopting the digital strategy is about using new technology to be aware of market trends and anticipate changes so that businesses can be more agile in making strategic decisions in time. Adopting the digital strategy is also about renewing current practices for further automation and simplification to shorten the time to value. The gem in adopting the digital strategy is to be able to think of innovative ways in doing business - new ways to solve problems, new ways to serve your customers, new ways to monitor efficiency, new ways to collaborate, and new ways to fund progress.

With a clear strategy combined with the inventive ways in applying technology, any business can be a market disruption in the digital economy.

Digitization and Computerization

Does digitization mean computerization? Not quite. Computerization was a form of process automation that generates information. Examples of computerization are:

1. The automation of a payment process that keeps a record of every payment transaction
2. The automation of a recruitment process that keeps a record of every application
3. The automation of a purchasing process that keeps a record of every purchase order
4. The automation of a production process that keeps a record of every production order
5. The automation of a sales process that keeps a record of every sales order

On the other hand, digitization is the idea of capturing real world events and modelling it into digital information. Examples of digitization are:

1. The modelling of customer experience into a customer engagement record from multi-channel interactions and sentimental comments in social media networks
2. The modelling of patient health into an electronic health record via wearable devices
3. The modelling of student progress into a student performance record from examinations and assessment reports
4. The modelling of crime situation into criminal event records from case files
5. The modelling of machinery state of repair into measuring points from sensors attached to machines

The objective of computerization before was on optimizing operations to become more effective and efficient. The benefits of digitization today is on innovating ways to create more value for both customers and partners. The combination of the two are essential to building a digital strategy.

Developing a meaningful digital strategy

As with all strategy, it is imperative that the digital strategy objectives are clear. The strategy is only meaningful if it allows the organization to:

1. Be better at creating value for its customers. To do this the business needs a direct relationship with its customer and to be aware of their needs and preferences.
2. Develop a strategy to capture some of its value into profits. To have a more flexible way to charge customers and a more innovative way to enable profit sharing.
3. Optimize its value chain through better collaboration with its business partners. To be more transparent on anticipated demand, price and terms.
4. Maximize asset utilization
5. Increase the returns for its stakeholders

Adopting the digital technology

It is increasingly easy to implement digital technology. With the maturity of cloud computing combined with an established network infrastructure, it is no longer a necessity to setup expensive data centers.

Computers are also becoming more powerful and more intelligent. It provides the opportunity to develop innovations that can processes larger amounts of data as well as managing calculations that are more complex.

With the social media gaining popularity, it is now possible to tap into these new data sources to understand customers' behavior, sentiments, preferences and relationships.

With IOT gaining traction in business applications, it is becoming easier to track and capture events as they happen. The variety of sensors not only allow for the redesign of Human Computer Interaction but also the machine to machine communications.

In conclusion

Adopting a digital strategy is more than merely subscribing to technology and tapping into social media sources. It is also about developing a strategy for improving and innovating the business. While the technology is readily available, is the business ready for change.