3 Elements To Understand What ‘Being Digital’ Means

A quick news search for “digital” returns 31 million news articles. By comparison, “marketing” had 11 million. Digital is the buzz term in vogue by research houses, consulting and advisory firms, technology firms, marketers and agencies. There is good reason for this as most experts offer useful perspectives on impacts to industries, challenges to be overcome and opportunities for value creation. With this much information, no wonder there is confusion on what digital is and how it is important in the (r)evolution of businesses. In this post, I offer a framework to understand what “being digital” means, beyond the marketing definition, and how leading organisations are driving towards this. 

Being digital is not about having an app.

If being digital was as simple as having a mobile app, equipping the sales force with iPads, striving for ‘likes’ on facebook, or moving the organisation’s data to the cloud, then being digital would be easy for businesses. While for some companies these elements may be important individual components of a digital strategy, they won’t propel growth or lasting competitive advantage. There are a number of inter-related components at play; executives need a framework to see how the components work together such that they can plot their own path to ‘being digital’.

What is it to ‘be digital’?

Let's start with defining digital as increasing the connectedness of people, things, processes and products while generating insights from the information produced to create value. Businesses like Twitter, Uber and Nest create customer and shareholder value by enhancing the connectedness and use of insights among people and things.

Being digital then, means understanding how to bring together a number of interrelated components that increase connectedness and insights. Leaders at ‘being digital’ not only understand the individual component parts, they also grasp the interplay between them and exploit this to create a digital premium for their business.

While it is ambitious, and a bit nerdy, to try describing a social phenomena as a formula; it offers a good framework to discuss the various things that make up being digital. More importantly it captures the idea that being digital is greater than a collection of the latest technologies. The formula is not intended to plug numbers into, but rather act as a heuristic for a meaningful conversation about a game changing mega-trend.

The idea here is to reflect the following observations:

• Connectedness (left side of the numerator): The channels through which customers interact with firms are increasing; this is an opportunity to create deeper connections with them. The formula attempts to reflect that connectedness increases as the number of customer channels increase however, the quality of those channels remains crucial.

• Insight (right side of the numerator): The digitization of channels, customers and other resources is producing plenty of information. Driving value from this information requires capabilities such as analytics that generate insights from the information. The formula attempts to reflect that insights increase by investing in data and analytics capabilities to better utilize the vast amounts of information being produced.

• Technology platforms:Here we capture the idea that you are more agile and therefore get a bigger multiplier when the number of platforms is low. A single platform offers more agility than fragmenting the business across multiple technologies (think non-integrated channels and IT infrastructures).

Connectedness = Customers^Channels

Customers respond to brands that create meaningful connections with them. This contributes to a new standard among consumers: they expect the mobile and social experience to be highly personalized and intuitive. They expect to be given the ability to get timely contextual information that relates to their lives, their friends, their needs, and their pursuits.

Success is no longer a matter of creating marketing playbooks that move customers through linear purchasing processes within brand-controlled channels. Now, customers are always-on and used to user-controlled channels. Brands therefore need to create smarter, seamless and secure experiences at every moment of truth regardless of channel.

Key to making this transition is understanding that consumers aren’t just buyers anymore—they’ve evolved into connected consumers. They have high expectations for a more humanized relationship with their products and services. Savvy companies are using service design methodologies to infuse empathy and delight into every interaction as are part of an omni-channel customer experience that amplifies the connection with customers. 

Insights = Information^Capability

Taking data from customer channels and turning it into actionable insights is how you generate value from information. It is not just good to know a lot, you have to know the right things and apply them in the right ways to get a real multiplier.

Individuals, enterprises and governments are creating data at exponentially faster rates as technology is being adopted. The digital universe will about double every two years – more than 5,200 gigabytes for every man, woman, and child in 2020. 

Business leaders now view data as among their most valuable assets, some even call it the lifeblood of their organization. However, data only becomes valuable once it is turned into insights. The application of capability to the information is required to turn data into insights. Capabilities that are required to do so include data management and processing, analytics and data science, data visualisation and driving automated decision-making.

Leading companies are moving rapidly to take advantage of technologies that move, mine and consume increasingly diverse data from an ever larger array of sources and sensors, driving outcomes sooner with greater impact than anyone imagined possible (i.e. Big Data). The result is a complex and challenging environment: architectures and analysis are always on; vast volumes of data are being continuously gathered and must be consumed and analyzed at speed; more data means more noise around meaningful signals.

Even insights are useless without the ability to do something about it at the ‘moment of truth’. This is why insights are intrinsically linked to customers and channels.

Technology platforms

Businesses continue to compartmentalize, even pioneering businesses fall into this trap. This leads to disaggregated technology infrastructure, data and processes which are either extremely expensive, or impossible, to stitch back together to enable effortless customer journeys across business units, products and channels of a service provider. 

A digital technology platform is greater than an IT infrastructure. Digital requires supporting a range of complimentary business activities and technologies. Platforms are the point of integration in contrast to an infrastructure that enables specific solutions.

Leading digital companies describe the goal of an effective platform for innovation and operational success as ‘many out of one’. A platform needs to support diverse and evolving sets of products, services and processes. Infrastructures must evolve into digital platforms in order to provide an adaptable, scalable and efficient delivery vehicle.

Conclusion

Digital is an arena that is in flux; each new disruptive technology or business model changes the game and the way you need to think about being digital. As such, using a formula to describe the phenomena is fraught with danger. The intention is to provide a framework to plot your own path to ‘being digital’, to begin a meaningful conversation about what is required and how to make the most of your investments in digital.

Each of the five components are seeing tremendous change in their own right; seeing them all together goes some way to explain why “being digital” has quickly gone to the top of C-suite priorities around the world.