Digital Strategy as Platform Ecosystem (Part 1 of 3)

Many research reports have shown how digital strategies and investments have failed to deliver on their promise on impact and ROI. Typical quoted success rates are between 20% to 40%. While there could be many reasons for such large failure rate, the first and most important one would be having a clear digital strategy that is integrated into the business strategy,?as the same sets the direction for the organization and determines resource allocation.

I read, learned and listened to many to determine one for my organization. We created a framework few years back. Like every year the annual plan exercise acted as a good nudge to reflect on the same to make any changes as needed. The good news is the building blocks remain the same even after five years of creating it first time, of course the nuts and bolts (i.e., Digital and Analytics use cases referred to as ‘DnA’ ) need revamp every year. Thought of sharing the building blocks with all of you and take your feedback on the same. Am sure many organizations have various versions of these with maybe different names.

We carved out our digital strategy in four key themes. Each theme planned in the form of platforms that would continue to evolve over the years. Thinking of these as platforms makes one future ready with capabilities to collaborate and integrate partners, experience design for each persona, embedded AI including learning engines, network effects and many other benefits. Below is a summary ?–

1.?Core Platforms – This is all about foundations, processes, data and enabling ways of working. Below elements provide a good summary of core platforms.

a. Modular, scalable and secure infrastructure is the foundation for everything and hence deserves the first mention in the strategy document

b.?Systems of record for all key processes like hire to retire, order to cash, procure to pay ?form the foundation of the way organization operates and hence need relevant focus

c.?As we think of how works gets done, the same actually flows horizontally between units and functions, while most organizations are designed vertically by units and functions. Hence important to create internal platforms that enable the key value chains for the organization. These platforms typically sit on top of the systems of records and enable ease of flow of work, effective collaboration and creation of internal learning engines. Examples of this could be processes like new product ideation to commercialization and Supply chain Planning to execution.

d. Making data a strategic asset by building data lakes that would bring data together from within and outside the organization. Effective Collect, Connect and Analyze strategy would set foundation for data driven transformation including data driven decision making and embedded intelligence in workflows.

All these investments are very important and have a very long tail of benefits ( refer my article ).

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2.?Growth and Customer Engagement Platforms -?These platforms should help us establish and execute on levers that help growth in the four quadrants of existing and new customers, existing and new products and services.

Platforms here would vary depending on nature of industry, but typical examples would be ?around e-commerce, D2C, omni channel marketing, sales force excellence, personalized customer engagement, customer integration platforms, etc.

A good example of sales force excellence platform in pharma context is a combination of DnA use cases that allow companies to reach more doctors, personalize each conversation depending on the doctors’ context and close the loop with other services like learning platforms and round tables depending on their needs.

3. Productivity Platforms -?This is about getting the best throughput from the value chain in the most effective way. One approach to prioritize streams here is to apply the lens of the profit waterfall of the company. From the sales to net profit every drop in the bar below is an opportunity to optimize and various Digital and Analytics platforms can help achieve the same.

To put some examples from a pharma context ?-

Operational Excellence Platform – This would be a combination of various DnA use cases that would allow for the most efficient and highest quality manufacturing. Digital twins for better scheduling, algorithm driven yield optimization and golden tunnel to produce at optimum quality would be few examples in this stream

Supply chain and Commercial Excellence Platform – Inventory optimization, shipment cost optimizer, reduce leakage in Gross to Net ( optimize discounts and freebies ) and reduction in lost sales would be few use cases in this stream.

4.?Platforms to enable New business models ( Ecosystem play ) -?This probably is the most dynamic stream as one has to keep evolving it with the changing landscape around you. I have tried doing an outside-in to understand how different companies are dealing with it and realized every one has chosen different approaches depending on what seems most suitable to them.

Some have chosen to venture into new product lines or offerings, for some it is about combining services with products, for some it is about new markets and for some it is about being a meaningful player in the ecosystem. Amongst all the approach I personally like the most is ‘to be a meaningful player in the ecosystem’. To remain a meaningful player one has to remain open and curious to be upto speed on the changing dynamics of the ecosystem, continuously adapt to changing customer needs and learn to collaborate with other players to create better value.

Each idea in this stream has to go through a very important lens of alignment with the organization vision and purpose, else one can get lost in the various possibilities.

While the prioritization in each of the streams could change every year depending on business dynamics, the four streams need conscious consistent planning with changing environment. Each of these platforms will have a multi-year journey which would be always evolving.

Examples in streams above would have a flavour of B2B and Pharma given my experience in that space, and hence would invite comments from friends from other industries to share their views.

Once one has sorted the ‘What’ which is above, the other part of the work is the How - Enablers and the Governance. Will pen down my learnings on the same in the next post. Until then look forward to hearing from you.