Strategies For Digital Business – PART I
In just last few years the advances in technology have made many things possible that were not even conceivable a few years earlier. We live in the age of expansion fueled by scientific and technological advancements. The possibilities are virtually limitless and the race to the top has accelerated exponentially. The modernization efforts to take advantage of these advancements in technology have exploded across all industries and sectors. These modernization efforts are not just another fad but are essential for survival of businesses.
The advent of SMACIT technologies have leveled the playing field and are allowing new entrants to compete with the incumbent on equal footing (SMACIT is short for - Social, Mobile, Advanced analytics & machine learning, Cloud, and Internet of Things; and I would also include Virtual and Augmented reality - VR/AR technologies to the list). It is now only up to the business leaders to take full advantage of this deluge of innovations that are easily accessible to advance their place in the market.
Adoption of innovative technology, depending on how it is done, can be a double edge sword. A poorly planned strategy can result in bad technology adoption. Doing too little and too late will guarantee quick exit from the market; and doing too much without strategic focus and planning can create expensive ‘tech-fatigue’ to the point of no real gains and even worst, with no hope of recovery due to high opportunity cost.
Striking a good balance between adopting the right innovative technologies at the right time and managing associated technology risks successfully has proven to be the secret of strategy success. The speed of adoption, quick entry to market by mastering application of SMACIT technologies to solve business problems has become the imperative. Those businesses who have successfully managed to embrace modern technology as their core foundation of business model are already well ahead of their competition. Businesses who are failing to catch up will certainly perish. There are several examples in the recent years of failing businesses (small and large) as result of acting slowly, or not at all, you just have to check out business news.
In early 2020 without much warning the pandemic hit the globe; it continued to hit hard throughout the 2020, 2021 and now in 2022. The “new normal” is not as new anymore and has certainly forced permanent changes in business models of many businesses. This pandemic has turned out to be that proverbial ‘final nail in the coffin’ for many businesses. For most, their business model was not fit-enough for operating under the new normal and so they never had a chance to hold up against the relentless stressors that caused shutdowns all around the world bringing the supply chains under tremendous pressure. Businesses who had extra cash and some wiggle room to adapt but failed to do so quickly due to complacent leadership are themselves to blame. Those who were unprepared to begin with, even before the pandemic, unfortunately had to go the way of dodo.
That said, a few businesses used this rare opportunity to catapult themselves to higher leadership positions by quickly adapting and evolving, and in some instances, even transforming their business models grounds up by creatively and prudently adopting SMACIT technologies. These were a better managed businesses to begin with who were quick enough to formulate the right strategies by investing their precious limited resources wisely into building incremental foundational capabilities based on SMACIT technologies, to not just stay afloat but rise above the competition and increase their market share.
There is a recurring theme here when one reviews successful businesses from the last couple of years who have managed to thrive during these tumultuous times. The businesses who have adopted technology-based strategies regardless of their business models stand out and are clearly gaining a lot of press and generating interests. There are variations on actual application of these strategies however, they all revolve around the following six approaches.
It is important for businesses to understand the relevance of these technology-based strategic approaches on their journey to digital transformation. It is helpful to understand how these strategic approached are influencing and shaping the business and operating models of today’s leading companies. Many businesses today are planning or already in the process of adopting one or more of these strategies to cope with the current market forces.
Customer Centricity
Regardless of the industry or sector, all businesses serve their customers by providing value added products and services. As they say “beauty (or value) is in the eyes of the beholders.” The determination of the value of a product and service, of course, is made by the customers who enjoy the outcomes and not by the businesses. Therefore, it makes obvious sense that customers, and not the product or services themselves, should be the focus of strategic planning and implementation activities.
The two approaches, the Customer intimacy, and Customer centricity are closely related with subtle differences. Customer intimacy is to do with ensuring that individual interactions a customer has with the business are as pleasant as possible and they thoroughly meet the customers’ demands; this helps build lifetime loyalty from the customers. The focus is more on customers’ demands or wants rather than on their needs.
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Customer centricity goes much deeper and beyond; it attempts to understand a customer personally so the business can rationalize their needs. Customer intimacy approach aims to understand what customer is looking for so they can sell the desired products and services. Customer centric approach on the other hand makes extra efforts to first understand “why” the customer is looking for certain products and services. The customer centric businesses attempt to understand the customer’s point of view by directly involving them in the product and service design or indirectly involving them to co-create what they are looking for, not just the right product or service but the entire end-to-end experience - from awareness to fulfilment. Customer intimacy approach is more reactive. Customer centric approach is proactive and is the next step in providing the ‘total’ experience to the customers.
There are far reaching implications of adopting the customer centric approach; this is a fundamental shift in how businesses perceive their customers and how they choose to provide complete solutions. It implies changes to the business’s very DNA - its culture and requires them to embrace a new philosophy of getting to know the customers on a personal level and making a difference in their lives in some way.
Businesses depending on their sector and industry operate in many ways. So, the notion of a customer can vary from business to business. For a business that serves other businesses, their customers are other businesses and business partners, for example, supply chain partners, brokers, and dealers. Government as an organization serves its citizens under its authority so the citizens are the customers in this case.
Businesses follow all sorts of value chains – business to business (B2B), business to customers (B2C or direct), business to business to customers (B2B2C or indirect), and business to government (B2G). Let us not forget that employees are internal customers of the business, therefore, business to employees (B2E). In the case of government, you may see value chains such as - government to citizens (G2C), government to business (G2B), government to business to citizens (G2B2C), and government to government (G2G). In all these cases for a customer centric organization the “customer” is at the center; in other words, the design of all end-to-end transactions of value must keep the needs of the customer in focus.
Customer centricity encompasses all aspects of knowing the customer’s behaviour to make sure the products and services are personized by the business to the maximum extent to cater to the customer’s specific needs. It also encompasses providing a complete, seamless, frictionless, and secure solution with a ‘total’ experience to the customer for every interaction throughout their ‘journey’ with the business regardless of channel of engagement (e.g., in-person, in shop, website, chat, mobile, contact center, kiosk, social network, etc.).
There has always been pressure on businesses to open new channels to reach out to the customers. The SMACIT technologies make it possible to support all modes of engagement and all aspect of implementing a true customer centric organization. Modern forms of eCommerce and Metaverse (Web 3.0) will soon become the norm and the pandemic has only accelerated the push towards adoption of the new digital cannels.
Look for PART II of this article to be released shortly.
Author: Sunil Rananavare, IT Strategy Planning and Architecture (CIO Advisory)
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The views in the article are author’s own and not necessarily of his employer.?