Digital Operational Excellence

“Digital customer experiences are only the shining faces of a digital business. Those pretty faces quickly lose their luster unless you’ve also transformed your business operations to make them better every single day.” — Forrester

In other words, front-end success depends on back-end support — and that support is increasingly based on a digital infrastructure. Forrester calls this a strategy of “digital operational excellence” and points out that 80% of a company’s digital transformation should be directed to this purpose.

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Digital Disruption has already happened…

Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services.

If you believe that this is a future thing, you are wrong as it has already happened:

  • Most popular media owner creates no content (Facebook)
  • Worlds largest taxi company owns no taxis (Uber)
  • Largest accommodation provider owns no real estate (airbnb)
  • Largest phone companies own no telco infrastructure (Skype, WeChat)
  • Worlds most valuable retailer has no inventory (Alibaba)
  • Fastest growing banks have no actual money (SocietyOne)
  • Worlds largest movie house owns no cinemas (NetFlix)
  • Largest software vendors don’t write the apps (Apple & Google)

 

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Digital Disruption’s Objective

Digitization of products, services, and business processes allows disruptive players to deliver the same value a traditional competitor provides —and even augment it— without having to reproduce the conventional value chain.

In fact, that is the objective of digital disruption: to provide superior value to the end customer — either a consumer or another business — while avoiding the capital investments, regulatory requirements, and other impediments of “encumbered incumbents.”

excerpt from: Digital Vortex How Digital Disruption Is Redefining Industries http://www.imd.org/uupload/IMD.WebSite/DBT/Digital_Vortex_06182015.pdf

Five Keys to Success Leading Digital Business Transformation by Cisco

  1. Lead from the Top Down: Given the magnitude of digital transformation, only top-down leadership will ensure that new strategic directions are cultivated throughout the organization and the right culture of innovation is created.
  1. Create the Workforce of the Future: Digital business transformation requires a next-generation workforce that is digitally savvy, creative, and accustomed to constant change. Collaboration solutions and the sharing of information — in real time and across fragmented silos — are critical.
  1. Merge Business Processes and Technology: By knocking down silos and integrating IT and operational technology (OT), organizations can drive real-time agility and deliver new levels of business and operational efficiency as they connect everything, embrace analytics, and secure their technology and operations.
  1. Ideate and Innovate Fast: Agile IT, automated business processes, enhanced collaboration and decision-making, real-time insight — all of these factors combine to create fast innovation. The digital business ideates quickly as creative, connected employees drive rapid prototypes and speed time to market — and respond to ever-changing opportunities, successes, and failures.
  1. Cultivate the Partner Ecosystem: Organizations will need to rethink their partner ecosystems as they seek unique value that will create new disruption. Cultivating the right network of vendors, partners, and contract workers will be critical to smoother and more impactful digital business transformation.

Source: http://blogs.cisco.com/ioe/five-keys-to-success-leading-digital-business-transformation

Digital Transformation Definition

Digital transformation refers to the changes associated with the application of digital technology in all aspects of human society.

digital transformation
How do you define digital transformation? Photo by Detlef La Grand on Flickr

Digital transformation may be thought as the 3rd stage of embracing digital technologies:

Digital competence → Digital literacy → Digital transformation

The latter stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods.

In a narrower sense, “digital transformation” may refer to the concept of “going paperless

Some other definitions:

The realignment of, or new investment in, technology and business models to more effectively engage digital customers at every touchpoint in the customer experience lifecycle. ~ Altimeter

The use of technology to radically improve the performance or reach of enterprises. ~ MITSloan

Digital transformation closes the gap between what digital customers already expect and what analog businesses actually deliver. ~ Verdino & Co