For the past 5-10 years there have been many mega trends in IT; Big Data, Machine Learning, Cloud, the Internet of Things, and the one that catches them all… digital.
I started my career at Digital Equipment Corporation which was clearly one of the companies that designed and developed products ahead of their time with a poor marketing focus. And it’s interesting because as I was going through college, punching code on a PDP11 terminal, I looked at that “Digital Equipment Corporation” logo wishing I could work for them someday simply because I believed that digitizing the real world was the way of the future.
Why does the term, “digital” attract so much attention today? Is the sole purpose of IT to digitize information?
The word, “digital” is coming back to haunt me now—Today, it’s here to disrupt company strategies and force them to think differently and it will leave in its wake winners and losers. Companies that embrace the need for radical change will succeed in the digital world (i.e. Netflix) versus ones that will look at digital simply as a program or projects. These will inevitably fail and leave execs shaking their heads in disbelief. (i.e. Kodak).
“Digital,” in most cases is synonymous with innovation, and for the past five years, regardless of which company I was working with, you’d find a digital program led by very smart people—people who wanted to re-invent how the company did business. At conferences, the digital theme is often related to a mobile app designed to accompany their customers in their daily life, no matter the product or the service.
A digital strategy defines what attributes of a product or a service can become measurable so the provider can change their product or service to offer a better customer experience.
Digital is about measuring the customer experience throughout the pursuit of consumer goals whatever that goal might be; finding the perfect gift, losing weight, booking a hotel, or remembering to take a prescription.
What’s fascinating about digital is that it’s creating a separate virtual reality based on data attributes that we create to describe the physical (psychological/behavioral) relationship between the product and the customer.
It’s a holographic representation of the physical world in a digital world.
Before we can create a digital strategy, we need to have a solid understanding of what data is needed to understand the customer experience to adapt products and services to drive profit. We need to first define what attributes of the product or service need to be created to measure customer experience. These attributes need to describe the product in a digital sense, and also describe customers with all the attributes that can measure product experience.
A major change in our approach to defining a digital strategy is to design it from the outside in. It’s no longer about how we sell our product and how we should enhance it to drive sales—but it’s about understanding our customers’ expectations and why they’re choosing our product or a competitor’s.
Another shift in perception is that it’s usually unnatural for large enterprises who have been in business for several decades to grasp that not all data needs to be generated within the company.
In a digital dimension, data can become an alternate source of revenue or an alternate currency to form valuable partnerships with other service providers.
At the most basic level of execution, follow these four steps to create your digital strategy:
- Define the decision criteria a customer is likely to follow when deciding favorably about your product or services. The digital approach shouldn’t be defined by IT but by Marketing and Product development. [Business Contribution = 90%, IT Contribution = 10%].
- Define what you need to measure to trigger, influence, or monitor that favorable decision. The measurement needs to describe both the product, the consumer, and the sentiment towards the product or service driving the decision. Digital is about the measurement of what emotions triggered the consumer decision with the most positive outcome.
[Business Contribution = 80%, IT Contribution = 20%].
- Analyze how and where you’ll get the data so you can react in real time (or as close as possible). This will require a shift from the traditional thinking of “building a capability or digital product” to simply, partner and/or leverage data that another company is already creating or collecting. For example, I don’t need to build my app in a way to integrate with a wearable sports device to know the activity level of my customer—I partner with an app company that’s already solving the device interface problem and simply collect activity data from them.
The value is in obtaining reliable data, not how you obtain the data. Also, the ability to react makes a difference between you and your competition because customers don’t measure you by the speed in which you can acquire and analyze data, but by the time in which you can deliver tangible value to them. [Business Contribution = 50%, IT Contribution = 50%].
- Define what technology or services (internal or external) you’ll leverage to get this data. This is where the Internet of Things (interfaces with devices) and Microservices architectures (integrate someone else’s data) come into focus.
This is the last step in the process and not the first—yet it’s how you realize the ability to react in real time to meet (or exceed if you’re innovating) your customers’ expectations. For example, browser cookies and history aren’t a secret and they can describe a customer journey even before they start navigating your site or mobile app. [Business Contribution = 10%, IT Contribution = 90%].
Earlier in this article, I described digital as the collection of all IT megatrends because by now, you realize that digital is more about data than about technology. Technology, like the Internet of Things, is simply a series of data generating devices that you don’t necessarily need to be concerned about interfacing with if you can buy the data (in real time). The cloud can allow you to run a proof of concept of your idea and a week later, scale it to the entire world. Big data and machine learning gives you the ability to collect, analyze and predict your customers’ needs to let you provide the best customer experience possible.
Leo Barella
VP, Enterprise Architecture at AstraZeneca
