To survive in the age of the customer, you must become a digital business. These organisations win, serve, and retain customers by continuously creating and exploiting digital assets to simultaneously deliver new sources of customer value and increase their operational agility.
Enterprise CIOs know that they need to make this transformation, but the issue is getting past the roadblocks that come with being a traditional organisation.
Even if enterprise leadership wants to encourage creativity, risk taking, and rule breaking, their management infrastructure and corporate culture usually inhibit these things.
For digital to become a core competence and a tangible cultural value, there has to be internal congruency between processes, metrics, reward structures, rhetoric, and top management behaviour – and it's precisely this synchronicity that is lacking in most traditional companies.
The here and now
It's clear from the results of our 2016 Global CIO Survey that there are organisations at all different stages on the digital adoption bell curve. While 7% of the 708 respondents believe their organisation is at the point of being entirely digitally enabled, of the rest:
- 22% of firms fall into the early adopter category
- 45% into the early majority
- 22% into the late majority
- Just 5% could be categorised as digital laggards
Analyst company Forrester puts the different stages of the digitisation journey into four categories:
- Digital Dinosaur – the organisation needs help beginning your transformation
- Digital Connector – the organisation understands digital customers but doesn't operate digitally
- Digital Operator – the organisation creates digital efficiency but doesn't focus on the customer experience
- Digital Master – the organisation excels at digital thinking
What makes a master?
Digital Masters are better than their competitors at two key capabilities: the digital capability – perhaps an obvious one – and the leadership capability.
- They use SMAC technologies (social, mobile, analytics, and cloud) to engage with customers the way they want to work, not the way the company finds easiest
- They make operational processes efficient while constantly introducing innovations to those processes
- They enable their workers to collaborate fluidly and make data-driven decisions
- They transform their business models through data and technology
- They understand that leadership drives transformation, not technology
- They craft a compelling transformative digital vision and help the organisation to make it a reality through active engagement and strong governance
The here and now
Before the CIO can identify the changes necessary to become a digital business, it's important to understand where the organisation is now.
This essentially requires a digital SWOT analysis in the context of your market, because the approach you take from here depends on your individual organisation and the disruptions in your own industry.
For example, identifying where your organisation is on the maturity curve will help you to decide whether a digital strategy would be best executed from the top down or bottom up.
However, if your company culture isn't ripe for digital transformation – that is, staff aren't on board with the vision and are resistant to change – trying to instigate the strategy from the top down is not going to be effective.
Digital transformation requires a cultural change, and this process has to start from the bottom; with the people who are on the ground.