'The great thing about fact-based decisions is that they overrule the hierarchy.’ - Jeff Bezos
The ultimate digital business has customer intimacy at a global scale, and earlier blogs have explained how -
An interim business can help qualify the potential of a digital business, here.
The importance of timing, clarity, and duration, here.
The three different types of technology and their use, here.
What does an organisation need to assess to determine when, what and where to go digital?
A MARKET or product that is growing/maturing rather than ending. Markets and products have seasons from Spring, Summer, Autumn and Winter. Many are tempted to explore digital when returns are diminishing as winter emerges. If this is decided, ensure that a future season in the Spring wave can leverage any digital legacy.
Why build the world’s best printer when people are environmentally conscious and now working on mobile devices? Document printing companies have shifted their R&D over the last decade from image printing (an industry in an Autumn or Winter season?) to image discovery and creating smart documents (Spring?). Word searches and analysis can improve workflows within a business, reducing the need to print and analyse while saving paper.
A digital offering is not sustained by traditional differentiation (inspired by my study at MIT).
Costs, being the lowest price is not sustainable in a global market.
Brand, in the world of “search” and reviews is not seen as credible as it was.
Relationships, particularly exclusive relationships, are best and partnerships are common. When partnering, consider what unique element you bring and what digital value does this have? The partner with control can remove you if your offering can be replicated.
People/resources can be replicated. Consider this, more engineers graduate in China annually than Australia has engineers.
There are three factors for digital DIFFERENTIATION.
Switching costs and stickiness via the ease of transacting. How much effort your customer takes to commence a service? My mortgage is a big example and smaller ones include my author’s website on Wix and my music on iTunes. I could switch these, but how much value will be realised with it? The latter two already have transaction ease. I can easily post or edit one of the 105 blogs on Wix (I dread the thought of moving these, it makes me sticky) and add new music via Shazam to a playlist on iTunes.
External network, when circumstances force compliance with a service. An example is smart phone network coverage in remote Australian areas and those that work in these areas only have one option. These are rare opportunities and, when identified, must be maximised.
Market share when services can be added to satisfy the customer. Microsoft continues to add capability to software enhancing the user experience. Like their introduction of Skype that evolved to Teams is now displacing other offerings beyond video, such as Slack for workflow.
Developing a DIGITAL offering moves a situation or user from interacting to transacting, from information to collection or consumption to service or product transaction.
Amazon's Kindle application is a good example. The software enables this, and those that enjoy a book's preview can purchase it; plus, those devotees can buy the Kindle device itself.
As technology improves, the cost reduces, and new business models are created.
The capturing of images along a rail corridor was once used for additional visual assessment or nostalgic purposes. As image technology improved and compute storage costs reduced, a digital twins business model was created to manage infrastructure assets. Artificial Intelligence now improves the management of tangible assets by detecting changes, monitoring or modelling data across similar assets. These integrated technologies are now viable and replacing traditional practices on large rail networks.
It is not the availability of technologies; it is their application to the opportunity identified through qualifying its potential. That is the heart of the MaDD model (Market, Differentiation and Digital) within Digital Is Everyone’s Business.