Digital is a fashionable word today in the context of the use of “newer” technologies. In the conferences, webinars and meet ups that I have participated in the last two years, digital has been the buzz word around many presentations. For the longest time, to many of us in technology and engineering, digital simply meant data expressed as a series of the digits 0 and 1, typically represented by values of a physical quantity such as voltage or magnetic polarization. If you ask the question “what is digital” to several people you engage with in business and technology, chances are, you will get varying answers and perspectives.
In the SAPPHIRE technology conference of SAP that I attended this year, the company unveiled Intelligent Suite. They presented a roadmap that did not resemble the roadmap to which we are accustomed. The presenter said that many of their partners have started building industry digital business blueprints that can be applicable to different industries. More often in the past, when software companies launch something, typically they are in the form of or focusing on software packages, applications and platforms. Here the focus is the digital blueprint. I will use this to point out the meaning of digital as it is being implied today. Digital is not the application systems and not even a platform. Digital is not a “thing”, it is not a role, it is not a program– digital is a way of doing business.
If digital is a way of doing business, then what does digital transformation mean to a company. For some businesses, digital allows consumers to have a personalized experience by touching, feeling and understanding products and services. This means understanding customer behaviors and being closely attuned to how customer decision journeys are evolving. USAA did this by using their customers’ life events as the basis of its business architecture design. By integrating its previously separate insurance, banking and investment products around customer life events, USAA was able to deliver a superior customer experience. Essentially in this digital transformation, USAA was able to change their business model from a provider of insurance and banking services to an omnichannel business. They can “own” the customer relationship and create multiple products to address life events. USAA needed more knowledge of the customer as a key capability for this new “way of doing business” to work.
Another company who successfully transformed their “way of doing business” is Aetna. Aetna’s digital transformation allowed them to be a full-service destination for its customers using an integrated platform approach. This allowed the company to shift from a B2B health insurance model to a complete solution.“When we have an integrated, functional health care system that focuses on the chronically ill, on promoting wellness and on payment reform, we will have a system that works and we will have a healthier world,” Aetna Chairman, CEO and President Mark T. Bertolini said.Essentially, Aetna transformed themselves from a healthcare insurance provider to a healthcare platform. By doing this, they became the destination of choice using superior customer experience. From 2009 to 2014, Aetna increased its revenue to more than three times the industry average.
The new “way of doing business” may require transformation in other areas of the business and not just in frontline customer facing capabilities. The advent of digital manufacturing, machine learning, blockchain, intelligent supply chain, and artificial intelligence (A.I.) allow consumers to personalize the design of the products they want based on current trends. As brands in the future will be mainly shaped by consumers, digital as a new way of doing business puts the customer as the point of focus. I personally have difficulty buying shoes that fits me comfortably because I undoubtedly have wider feet than most people. Thanks to NikeiD Custom Shoes, I can now customize my shoes online and have it delivered to me. It is not only the size of the shoes that I can customize, I even have my name on it!
How digital is changing “way of doing business” is but a logical consequence of what is happening today in modern applications and emerging technologies.
Digital transformation is not really about technologies. Existing digital technologies are accessible to all companies. The key is using these technologies to find value at the new frontiers of business. Being digital means not being afraid to use emerging technologies to solve business problems. Being digital requires being innovative and pushing the boundaries even on areas where success is not guaranteed the first time. “Learn fast and then just move on and find a different way to solve the same problem”, says Bharti Airtel’s Global CIO Harmeen Mehta, winner of the 2018 MIT Sloan CIO. Innovation and transformation are the means to achieve a digital business model using existing and emerging technology platforms. Digital is a shared responsibility between business and IT. There must be convergence of business and IT to drive successful and sustainable digital business transformation.
3 thoughts on “Digital is “a Way of Doing Business””
You are exactly right. It is a new way doing business , creating personalized experiences that create lasting relationship with the product. It’s not a magic bullet. Without a business strategy, technology will not do any transformation.
Great post, thank you! The USAA example is very relevant.
I remember when the early Internet and “e-commerce” represented for some a new “way of doing business.” As consultants, we would work with a company’s leadership team to “hack their business.” If they were a start up in the digital age, how would they compete – what business model and what operating model? A lot of great learnings, interesting insights and even some new businesses came our of several good years running these sessions!
You are right Vaughan, digital disruption brought by Internet, mobile and e-commerce was kind of the same thing. This is why digital transformation for sake getting into emerging technologies is not the right approach. It has to begin with business model and operating model orientation and I like your term – “hack the business!”.