Tuesday, September 29, 2015

What does 'Digital' mean?

Understanding the Digital world and the vast possibilities that it brings to businesses, especially to start-ups, has been quite intriguing for me. But with no background in Technology or Marketing and personally being methodology driven, I wanted to start from the basics. And there is no better place to start than to understand what digital really means from a business perspective. In my quest to understand the business definition, I stumbled upon an article authored by one of the Principal’s from the consulting firm, McKinsey & Co.

McKinsey‘s definition of digital is “implementing cyclical dynamic processes and capabilities that evolve based on inputs from the customers.” McKinsey identifies three attributes to bringing this definition to reality:

Creating value at new frontiers: This requires reexamining the entire way of doing your current business and identifying where the new frontiers of value are. This approach could also mean to unlock value from emerging growth sectors and how they might present opportunities and threats to your existing business. Both of these approaches of looking internally or externally, can be easily understood by keenly observing how the customer decision journeys are evolving in the broadest sense, inside and outside of your business or sectors.

Creating value in core business: The second attribute requires an analysis and change to the cultural component of the organization. This requires focus on implementing a mindset that promotes: a) Proactive decision making based on decisions made on continuous intelligence which, delivers content and experiences personalized to customers. b) Contextual interactivity which refers to understanding how consumers are interacting with your brand and using that to improve customer experiences. c) Real-time automation required to help resolve customer problems quickly, personalize communications to be more relevant and deliver customers a complete journey. d) Journey focused innovation refers to being innovative in interaction with the customers. This innovation can introduce existing customers to new businesses, fuel more interaction, create more information and increase the value of the customer brand relationship.

 Building foundational capabilities: Finally it is about the system and data architecture focused on creating two-part environment by decoupling; a) Legacy systems that support critical functions and run at a slower pace; b) Customer interacting systems that support fast processes. And the key feature of the new digitized IT is to build networks that connect devices, objects and people in both of these environment.

For me having a clear definition allows me to understand a commonly shared vision across the industry and how to put that to use to capture value from it. On the contrary, it also helps me avoid tripping up because of lack of alignment and common vision about where the leadership or the business needs to go.

To read the full article please visit the following link: http://www.mckinsey.com/insights/high_tech_telecoms_internet/what_digital_really_means

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