Saturday, 27 August 2016

What is Digital Strategy?

Our use of terminology forms the currency of communication and understanding, particularly in times of rapid transformation. Therefore the first task is to define what we mean by Digital Strategy. More than 50% of business executives say they have a digital strategy; a Gartner survey has found. What exactly do they mean?

Let’s start with the term digital.  Companies today are rushing headlong to become more digital. But what does digital mean?  For some, it’s about technology. For others, digital is a new way of engaging with customers. And for others still, it represents an entirely new way of doing business. None of these definitions is necessarily incorrect.

However, such diverse perspectives often lack alignment and shared a vision about where the business needs to go. This often results in piecemeal initiatives or misguided efforts that lead to missed opportunities, sluggish performance, and false starts. There must be a clear and common understanding of exactly what digital means to develop meaningful digital strategies that drive business performance.

It’s tempting even for us to look for simple definitions, but to be meaningful and sustainable, digital should be seen less as a thing and more a way of doing things. To help make this definition more concrete, we’ve broken it down into three attributes:

  • Creating value at the new frontiers of the business world,
  • Creating value in the processes that execute a vision of customer experiences, and
  • Building foundational capabilities that support the entire structure.

Strategy is, of course, a plan of action or policy designed to achieve a major or overall aim.  It’s the art of planning and directing overall operations and movements. At its core, the essence of strategy is choosing a unique and valuable position rooted in the specific activities a company performs.

Repeating the past is no guarantee of success, therefore understanding the direction digital strategy is headed is paramount.  At the highest level, there are two options available. The first calls for extending digitization by repeating the current digital playbook to cover new functions and processes.  Transforming activity, and therefore the business, is the second option for digital strategy.

Experience changes our understanding. Digital is more than a set of technologies you buy. It is the abilities those technologies create.  Digital Strategy is therefore about transformation, and human performance is at its core. This enhanced human performance creates value that leads to revenue.

Thinking of digital as a set of technologies (analytics, big data, mobile, cloud, social, etc.) limits the digital potential of the instrument rather than the application. A smartphone, for example, has information intensity and connectedness, but it requires applications to transform value and disrupt industries. 

Every business is a digital business in the sense that digital transformation represents the next frontier of high performance. Everything is possible with digital technology, but a digital business and digital leadership must know how to separate what is possible from what is profitable. That difference extends a premium to the business – a digital premium. And finding this digital premium is the job of the Digital Strategist.

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Written by Andrew B. Giles. Andrew is the head of digital innovation and strategy at Goodbuzz Inc. You can follow him @Goodbuzz and on Facebook
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Goodbuzz is a digital agency based in Toronto, Canada. We help brands create and capture value from emerging trends in technology, society and the workplace. We prototype the future - and believe the best way to predict it - is to create it.  Follow us on Facebook or Twitter or if you have any questions contact us directly.