This week, my blog post on Agile IT Governance (and related topics) reached the magic 10,000 unique downloads – in 89 countries across the globe. I am very thankful for the interest in my blog post and for all your comments and feedback. Your interest in my blog and your interaction provides motivation for me to continue writing. Thank you!
Each week, I get a couple of question from readers asking for advice. Thank you for sharing your questions and concerns. Many questions are quite generic and I make an attempt to answer questions in this open forum (keeping contributor anonymous). If you have any questions or concerns, please feel free to send them to me. Here we go!
“The CEO has asked me (senior IT manager) to develop a Digital Strategy for 2016. What does digitalization actually mean and what is included in a Digital Strategy? There are many articles out there with mixed messages and different structures – what is your view on Digital Strategy?”
Thank you for sharing your concern with the Digital Strategy with the blog post audience and me.
The idea of having a Digital Strategy is quite new and today, I would say, there are no mature frameworks for developing a Digital Strategy. What we need to understand is that a Digital Strategy differs from an IT Strategy in its purpose and goal. An IT strategy is designed to define how IT can optimize business value and competitiveness leveraging IT capabilities. The Digital Strategy, on the other hand, focuses on optimizing customer experience, in the digital arena, utilizing and coordinating all corporate capabilities. The Digital Strategy is therefore fundamentally not an IT responsibility in the company – and should not take the starting point from IT. It is a document that should be developed together with other functions in the company (for example, sales & marketing, HR, IT, production, R&D etc).
Digitalization is a huge topic to cover in a short blog post, but in a nutshell, it is all about how IT is integrated in our everyday life, and influence and changes the way we communicate, interact and consume. We see that increased digitalization also removes barrier and boundaries in business making it easier to compete from other geographical areas or markets, with new business models and quickly impact industries with new innovations. But digitalization is not a destination but rather a continuous evolution moving quickly and in an unpredictable way. We don’t know where digitalization will take us.
One of the key dilemmas with increased digitalization is that the pre-requisites for the market and industry changes rapidly. The way we built and sustained market shares has changed fundamentally. Therefore, many corporations apply agile methods for development and governance to fast adapt to new changes in the market – often with great success. Today, all companies are more or less digital companies – and the most agile company will win in the digital future.
Coming back to the Digital Strategy. My point of view is that a Digital Strategy needs to take its starting point from the customer and its changing behavior. How is customer experience created? What triggers the customer to recommend your products and services in the new digital economy? What capabilities do you have to meet the changing customer needs? It is generally not an IT issue but rather highlights the need for different departments (such as IT and Marketing) to team up to create the best possible experience for the customer. In the end, digitalization of a company is about embracing change, cooperation and motivating people. These are the topics that the Digital Strategy should address.
My recommendation is to include a number of sections in the Digital Strategy to define how the company is going to deliver customer experience.
- The strategic position in the industry ecosystem (understanding key trends, customer behavior, innovators, competitors, influencers, etc)
- A hypothesis of how the market works and how to be successful in the market (own your own analysis).
- A common vision, principles and themes with all key functions in the company (not only IT) to align the value chain towards customer experience.
- Principles for an efficient “way of working” – for daily interaction between all the key stakeholders in the company.
- Engage all employees in the journey to digitalization – focus on self-governance and allow time to reflection and learning.
- Performance metrics to track customer engagement and satisfaction.
- Challenge your strategic position and market hypothesis every 6 months!
There are obviously experts in Digitalization that can help you in developing a Digital Strategy. My conclusion is that you need to be understand (based on your own analysis) what digitalization mean for your company, how your company is going to be successful and engage with customers. Do not attempt to copy someone else’s strategy (it will not work) but develop your own.
I hope that this short blog post helped you on your journey to understand digitalization and develop a Digital Strategy. Please do not hesitate to contact me for more advise on digitalization or Digital Strategy.