Digital is the new trend taking to next level
Digital refers to a set of technologies changing people, customers, industries, companies, products and services. Digital technologies include mobile computing, social media, business analytics, big data, cloud, sensor networks and the like. These technologies have been coming ‘online’ over the past five years and are reaching a critical mass that is changing business.
Digital changes business because it makes customer and business resources information intensive and connected. Digital technology applied to people, equipment, information etc., creates opportunities that were either impossible or uneconomical in the pre-digital world. The result is a wave of changes that increasingly face executives and corporate leaders.
Digital creates new business logic by changing customers. Customers change business priorities and values from inside-out to outside-in. New ways of thinking evolve the business and technology relationship and new demands for future success. That is why digital is changing business.
Digital is changing customers at the start
Digital technologies are customer oriented technologies. Prior technology was process oriented and transaction focused. Digital technology builds on top of transactions to concentrate on information and relationships. This is a fundamental reason why digital changes business. This change is often overlooked because it disrupts everything, but the logic is simple. Technologies that change customers revolutionize business.
Digital customers are different. According to our own and other research studies, digital customers are better informed, more demanding, more discriminating and more likely to change products and services when they have a poor experience. The result is a multi-trillion dollar annual growth opportunity created as customers switch products and services.
Digital customers represent the future. Digital is where customers expect you to be and where they look for your products and services. Customers expect you to have a presence at the time, place and context of their present need, else the business goes to someone else.
Customers define business on their terms
Business is a voluntary exchange, particularly whenever customers have information and choice. Customers have both in the digital world. This creates an ever changing digital economy with few incumbents giving leaders ability to redefine value and success provided those definitions start and end with the customer.
Digital is finishing what the Internet started. E-commerce pricing and product transparency is evolving into contextually heavy business services, consumerization and disruption. Digital is where business will be in the future with more than six billion mobile phones, billions on social media, and trillions of dollars in the online economy.
Digital customers are not objects in the business models. They are the subjects of their own story where you provide the actions (verbs) that lead to value. Just as our parents ‘xeroxed’ copies or “fedexed’ packages we will use new verbs in the digital world beyond googling, tweeting and facebooking.
Executives can no longer work from the inside-out telling people what to buy and remain effective. Digital business leaders recognize that digital turns the world outside-in.
Business must change its perspective and think from the outside-in
Business must change the way they think, act and learn in a digital world. Inside-out thinking provides clear plans and paths for growth and results as executives see the world they want to see. Executing inside out strategies guarantee success so long as the world works exactly as planned. Learning inside-out means avoiding failure and not learning at all. If a career marked by four wins and zero losses is better than one with eight wins and two losses then you live with the limitations of an inside-out perspective.
Think outside-in, start and more importantly finish with the customer. Use analytics and experiences to see the world for what it is. Act by placing emphasis on customer experience, their value and engagement. Finally, learn by recognizing customer and market dynamism values and applying the lessons of missed plans to create a better future.
Outside-in thinking changes the relationship between business and technology
Digital Business represents a radical revolution in the relationship between business and technology. Business and technology had a linear relationship. Business stated requirements and technology built to those requirements thereby enabling the business. Today the relationship is bi-directional and dynamic. Business still has requirements. But more importantly technical innovation creates new opportunities resulting in an iterative dialogue rather than a requirement specification. Evidence of this change is everywhere in IT from calls for shorter cycle times to agile development methods.
Business used technology to execute its processes in service to the customer. Now, customers use technology in service to themselves. Customers incorporate products and services at will and to meet specific needs. The shift is dramatic and revolutionary. We cannot call them ‘users’ any longer. They are people with technology selecting based business services rather than following IT enabled business processes.