Transforming Business Operations for the Digital Enterprise

When it comes to digital strategy, the website has captured people’s imagination. Customers and their experience is critical to the success of your business but that is not the sum total of all things digital – there is a whole organization that must enable this experience and more importantly, there are other aspects of your business that are as critical in their own right. Business Operations, for example.

This week, we continue our journey into digital transformation with an excellent discussion on the implications and impact of digital transformation on company operations. CIOs must understand why operations are critical to the success of a digital enterprise. What areas need focus? How to go about digitizing operations?

e-Book: Digital Strategy and Enterprise Operations

Developing A Digital Strategy

A digital strategy is more than a business strategy for the internet. It is different from an IT Strategy. So, what is a digital strategy and how does one develop it? how does one effectively implement it? That is the topic of the e-book that we are referring you to this week. Experts share their views on the creation of a digital strategy in context and with examples. Excellent resource for the CIO who wants to morph into a digital strategist.

Download Developing A Digital Strategy

Changing Organizational Culture in Support of Digital Transformation

Of the three, people, processes, and technology, perhaps the toughest to change is: people. Regrettably, business transformations pay the least amount of attention to this biggest barrier to change. Organizational culture drives people – what they believe affects how they act. Your best laid out plans are worthless till your team executes on them with all their energy.

Digital transformations by their very nature upend the “usual” – often, in every way possible. People who, by our very nature, are averse to change resist this massive change with all our energy. How should a business leader overcome this resistance? How should you divert this energy away from resistance and in the direction of the intended transformation? This week, we are referring you to an expert led discussion on the topic.

e-Book – Digital Transformation and Organizational Culture

Executive’s Guide to Digital Transformation

The driver(s) of change and the appetite of the target both determine the best approach to business transformation. Transformations can be as simple as adapting or as drastic as reinventing. A business leader must weigh key factors to determine the approach best suited for their circumstances.

This week, we are referring you to an excellent discussion on the imperative for digital transformation, the key considerations in this journey, and advice on navigating these choppy waters.

Executive’s Guide to Digital Transformation

e-Book: Artificial Intelligence and the Digital Enterprise

Digital Transformation is the imperative for businesses across the board. The question is: what role does the CIO play? As we discuss that question, we cannot let our eye off the ball with an even more pressing question: how to create a roadmap for digital transformation? Fortunately, there is a wealth of good analysis and advice.

This week, we start a series that covers the key aspects of the digital journey. CIOs can use this to understand what is happening around then or better yet take the lead in creating a roadmap for Digital Transformation for their enterprise. The first question answers itself!

Our journey starts at the intersection of a key technology and digital disruption namely, artificial intelligence. AI is turbo charing digital disruption and it is a must for CIOs to understand its impact on business – from models to implementation and everything in between.

e-Book: Artificial Intelligence and the Digital Enterprise 

e-Book: e-Business Operating Model

Digital transformation involves strategy but without implementation any strategy is meaningless. An operating model helps connect strategy with implementation so it is absolutely essential for a CIO to understand how to create an operating model that delivers superior value to the business. Toward that end, this week, we are referring you to an excellent discussion on operating models with a focus on digital transformation.

e-Book: e-Business Operating Model

History of the internet

When was the internet invented?

So, when did Al Gore really invent the internet? Apparently, 1962!

Came across this very interesting article (and website!) that lays out the beginning of ARPAnet – the precursor to what we call the internet (or interwebs if you have an MBA from Harvard 😉 ).

“This Internet Timeline begins in 1962, before the word ‘Internet’ is invented.”


eStrategy: Your Mobile Technology Strategy

Working from home? Great. Now, think about the slobs who are schlepping their way to the office – coffee mug and newspaper in hand but resentful of the image of you in jammies!
Our focus on technology driven strategy often stops at the technology – we neither get a strategy nor intended results. Business impact analysis is a must in any strategy but that is not why we are here today. We have more interesting things to ruminate!
In this age of the internet – globalization is upon us. Location independence is the imperative. So you have also jumped in. It used to be Fridays to work from home but now it is always work from home. Ubiquitous connectivity cost sales people their offices – why waste money on real estate when the slob can work from his car? Neelesh in India – who goes by Neil to his US customers – is on your team and you don’t even miss a beat. It is as if he were next door.
Yes, we live in a connected world where we work with people across the globe but do not know our neighbor’s name. The workforce is mobile and proudly moving ever faster. Business I booming and we will all live happily ever after. Thank God almighty, we are free at last!
Unfortunately, we live in a world whose underlying and most enduring principle is equilibrium. Like a pendulum, everything that moves too much to the right, has a counteracting force that brings it all the way to the left. Then back and forth till all energy is dissipated and the pendulum stands still. There is one eternal truth and this is it.
So the forces that drive mobility – 24×7 ease of business – are being countered by other forces – we have just not acknowledged them yet! Are these forces powerful enough to get us to mobile equilibrium? Time will tell.
So what are these forces? For starters, people who work in the office are resentful of the people who work from home – they are more likely to be dissatisfied with the company and leave.
Then there is the issue of collaboration. How effective are you leading a team over the phone? Don’t know about you but I am comfortable with the remote model. However, I have to see people once in a while. The team has to get together, in person, often. The bond that develops when you occupy the same space; go for that dinner while working late on a project just cannot develop talking to someone over the phone.
There are many more issues. The move toward greater mobility is undeniable – it will happen no matter what I say. However, your strategy should not just focus on the technology challenge. It must factor in the human challenge and its impact on business results.
Remember, we are all connected and so is everything else in business!

eStrategy: You are welcome; but you not so much!

Whether you like it or not, you are living on the “animal farm.” Is it time your eStrategy reflected Orwellian thinking?
Strategists often focus on web traffic and for good reason. However, not all visitors are created equal – some are more equal than others. So a single minded focus on traffic without analysis of specific visitors is, more often than not, a wish and a prayer not sound strategy.
Before you spend time and energy, not to mention shareholder dollars, barking at the moon, think!
Organizations spend a lot to get traffic to their website. Advertising dollars are spent; websites created; systems integrated without thought on how they will generate value. In a business world driven by “differentiation” we fail to differentiate between visitors. In an attempt at customer service we serve everybody – the same way.
This futile attempt at getting value from the web drains dollars and delivers disappointment. But there is a more dangerous unintended consequence – we tick off our “valuable” visitors. For they visit us to be served and we fail to serve them properly with our “socialist” eBusiness model where everyone is served the same way. Our message is not focused and the net is that we do not convert visitors into “maximum” dollars – again, a single minded focus on converting “visitors” into “customers” without regard to how much value each customer delivers to our bottom line comes in the way.
Here is a simple rule of thumb: each visitor delivers different value to your business. Apply the 80-20 rule with the zeal of a bigot. Differentiate between visitors and make it obvious. Go to the extreme – actively engage valuable visitors and push, yes push, the less “desirable” ones to your competitors. Believe me, they might not like it but they will understand. They live in this capitalist society too!
Your business model dictates which visitors are more valuable than others – check your levers of competitive advantage to make sure. If a customer visits often and buys nothing then you are better off without that traffic. If they visit often and call more then get rid of them. If they buy lots then provide means to give them personal service. If they buy higher margin stuff then put a bow on the package – if you know what I mean!
Be Orwellian, without shame or guilt, and modify your customer service mantra – all customers are created equal but some are more equal than others.
Go after valuable visitors with your advertising, but more importantly, with everything that your website, nay operations, are all about. Valuable visitors should feel welcome. They should want to interact with you. They should want to buy more from you. And this should be evident from every aspect of your existence not just your website.
Know what they want and deliver it. Ask them if they liked what they saw – passionately kick out what they did not like. Ask them what more can you do for them and deliver it.
Analyze visitor traffic to isolate which ones are more valuable than others. This analysis should start with web log analysis should not end there. An integrated capability – again, a data warehouse is an important component of this capability but not an end all – that separates the wheat from chafe is critical to your success.
If you do not have this capability then you are still playing in the little league. Expect pee wee results. You deserve them.

The Broken Promise of Disintermediation

Disintermediation was celebrated as the biggest gift of the internet. Did it turn out to be all that it was made out to be?
One of the key innovations of the internet was disintermediation. At least that is what the pundits wanted us to believe. Take out the middleman and voila – profitability will get an unbelievable boost.
So what are the results?
Amazon.com took almost a decade to become profitable. Is Barnes and Noble dead? Well, all they had to do was to launch their own online store and give Amazon a run for their money. To the contrary, I believe Amazon would not have been around had they not modified their business model. They added other stuff to sell and then added other features like auctions and advertising etc. to survive. Now, they are profitable because they continue to innovate.
Did Travelocity and Orbitz knock off travel agents? Are all travel agents out of business yet? Admittedly, your corner store travel agency has “gone bye bye” but travel agencies in general have not. A spate of consolidations and change in business model later, travel agents are bigger and more profitable than ever.
How are our airlines doing with the profitability boost they got through this disintermediation? Not so good. The offline evil has been replaced by the online one but they still need “travel agents.”
Are cars sold online? Dealerships should have vanished by now. Have they? Some of the survival of the car dealers can be attributed to the legal protection they enjoy. But most of it has to do with customer preferences. It turns out that people still like dealing with people and people still like service. And cars cannot be serviced online.
How are insurance companies faring? Insurance agents all doing real estate? (real estate would be a bad career choice in this market in any event!) Not quite. The pesky insurance agent is still around pounding the pavement carrying their handy dandy briefcase full of safety and security for you. Not gonna change anytime soon.
So what are the lessons from this apparent disappointment?
1)      Online selling is not as easy as putting up a website. The old rules of customer engagement still apply.
2)      Disintermediation is not for the faint of the heart. It requires creative destruction to succeed. That is, you must destroy – or significantly change – your current business model to succeed. Insurance companies do not have the guts to do it. That is why the market is ripe for new entrants who do not have the baggage of a distribution network to dismantle!
3)      Disintermediation is not a stand alone strategy as advertised. Your distribution strategy should be multi-channel. Some companies started as pure plays and then went brick and mortar. Brick and mortar should actively consider going online but not by demolishing their existing channels
4)      Take every technology “flavor of the month” with a pinch of salt. The world of business turns on solid and non-negotiable fundamentals that still apply and will apply for the foreseeable future. Technology can make a dent but fundamental shifts are few and far between.
So please stop selling disintermediation as a panacea and stop blaming your website functions and features for the lack of “disintermediation” and start thinking in business not technology terms. It is time to get back to the basics of value chains and customer demographics/psychographics.
You see, this is yet another reminder that eBusiness is not IT. Not yet.