Gilberto Lozano, Mexico Strategy Leader – Performance Improvement at EY talks “Going omni” and three other topics CIOs need to keep in mind when creating a digital strategy.
We live in the era of digitalization. The merger of the real and the virtual world, together with business intelligence and technology, have impacted how business is done. Digitalization is rewriting the way companies are approaching the market and, as a result, the rules of competition.
Many companies consider their “digital strategy” to be the introduction of e-commerce and the usage of social media, mobile applications and cloud services. They are creating strategies and procedures that result in digital copies of the real world’s business models and processes. In doing this, these companies are falling into the trap of thinking that an IT strategy is a digital strategy, e.g., introducing devices such as smartphones, tablets or applications to replace catalogs, or using social media and applications to replace traditional marketing and sales efforts. While this may prove efficient, it results in a greater commoditization of the digital channel and, hence, drives only a small amount of associated profit.
To be profitable in the virtual world, companies need to create a real digital strategy. CIOs can assist by transforming processes, business models and customer experiences through the digital connections between systems, people, places and things. Creating a digital strategy isn’t going to be easy for the CIO, because companies still generally assume that investment in technology consumes resources and yields very little profit.
But to set up a successful digital strategy, CIOs can start by considering the following:
- Learn from the best. Convince leadership to invest in a digital strategy by introducing them to role models or case studies of businesses that have invested significantly in technology and outperformed peers as a result of having created sustainable digital strategies that are aligned to the corporate vision and goals.
- Consider “going omni”. Increased adoption of omnichannel has triggered the greater use of technology. E-business has become a strategic ally for most businesses. Getting companies to implement omnichannel and e-commerce can go a long way to improving revenue.
- Support the many voices of the customer. Today’s consumers are relying on online information sources, rather than on advertisements, to make purchase decisions. By developing strategies that enable company representatives to have an active social media voice and engage with their customers, CIOs can contribute to influencing consumers’ buying decisions positively.
- Be the expert. Trends such as the internet of things, the cloud, risk-based security, and advanced pervasive and invisible analytics are pushing for digitalization across all aspects of the physical world, and are resulting in an increased emphasis on serving the needs of the mobile user in diverse contexts and environments. It will be the CIO who’ll have to educate their business on leveraging these tools to boost bottom lines.
While keeping these points in mind, CIOs need to start with a diagnosis that considers the company’s current capabilities and their clients’ experiences. They then need to conduct an evaluation of their company’s technological demands and create a business case in order to justify the investment. Next steps would be to define the digital strategy architecture; implement a road map; and oversee the roll-out of the business case that should be aligned to the corporate strategy.