Uwe Michael Mueller, EMEIA Advisory Performance Improvement Leader at EY, on the role of the CIO in crafting strategies that drive customer-centricity
As we all know, digital is changing the decisions that corporate leaders are making and the roles they are playing. Digital businesses drive results from new combinations of resources and enterprises are evaluating how they need to build a plan for the digital future.
That said, a business strategy that works in the digital world might be the answer. As enterprises change business models to adapt to new market realities, they are increasingly establishing new business strategies as the way forward. These new strategies need to include a digital component which helps to maximize business benefits by investing in digital initiatives and programs.
But crafting such strategy is not easy. The rapid pace at which e-commerce has been evolving makes it difficult for businesses to plan for the long term with respect to both demand as well as investments. Frequent change in consumer behavior is also a challenge.
Kick-starting the drive toward digital success
Digital has shifted more control to the consumer and is driving the evolution of value chains, especially in the consumer products sector. Digital considerations are fast catching up and should no longer be something that is limited to e-commerce only. The graphic below shows how digital can affect all areas of the organization, from product development to sourcing, to manufacturing, but also the marketing and sales organization.
So what can CIOs do to help their organisation develop growth-oriented business strategies that are effective and in the digital world?
- Personalizing consumer experiences through mobile: Establishing mobile as an effective marketing platform to help expand the organizations reach to new customers and increase awareness about products and promotional offers. Location-based promotions, personalized hyper-targeted marketing and virtual stores are some of the ways through which this can be achieved.
- Using data from social media to derive insights: Using analytics for insights from consumer data on social networking websites to help understand consumer taste and preference across all age groups; and to help generate value-added insights to drive e-commerce sales.
- Leveraging digital to build brand loyalty: A business model that helps ensure constant connectivity with the consumer will not only contribute to financial growth, but also to loyalty and advocacy. An effective strategy can help businesses move their consumers from being brand-aware and brand-loyal to being brand advocates. Strategies that help build brand loyalty can include brand-specific digital offerings, such as mobile apps and platforms, digital loyalty programs and e-coupons.
- Driving digital in product development: Digital can also be used for new product development as digital product lifecycle management has sometimes been found to be more effective than traditional models. CIOs can help their organizations in setting up in-house digital labs to help promote innovation and experiment with insights. Using the wisdom of the crowd is one way of innovating a company’s products and services, which we have covered in a previous post.
The path to a great business strategy that works in the digital era starts with a business understanding its objectives, and developing short- and long-term approaches that align with its vision through investment in digital capabilities. Most importantly, the digital strategy components of a company should align with its customer strategy. Only this alignment can help companies acquire consumers, address markets, define tactical activities and meet its bottom-line goals.