Many companies don’t really understand what “digital” actually means—or, more importantly, what capabilities they need to prosper in a digital economy. In this first of a series of articles on digital, we build an understanding of what digital means to your business, says Jaco Viljoen.
Broadly speaking, “digital” refers to the application of digital technology to all aspects of human society, including business. According to Wikipedia, one passes through three stages on the path towards becoming digital: digital competence, digital usage and, finally, digital transformation.
It’s important to keep this progression in mind because the goal is transformation. Digital may begin with the drive to acquire the necessary skills and then to apply them to the existing business, but the ultimate aim is to do things differently—true transformation. When this happens, new value is unlocked and the business may even change direction, sometimes quite markedly.
For example, consider Amazon. It began by using digital technologies to streamline and improve a long-standing business model, selling books. Over the years, having become adept at digital skills and pushing them into every facet of the business, it has now become something rather different: a sales and marketing platform par excellence, and a fulfilment specialist. Along the way, it has become a pioneer of drone technology and of digital marketing and customer service. Amazon no longer really means books, but a certain style of internet commerce.
In my view, the digital enterprise falls into two distinct parts. One is the strategic, the other is the engine room, in which the foundational digital capabilities are created and launched. At the strategic level, executives are focused on rethinking how to use the company’s digital capabilities to improve current processes, but also how to use them to create new value propositions to both existing and new markets. Ultimately, digital is about unlocking growth for the digital enterprise.
It’s all about the software…
In a very real sense, then, the digital enterprise is its software. Strategy is vital, as always, but now, for the first time, putting it into action is fundamentally dependent on applications in a way it never was before.
Because the digital enterprise is wholly dependent on its software, and the apps it develops are the way it transacts with customers and business partners, they have to be of a high quality as well.
Thus, the engine room of the digital enterprise is the development team, which has to develop and run the software needed to deliver value to customers.
One additional point: the digital world demands speed. The development team thus need to be able to respond to customer demands and new market opportunities rapidly.
In short, excellence in software development has become as critical to success as strategic insight. Does your company have the necessary development capabilities to excel in a digital economy?
Having established what the digital enterprise is, and understood the key role of software development in enabling it, we now move onto considering the eight key capabilities it needs to enable the digital enterprise.