Covid-19 Has Made the Digital Business Model Critical for Everyone
A digital business model need not be complex, but it does need to be thorough, and methodical to maximize and fully capture the value of the digital transformation.
“Many enterprises saw digital as an adjunct to their traditional customer experiences or business processes. Going forward, digital will become the core, and anything traditional will be layered on top.” – Aaron Levie, CEO of Box (from Twitter)
Not so long ago many of us thought that the digital business model was a “nice to have,” as opposed to a “must-have.” That is no longer the case, thanks to COVID-19. What, for some, was going to be a year or multi-year process of building digital capabilities has narrowed down to weeks/months, or in some cases, we’ve seen delivery needed for some clients in DAYS!
The digital business model doesn’t need to be complex, but it does need to be thorough, and methodical to maximize and fully capture the value of the digital transformation. The digital experience can be narrowly framed in two ways for most organizations:
- User Experience: This includes marketing, sales, service, and general client acquisition
- Internal Experience: This includes operations optimization/innovation, employee effectiveness, enterprise alignment, and visibility
In times of uncertainty, like the present, the balance sheet takes center stage. With that in mind, it is critical that the implementation of digital initiatives be segmented in what we call a “speed to value” approach & prioritized by business impact.
The User Experience
Prioritize! What matters most for the client/customer? What is that moment of truth when a business makes contact with a prospect? The priority exercise should be from the perspective of the customer, not the business. Often times we see prioritization based on which business unit screams loudest internally. The digital experience will help your business differentiate – only if you do things differently. It doesn’t have to be radically different. Just different and easy enough to make customers say ‘hmm, this was nice and easy…”
A process for ongoing tests and experimentation should also be implemented, as this is the only way to ensure that the experience continually improves. Take a page from Amazon, and use data to inform interactions and improvements. By simply asking the question – ‘how can I use data to improve XYZ’ – you can establish the habit of using data to maximize your digital initiatives.
Operational efficiencies are the bedrock of internal business experience. The goal in a digital world is empowering executives and employees with tools and information to make smart decisions fast, all while automating manual processes as much as possible – this is what it means to have a digital business model.
Cost reduction is not the only benefit here. Things like employee morale, employee recruitment, and scalability require optimization/digitization within the business. For a coherent internal experience, tools must work together seamlessly – integrations are key. They also must provide reliable data. Internal business units must share data and be able to communicate digitally in real-time. Of course, the life-blood of executive teams is data and must be available digitally (Excel doesn’t count), in an empowering way that allows important questions to be asked and answered.
What To Do Now
Businesses must make some hard decisions now. Many factors are included in the decisions to move toward a digital business model. Among them are resources, capabilities, and budget. Out of these three, only one is legitimate – budget (even this is debatable.) Finding the right partner to augment your current resources and capabilities is the solution to the other two.
Focusing on a speed-to-value approach, prioritizing quick wins, and finding the opportunities for the biggest impact needs to be in the digitization playbook of your company to ensure the best possibility of success.
Angel Armendariz is the Director of Financial Services at Saxony Partners. Connect with him through LinkedIn.