Skip to content
I can make a hat, or a broach ...
I can make a hat, or a broach ...

The Five Core Components of a Great Digital Business


When transforming into a Digital Business, stay away from technology specifics and concerns about control. Focus on identifying the critical areas of your business that can and should leverage connection, collaboration, and intelligence. (First in a series)

I’ve heard many breathless opinions about the “digitization of business” and “digital transformation”; the wondrous innovation possible when a company fully embraces new technology, and incorporates it into the very fabric of their strategy and tactics.

Lots of opinions, with fancy slide decks and pithy bullet points that, in the end, don’t really say much of anything. Too often they are skewed along a single critical dimension (information that connects you with your customers … data that transforms your products and markets … analytics that let you see the future …) but no concrete plans. Usually, “digital strategy” comes across as a sales demo for some cloud or SaaS offering, an introduction to a major $$ consulting engagement, or maybe a pitch for organizational change as the Marketing group tries to take over IT (or, the IT team makes a play to bring in Marketing).

Or maybe Engineering wants to take control of it all. Hmm, wouldn’t that be interesting …

Five Required Components

If you are developing a digital strategy for your organization, stay away from technology specifics and org chart jockeying – at least in the beginning. When you are talking strategy, you should be describing what you do, where you play, and how you win. The digital part of this conversation must focus on higher level stuff – the value you deliver and the high-level methods used, target markets and customer types, and winning plays that leverage customer relationships and/or critical product features. Focus on identifying the critical areas of your business that can and should leverage connection, collaboration, and intelligence.
Digital Business Sustainability
Once you have your Digital Strategy defined, it’s time to move to Tactics – how will you transform into a Digital Business to deliver the strategy? The implementation plan for a really Great Digital Business will incorporate these functional areas:

  • Internal Operations: Do your teams really understand the systems and processes that automate internal transactions – the details of running your business every day – and use them to their full potential? This covers an amazing range of systems, from the daily and mundane (email, calendaring, basic communications), to accounting systems that tick and tie your order-to-cash, purchase-to-pay, and make-to-ship processes (ERP). Most of us have reasonably mature systems in place for all of this – but our “revolution” here will focus on deeper training, richer data, and integrations with other systems.
  • Customer Relationships: From call centers and outbound marketing efforts, to websites and e-commerce tools that bring products directly to the customer (and return detailed feedback), to CRM systems that help us track and analyze complex market relationships – data-enabled connections can tie us tightly with our customers, and help us grow. But have we connected with our internal systems, to eliminate transactions and speed the value? And can we move beyond transactions, to develop tighter relationships with customers – maybe bringing them into product development or strategic planning?
  • Products and Services: Why limit ourselves to operations and customers? Information about our products, operating in the field, is becoming easier to gather – and is quickly becoming an assumption, table-stakes expectations from our customers and markets. Can we generate new forms of revenue, and deliver differentiating features in our products and services?

In many companies, these three core areas of the business have been loosely connected (at best). But when we tightly integrate with free-flowing, consistent, detailed information between operations, customer service, marketing, engineering, and new product development, all three of these areas will see significant improvements – in productivity, customer satisfaction, and revenue growth.

Okay, a significant step forward – but we’re not done yet. Functional transformation and integration is not quite enough; relying on integrated, consistent data flowing through all systems is one thing, but leveraging that data for insights and opportunities doesn’t come automatically. A really, really Great Digital Business will also target how people work, and how people work together:

  • Data and Analytics: Access is only half the battle; to really get the benefit, decision-makers and influencers will need to truly understand how to work with the data, asking it questions and working out the answers. And this won’t work if you’re going to be like every other organization, relying on a core set of data geeks and report writers for the analytics. High-performing individuals and teams must be able to access and manipulate information quickly and effectively. This has less to do with fancy visualization tools, and much more to do with skills training and intellectual curiosity. People need to take ownership of their data, in every sense of the word.
  • Human Factors – Building Great Teams: It may seem counterintuitive at first, but a deeply digital world relies on people – individuals with advanced skills and learning agility, working in distributed teams across multiple locations, collaborating and sharing in an effective and fluid manner. This is much tougher than it sounds, believe me – there any number of societal factors that must be overcome. But when you crack this code, and bring highly engaged teams together – your buzzword targets (Innovation! Engagement! Productivity! Growth!) will sound less like wishful thinking, more like success metrics.

Your Digital Strategy statement has to explain what you’re trying to achieve, where you will play, and how you will win. But if you’re trying to really transform your company, a Great Digital Business will nail each of these five components:

  • How you work
  • Who you serve
  • What you deliver
  • Using data to your advantage
  • The people that make it happen

In the rest of this series, I will dive into these areas in a bit more detail, but for now – what have I missed? What other components do you think should be there?

This Post Has One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles