According to Forrester Research, over 70 percent of the companies that were on the Global 500 list 10 years ago have vanished.
Netflix killed Blockbuster. Amazon killed Borders. The iPhone killed Polaroid. Digital innovation is no longer just a way to differentiate against your competitors, it is a fundamental disruption to everything in modern business, transforming how we market, sell and support our customers. Digital helps us deliver increased revenue and better customer satisfaction, while lowering costs and improving margins. Every business process is being radically transformed by digital and successful companies understand that to compete, they must think “digital first.”
But, many large organizations are doing it wrong. They’re adopting digital the wrong way.
Bolt On Solutions Don't Cut It
Forrester recently came out with an interesting study which examined how companies implement digital strategies into their business. The report cited that many CEOs prefer “bolt-on” digital tools instead of full digital “transformation.” Basically, these CEOs are adding digital onto existing business practices, instead of adopting comprehensive new digital business practices from the get-go. Companies that take the bolt-on route fail to align marketing and technology management on a united path, ultimately impeding their ability to compete.
Instead, companies need to be focused on full digital transformation. Digital Darwinism, the failure to adapt to digital disruption, has toppled giant enterprises in the past -- just think back to companies like Borders, Blockbuster, Polaroid or Circuit City.
Digital Transformation Requires a Full Commitment
Full digital transformation is the best way to avoid a similar fate. This transformation enables businesses to scale by automating processes, analyzing and using big data, and increasing their economic viability. Take a look at Gartner’s recent thinking on digitalization, a rallying cry for the transformation of IT to be better aligned with the needs of business leaders.
And it’s not just about marketing. Too many companies mistakenly focus solely on digital marketing, not digital optimization. In reality, digitalization has a far broader impact to business. Companies need to think bigger to digital customer support, new digital revenue streams and digital services replacing formerly human-heavy processes. It’s about using digital to deliver maximum impact in all business areas.
Digital Business Optimization is even changing how large enterprises structure their C-Suite, and carving out new roles for technology executives. Gartner reports that the CIO will lead the charge of digital innovation and change in businesses. Gone are the days where CIOs are solely responsible for managing back-office technologies. They will be major players in digital transformation, leading important conversations about how to integrate the cloud, analytics, social technologies and more into all aspects of the business including product development and marketing. Smart companies are all in, realigning their executive level structure to fully embrace digital transformation, and prepare for what’s ahead.
Businesses are at a crossroads. The digital revolution is forcing companies to evolve or face obsolescence. It’s not enough to adapt digital strategies into your existing business practices, but rather adopt your business practices to accommodate the age of digitization. From restructuring the C-Suite, to adapting new ways of managing human-heavy processes, opportunities to get in front of digital transformation are everywhere you look.
Title image by Everett Collection (Shutterstock)