Personal Case Experience:
Digital Strategy & Digitalization /2
 

The 7 different levels of your digital strategy (DEUTSCHER TEXT FOLGT IN KÜRZE)

For us, the challenge of developing an individual and comprehensive digital strategy for an enteprise should address a number of different levels:

• Level 1: At the basis, there is for many companies still a lot of work to be done in optimizing and digitizing existing core business processes. In many cases this involves technical systems integration with ERP- and/or legacy systems. Actually a vast majority of the "digitalization-projects" that I read about in the recent past still focused on that basic level and could have been easily referred to as "ERP-projects".
   
• Level 2: Then there is the opportunity to profit from a digital enabling of support processes, in order to foster knowledge-sharing & organizational learning from the field. With SHARENET, for example, the digital knowledge-sharing network that my team and I developed for SIEMENS, the company saved over 250 Million Euros per year in the global solution & service business (for which we won the American Productivity and Quality Council Best Practice Award in the 90s.) The "problem" is that most of those support processes are "nice-to-have" organisational-learning processes that do not have explicit process owners. That makes it much more difficult to find the right "Sponsor" for the project.
   
• Level 3: The third focal area should be to leverage digital technologies for creating new customer (service) experiences and fostering higher engagement - at all touchpoints of a customer journey, whether they are physical such as in-store experiences, for example, or purely digital on the web, mobile or voice. This is a very wide field, which ranges from new customer-interaction technologies (such as Voice-based agents, Chatbots all the way to Virtual-Reality or Smart Interactive Screens in stores that supports consultative, contextually-sensitive sales) to entire new service applications with end-to-end processes that provide a substantial new value proposition for the customer. Many organisations still believe that the retail management or marketing should take care of managing and optimizing those customer experiences. I think this perception will change quickly in the future.

If you are interested to explore more about that, then I invite you to read through my article "The luxury retail-revolution: How new technologies will change the retail-service experience", that I have published on Linkedin. You can find it here .

• Level 4: The fourth focus is dedicated to re-inventing your current product & service offering from a digital perspective. For many organisations this constitutes a tremendous challenge, as it invoques adding entirely new (core) competencies to the product development and often also to the after-sales service side. But you will effectively decide NOW whether you will have a place in tomorrow´s "web-of-things" or not. The power, i.e. the value creation and the resulting profitabilities, are being re-distributed in the coming years. So, yes, digitalization will most likely result in a structural change and challenge the competencies and capabilities of your current organisation.

Again, if you are interested in reading more about that, then I invite you to take a look at my article published on Linkedin: "Digitalization of Luxury: eCustomer Experiences & eCommerce or Web-of-Things?". You can find it here.

• Level 5: The fifth focus should deeply address the opportunity for breaking the rules of your business with innovative, disruptive digital business models. Many of the current new models that have been realized are based on changing the cost & price-structure of the industry, making it difficult for incumbent players to adopt those new models. This is actually the "toughest cookie" of all. Of course a newcomer, that has no existing B2B relations with wholesale partners for example, can quite easily disintermediate and therefore disrupt a physical store-based business model with a pure-play online model. In that sense, your legacy structures could actually become your own barriers of entry into the new digital business world. There is no way around it, we will need to develop a smart, pragmatic anwer to that problem or we will most likely be attacked by disrupters. In many industries that means a transition from collaboration to coopetition with your best customers or partners.
   
• Level 6: The sixth level should focus on the gathering, analysis, distilling / synthesis and the action taken on the digital data gathered from all possible customer interactions and key process points of your extended enterprise. This is where new technologies will offer most likely the biggest opportunity for changes in the management of corporations for the future. Data, and even more, synthesized information is most likely the biggest challenger of current power structures.
   
• Level 7: The final, seventh level, should carefully ensure coherence of your digital strategy with your other strategies: corporate strategy, brand strategy, product strategy, pricing strategy, omnichannel / distribution strategy, all the way to your human-resources HR-strategy and the underlying leadership and management systems. Ensuring connectivity on that level is a crucial prerequisite for authenticity and effectiveness. For those of you who are interested, I have also summarized a few thoughts about digital social media communication and authenticity in another Linkedin article.