Change is difficult. Evolution takes time. Outputs are relative to effort. And as with many mid to large-scale organizations, the ability to adjust and adapt to the new, faster-moving digital economy presents a clear challenge across the board. The speed of business today forces us all to react to the immediate needs in front of us, while not at the expense of the plan ahead.
Adapt or die may be an overstatement, but in the digital space, especially if you have an end-consumer business model, time is of the essence. Consumers are adapting faster to modern technology platforms and devices than the corporate organization’s ability to keep pace. The result of this is a digital delivery gap, where consumers are rapidly developing new behaviors and increasing their digital engagement expectations (literally) on a daily basis.
Without question, many organizations face a number of inherit functional barriers (i.e. legacy business models, regulatory compliance requirements, complex operation and delivery systems etc.) that make change difficult (and in many cases costly). The focus of this post is around the non-functional, attitudinal barriers preventing the organization from becoming digitally mature.
Expense vs. Investment
Unless your business is founded by a digital construct (think Amazon), the digital aspect of the business is often considered another annualized line item in the expense column of the balance sheet; seen as an operating cost, or a marketing expenditure for that particular fiscal year. The digital elements that directly or indirectly run your business are better to be seen in the same manner as a traditional capital expenditure (similar to a renovated office, a new fleet of vehicles, or updated software and hardware) – an investment in the future earning stake of your business with a return beyond the taxation benefit. Beyond the accounting definition, we see digitally mature organizations focus on the long-term value of a digital strategy rather than the short-term “costs”.
Beyond the required physical elements of digital (i.e. desktops, laptops, mobile devices, enterprise servers, mainframes, cloud services, hard-wired networks etc.), the human resource element is critical to the future digital success of any organization. Companies that place the same level of importance against their staffing model as they do toward the technology available to them tend to gain the most from their overall digital strategy.
Businesses are a sum total of their people. As any human resource director will suggest, attracting the best people you can afford, with the right aptitude and skills for the job at hand is paramount in delivering value for the organization. This is especially critical for resourcing digital positions, as the space becomes more complex and sophisticated. It’s simply not enough to hire that “social media guru/ninja” to effectively govern your social media approach, or have the company “webmaster” be responsible for your overall web/mobile platform strategy. Digital is a professionals’ game now, it’s become serious business with too much at stake. Consider that a large share of leading organizations – from retail, to travel, to financial services – have been built in the digital economy, disrupting traditional businesses that are now in a sink or swim position. These traditional organizations need to adapt and compete on a level playing field, and that starts with recruiting top talent from the same pool as their digital counterparts.
Goals and objectives are sometimes hard to define when the challenge or opportunity is not completely clear. The right goals and objectives are even harder to quantify. In many cases, digital projects (and campaigns) will/should have KPIs (Key Performance Indicators) as part of the mandate. While KPIs are indeed essential to track whether the digital investment is performing to immediate expectations, another key measure tends to be missing in the equation. The KBI (Key Business Indicator) – the accurate measurement in how the digital project performance tracks against longer-term business performance.
The KBI conversation surrounding the digital project goals is essential to maintain the investment of the digital property in play. It also aids the project lead in selling through/up the organization the real business value of the project. As with everything in the digital environment, performance is quantifiable. At the senior management level, digital planning activities should be in line with business planning activities.
In some cases, the value of a digital initiative may take time to validate. A customer-facing platform requires time to build an audience, and once it’s up and running, metrics will show what needs to change to increase its performance. An internal initiative, like an employee portal, could require onboarding across a large organization – typically no easy task. Planning how you’ll measure is as important as what and when you’ll measure. Giving things time to gain traction is an important part of the process.
Take your (typical?) website for example. Elemental KPIs may focus on traffic (visits) to site, time on site, page views, various immediate conversion metrics etc. The business measurement (KBIs) layer on top of these metrics may be found by measuring cost per customer acquisition, increase in average order value, customer service cost reduction percentage etc. Your measurement strategy should go beyond simple metrics and track progress against how each digital initiative, or your digital strategy in general, helps to move the business forward. This is Post 4 of 6 in our Digital Maturity series, as we look to provide insight into an organization's ability to leverage digital to drive business strategy. If your company is beginning to explore the digital roadmap ahead, reach out to us to see how we can help.