Adopting to Digital is no longer a question that Organisations face. It is not really a choice. It is given that you will have digital influence no matter what you sell or produce. Take Chiquita for example. It sells bananas (perishable product!) to Europe/US , manufactured in its farms across South America. It now offers end-to-end visibility of farm produce to end customer with little code printed on each of the Bananas. It even provides virtual farm tour to whoever is interested, so you will know exactly which farm is producing the banana in your fruit basket.
So far, motivation to Digital is always driven by customers or marketplace models in specific industry.
Hey , my customers are going all mobile and social, so I have to be on Social posting YouTube videos or getting the mobile app out.
I do not think that’s enough argument for going to Digital, it is rather superficial one. Media does not make things better either. Everyday news about industry disruptions or billion-dollar valuations of Uber, AirBNB contributes to the fear in traditional organizations. It also inaccurately depicts that there is parallel digital B2C (Business-to-consumer) model for any type of Industry/market just waiting for disruption.
Organizations typically fall into trap of mass marketing of ‘Digital’. Everyday use of FANG (Facebook, Amazon, Netflix, Google) gives an impression that it is possible to build 100 % digital model no matter what.
It is entirely inaccurate premise to get started about digital.
Digital was and always will be – about ‘YOUR’ own processes rather than existing successful digital models.
Here are the few reasons why.
- FANG (include Uber and likes) were BORN DIGITAL. They banked on internet growth, assuming uber-connectivity and abundance of information about consumers and producers. They never have to deal with legacy from pre-Digital era. They have further grown managing interactions across their digital platforms, that is how they derive value. You do not have that luxury. For you, going digital means taking your legacy to digital era , adapting to new way of doing things. It means that you will always be ‘Digital Hybrid’ whether you like it or not.
- If you are Digital Hybrid company, you have managed to add value in typical ‘pipeline’ model so far. Pipeline model assumes linear linkages between various participants e.g. Factory -> Distributor -> Retailer -> Consumer, with each party adding value within the process.You derived competitive advantage by either owning large piece of value chain or more resources (like more factories or warehouses etc). ‘Digital Natives’ use marketplace model managing interactions between consumers and producers. Now, question is –
Will ‘pipeline’ model be entirely replaced by ‘marketplace (matchmaking) model ?
Surely, not. So, you should not change what you can never be i.e. mimic marketplace model.
- As this moment, majority of action/investment in Digital is around ‘System of Engagement’ – about interacting with end consumers digitally. But, its impact is way too superficial. Digital has much greater potential to improve your internal processes via ‘Systems of Intelligence’ e.g. IOT (Internet of Things) applications in Healthcare/Oil Industries or managing ‘Green’ data centers or warehouse automation like Kiva robots or application of analytics in clinical trials. So, do not get swayed into what everybody else is doing and put all of your eggs in ‘Social or Mobile’ basket. Plan your digital investments wisely.
While there will always be Digital natives in your industry, who does not have to be bothered about legacy, most of the organizations have to go about ‘Digital’ considering legacy transformations in mind. These transformations will be much more complex focussed on revamping legacy systems and organizational changes.
It will be slow and painful to make ‘legacy elephant’ dance to Digital tunes. But there is no other option, is it ?
*Image credit – thechangeblog.com