The truth about digital: It’s far more than technology

When we talk about going digital, people naturally hear technology. It’s the single biggest misconception in our work at Mod Op Strategic Consulting. People think the work they need to do is about new systems and software, or hiring developers and engineers to build new technology solutions.

But “becoming digital” doesn’t start with investing in technology. The path to digital starts with re-defining  processes, strategy, and often a wholesale reinvention of the way ideas become products – all to drive customer satisfaction and market share.

Moving from analog to digital

To explain what digital means, it can help to start by imagining the opposite end of the spectrum — what some might call an “analog” organization. Think about catalog companies of the past, mailing out paper magazines to customers every month and requiring them to send back-order forms with a check. Everyone got the same catalog with no customization. And tracking someone’s purchase history might be limited to an index card in a cabinet at the home office.

Contrast this with the power of Amazon — not only to allow endless searching and real-time product updates, but to surface the kinds of products they think a particular customer is more likely to buy (and even to change pricing on the fly).

Consider their ability to run online ads targeting particular demographics or interest groups, and how data can drive decision-making in a way that a catalog company could only dream of.

Sure, it would be silly to claim technology doesn’t play a role at all in the difference between these two paradigms. Amazon has incredible infrastructure and need it to execute their digital strategy. That’s the point: strategy comes first. The technology is there to enable it.

Systemic improvement, not tactical

Digital is a way of being, not a tactical improvement. Even when people understand what we mean by digital business, they can fall into the trap of thinking that mere “digitization” of existing products and services is enough. We worked with one professional association that was still sending out paper materials to members for them to renew each year. Members would need to fill out a 4-page form and send in their payment. Their initial belief was that “going digital” meant moving the form online — word for word, page for page.

After a short time, they started to lose renewals and the initial temptation was to blame the move to digital. “Members must have liked it better the old way,” they worried. But they were missing the point.

A true digital process isn’t just an analog process put on the Internet. You have to rethink from scratch and figure out exactly what customers or members expect in a digital environment, recognizing that we all now get exposed every day to world-class, digital experiences.

Unsurprisingly, members didn’t want to fill out a lengthy form in order to renew, so they stopped mid-way through. We counseled the organization through a process change: get the payment first, and then make the rest optional. Retention rates went back up and improved compared to the old approach.

Becoming digital is not just a mechanical moving of legacy processes online. The digital world is different, and the bar for customer digital experiences has been reset.

Looking beyond the technology

There are many elements of being digital that don’t have anything to do with technology.

First, there’s the respect for data as a foundational business asset, and its integration into everything your business does.

Data has the power to inform your products, pricing, marketing, and every other aspect of your business. We start every engagement with research about customer needs and expectations, about how they interact with your business, their levels of satisfaction, your place in the market, and the gaps you can fill. That validated research provides the data to understand where you are and where you need to go.

Second, there’s the integration across your business. Businesses run as a set of siloed departments with handoffs between them. In a digital business, everything is integrated.

The information flows so marketing, design, and product management are all seeing the same information in real-time and working collaboratively – not just passing along information between them and hoping the big picture ends up making sense.

Third, there’s the cultural piece. You have to make sure your business is putting customers’ needs and experiences at the center of decision making. The customer experience should be embedded into every part of the product life cycle. And as fast as customer needs can shift, as an organization you need the agility to move just as quickly.

It’s only with these elements in place that you can begin to figure out which technology tools can help you execute better. But technology is the last step, never the first.

Even if your products are physical, your business needs to be digital. In today’s world, you simply can’t survive and grow without being a digital firm.

Customers expect self-service, an online platform, and engagement on their terms. Yes, that can require a lot more thought than just investing in new technology. But in the end, it’s worth it.

If you’re ready to start that journey — and know becoming digital is going to involve more than just a new data center — give us a call. We’re here to help.

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