Every market and industry is digitalising, albeit at different paces. It’s only a matter of time until your products and services will also need to contain a significant digital component. Inevitably, self-service will replace tedious processes, routines will be automated and the customer experience continuously improved. From this self-evident vision follows the strategy: how do you become the tech-first organisation you need to be today and tomorrow? To look ahead, it helps to understand how the placement and importance of technology within the organisation evolved.
Running the systems
By the early 1990s, computers were advancing in both hardware and software. The complexity and novelty of the technology required on-hand expertise in the form of an IT department, typically placed under the CFO. Its focus lay on optimising operations, cutting costs and mitigating risks. With the spread of ERP systems from manufacturing to other businesses and departments, the CIO role got a foothold.
Business functions like sales, accounting, engineering and HR became connected to serve a single source of accurate data. Without IT fluency, technology and operational systems were inaccessible. But while the importance of IT and the CIO role grew, the IT department was often kept aside, both business-wise and physically, at a different location. Even at the heart of the business, the relationship with IT was one of supply and demand.
The rise of digital
Then, in the late 1990s, the internet brought new ways of computing, storage and of course, communicating. Cloud and SaaS emerged, together with e-commerce and online marketing. In a rapidly digitalising world, everyone could access user-friendly tech tools online with any device. This changed the irreplaceable role of IT as the sole keeper of technology into the organisational guide for adapting to the increasing scope of technology.
A new force arose, called digital. At first, because of its speciality, expertise was sought externally. Then, small digital departments developed, leading to a bigger approach within large enterprises where business units functioned as separate entities for developing business online. Often, a central innovation team contained all the digital initiatives. More digital teams came into existence, for creating an app or for doing online marketing.
Serving digital customers
In the early 2000s, broadband internet replaced dial-up connection and e-commerce grew further beyond the dot-com bust. Making online revenue became a key business objective for many organisations. The first hurdle was setting up shop online. The IT department enabled the connection between the website and the back office, and consumer-friendly product information was provided by the product department. At B2B companies, such as wholesalers, the emphasis lay on shifting revenue channels from telephone and fax to the webshop. The CMO faced a growing number of digital touchpoints: email, web 2.0 and social media, the smartphone and later the tablet.
New marketing objectives emerged that many organisations are still working on currently: creating a single customer view, offering an omnichannel customer experience across all touchpoints and personalisation at scale. Often, the CMO struggles with securing a continuous budget for developing the digital channel. The rapid succession of digital innovations can make investing here seem less profitable than IT investments focused on optimising other business operations.
Everything becomes digital
The successes of Big Tech companies like Google, Facebook, Amazon, Booking.com and Uber showed the market-disrupting impact of technology. Traditional companies such as the yellow pages, travel agents, local bookstores and taxi-companies have had to reinvent themselves or vanish. In October 2021, Tesla became the sixth company in American history to hit the $1 trillion mark, following five other tech companies including Apple and Microsoft.
Nearly every business function today has a digital counterpart available. Currently, most companies strive to incorporate innovations such as cloud and machine learning. On the consumer side, after the landslide introduction of the smartphone, there has been little innovation with likewise impact. Emerging technologies such as VR, AR and NFT aren’t causing fundamentally different consumer behaviours, just yet. The biggest focus is on improving the customer experience, made possible by the ongoing automation and digitalisation of the back office.
The new reality is tech-first
In the wake of Covid-19, the need for digital transformation is set firmly across-the-board. Digital becomes an intrinsic part of every business process, not just the ones touching the customer journey. And now, the availability of technology has lowered the barriers of entry for most markets. Anyone can start a webshop, delivery service or a service provider overnight simply by connecting a few digital services. But to build something unique and lasting in a growing competitive market, you have to build and brand your own digital product.
For traditional companies, the customer relationship should shift from transactional to relational. Separate digital teams need to integrate with the whole of the organisation. Traditional IT focused on maintaining the status quo must welcome the digital approach, which means speed, agility and simply breaking things to learn how they work. Organisations need to find a balance between risk aversion on the one hand, and experimental, digital growth on the other. Where IT has become the business enabler, digital is now the field where the business grows and accelerates. And to make matters even more challenging, the key factors privacy and cyber security are becoming increasingly more demanding and essential to administer. To run your business successfully today and tomorrow, technology has to be firmly embedded in the whole of your organisation.
The big challenge for everyone today in this story? It’s not producing new ideas. It’s finding the right tech people to make them happen.
Questions?
VP Global Strategic Alliances at DEPT®
