These days, digital business is everyone’s business. The digital world has dramatically shifted the way you connect with your customers, employees, and partners. Mobile devices and the digitization of products and services have transformed every interaction and transaction — and fundamentally altered expectations.
According to an article titled Digital Business is Everyone’s Business, written by Jorge Lopez, Vice President and Analyst at Gartner, “Digital business is the creation of new business designs by blurring the digital and physical worlds. It promises to usher in an unprecedented convergence of people, business and things that disrupts existing business models – even those born of the Internet and e-business eras”. As a result, businesses have a tremendous opportunity but also face a critical imperative to meet these new digital expectations.
Digital business can involve including sensors in jet aircraft engines to alert maintenance staff to issues before they arise or the deployment of drones in oil and gas pipelines, to check for cracks before the pipeline fails. In retail, we might see a situation where “a customer would enter a retail apparel store, try on a coat, and the store systems would know this had happened. They would then project an image of the buyer on a screen with the coat on and propose some accessories or alternatives that would go well with the new clothes, all the time taking into consideration any price limits placed by the customer in the process of discussing their purchases”.
While it would be easy to confuse Digital Business with the Internet of Things, in reality, Digital Business encompasses more than just IoT. To hear Lopez tell it, “Digital business is about the creation of new business designs by blurring the physical and digital world. It is about the interaction and negotiations between, business, and things”. The organizations that are winning in this new economy are those that were born digital or have had the foresight to see this dramatic shift coming. The companies that have embraced digital transformation from the inside out have reaped the benefits, including added agility and efficiency, increased customer satisfaction and loyalty, and new revenue streams.
Many businesses today recognize that digital is disrupting the marketplace and that they need to take advantage of technology and software to better understand and engage with their customers. In fact, “42% of executives said that digital was helping them to enhance their existing products and services”, when asked during a study by MIT Sloan Management Review. According to the same survey, “78% of respondents [said] achieving digital transformation will become critical to their organizations within the next two years”.
Achieving this digital transformation is an evolutionary imperative, already demonstrated by organizations like GE and Entravision Communications Corporation. GE uses analytics to “provide real time information to improve efficiency, increase productivity, and schedule more effective preventive maintenance” while also “adapting its economic models and pricing formulas to capture some of the new value it creates for its customers”. Entravision, a Spanish-language media company with U.S. reach, uses advanced analytics to “obtain fine-grained behavioral insights, which [are] highly sought after by companies selling products and services” to particular demographics, like the Latino population.
Designing products to be mobile enabled can also yield large positive impacts for an organization, as Tokio Marine Holdings found out. There, “mobile and location-based technology gave company executives a way to make the firm’s products more relevant to customers without having to change the core business”. Tokio Marine realized they could offer new insurance products to consumers based on their location and served via their mobile app, which provides recommendations for lifestyle insurance products like golf and travel.
The potential of digital business is a future where applications and digital assets communicate automatically, without human input, allowing for a huge competitive advantage to those organizations evolving into true digital businesses. This won’t be a small effort, and will require integration, orchestration, and complex engineering to fulfill this promise. However, the promise of greater efficiency, speed and ability to meet customer needs, demands progress toward Digital Business and your digital future.