Digital Enterprise: What do you mean?

“Digital” Insights, acronyms and trends surround us. Building a modern Digital Enterprise is more complicated than any “magic bullet”, hype or our own siloed perception.
diego navia digital operations

By Diego A. Navia

Insights, acronyms and trends on “Digital” surround us. New – and newly adopted -technology capture the spotlight as the plummeting cost of technology and interconnectedness via mobile and social media has made this possible over the last decade or so”

Customer centricity is at the heart of Digital. This isn’t a new idea and some may remember a large wave of software and techniques came to life around the time of the dot com bubble. One that preached close relationships with customers and the optimization of lifetime customer value through CRM, 1to1, Salesforce, Siebel, etc.

The details, however, are not quite the same. Primarily because technology is not only more powerful but more importantly, affordable and ubiquitous, enabling personalized real-time relationships via mobile and social media that were not possible before. A level of personalization and customer journey that demands careful attention to behavioral changes taking place and the flourishing of digital and non-digital channels connecting customers with each other and individual organizations.

The result is a shift towards digital channels that has become a reality. PwC reports 46% of banking customers now prefer digital channels over the “omni-channel” model (45%) launched about two decades ago – also as a response to advances in technology. Thus, driving a digital experience that ensures a seamless customer experience has become a must.

Much of the push to build this channel as a true asset and competitive differentiator has given rise to the usage of relevant – new and repurposed – disciplines such as Design Thinking, CJM, UI/UX Design, SEO, SEM as well as a whole cadre of online terms such as PPC, CPC, CPM, that bring metrics to this channel.

Data and Technology

Broad connectivity brings data, lots of it. Data generated by both individuals and the applications they use, and increasingly by intelligent/ IoT devices. Removing physical infrastructure barriers by migrating to Cloud, open architectures and API’s allows us to access and connect all this data. This allows us the opportunity to leverage data and information in terms of both insights and actions, giving rise to brand new or newly adopted technology such as Data Analytics, Artificial Intelligence, Robotics Process Automation, etc.

Most of the new trends, application and techniques are not new either. The term Artificial Intelligence for example is over 60 years old. If you peek under the covers of some RPA, AI or Data Analytics tools you’ll find a similar answer with roots dating several decades back. Yet, these technologies, including so called “low code/ no code” are definitely much more user friendly and provide end users with a dramatic increase in their ability to solve real business problems.

As important, a wave of enterprise process and data architecture standardization driven by the likes of SAP and Oracle has created a layer that makes it possible for these new products to be usable. Whether it’s a connector, API, SDK or simply a report that brings commonly used data fields, these efforts minimize the level of data standardization and collection that may have halted similar efforts in the past. Just think what would have to be done if you were to go into Tableau, Qlik, UIPath, AAnywhere, etc and had to source data across different countries, departments, etc. Imagine if that had to be a repeatable process rather than a “one-time” shot.

Enterprise Value

Customer and Technology are at the heart of Digital but can this be sustainable if delighted customers, bits and bytes don’t translate into market share, earnings and enterprise value? At best this will be possible for a handful of years. In spite of this, insights, research and hard data available on this topic is pretty limited -even if there is no shortage of project ROI information. It may very well be that the rush to build the now prevalent digital channel is a must rather than an ROI-driven decision. It may also be that it’s a difficult topic where too many variables are hard to model with precision.

There are exceptions of course. McKinsey & Co. recently released a study that showed how margins across industries are compressing and how digitally-focused companies (i.e. Digital Enterprise) are the ones winning the game – even if there are fewer of them. This should come as no surprise given an increasingly globally competitive environment with lower barriers of entry. This only reinforces the need to measure value in general and digital enterprise value in particular, focusing on digital. It also underscores the need for financial discipline and focus on cost structure and asset base.

What is Digital?

Digital Enterprise data value technology

“A Digital Enterprise is one that can successfully address the trends shaping the environment we live in: ubiquitous and affordable access to technology and knowledge, changing demographics and global interconnectedness driving new behaviors and a dramatic speed of change”

As many have pointed out, seems difficult at times to understand what is meant by Digital given individual backgrounds and focus areas drive diverse definitions causing people to talk past one another while discussing the same topic. Digital may be synonymous to specific technology and buzzwords, the customer journey or the build-out of the digital channel(s). One thing is clear, this is a complex area with many layers, especially if the intent is to go beyond words and take action migrating to a Digital Enterprise. To keep it simple yet comprehensive it might be useful to focus on three core components:

Customer Experience

Foundational component where the bulk of digital efforts have occurred to date. A series of capabilities that allow an organization to establish, shape and strengthen new, contemporary and interactive relationships with customers enabling them to maintain or increase revenue and market share. A recent source of differentiation that has become a “must have” with potential for commoditization. However, technology adoption as well as evolving demands and behaviors (e.g. “Live chilling”, text over voice, video over text, etc) across generations are still likely to drive shifting needs as organizations focus on memorable experiences, “easy” self-service, etc.​

The “boring” heart of the enterprise, comprising back-office and middle-office functions, representing major cost efficiency opportunities. An area that should typically be invisible to the customer yet one that can easily break relationships and constrain financial viability. Terms such as Digital Operations or HfS’ OneOffice are being introduced, which represent the natural progression of Shared Services, Global Business Services and Outsourcing. Economies of scale are taken to a new level, removing functional and geographic barriers through remote work, automating, adding extensive usage of new technology and migrating to CoE-type co-location strategies. Also, the area where FutureOfWork effects will most likely be felt –and shaped.

Digital Operations

Products & Services

Goods and services received by the customer. Over the years a shift has occurred from physical products and add-on services to the current era of standalone sophisticated services with no physical exchange. As products, services and enterprise areas get commoditized, differentiated products and services are key to strong margins and thus strengthen the case for service innovation and R&D. Furthermore, we seem to be immerse in an era where intangible, “feel good” value associated with strong brands (i.e. Apple, etc) that appeal to personal values and lifestyle may be key to strong margins.

Digital Enterprise components

Learn more about enterprise digitization, unlocking Enterprise Value and the role Low Code/ No Code technologies play in the big transformation picture, by exploring or simply contact us.

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