Digital strategy is the hot topic in business right now, in fact, digital tech is often the first place managers and business owners look to drive change, find efficiencies and grow revenue. Traditionally, finding competitive advantage was defined by Michael Porter’s Generic Competitive Strategies which target three fundamental approaches:
I think it is safe to say that business has been using technology for many years to leverage either of these strategies to gain an advantage, it’s just part of the DNA of being in business.
‘Let’s do business smarter, faster, cheaper, leaner’ are common statements we hear around the boardroom
What has changed in recent years is the ‘accessibility’ of technologies and digital solutions at a price point that enables every business (large and small) to implement transformational strategies that lead to competitive advantage.
That’s not to say that digital transformation is easy! There are a myriad of platform options, legacy systems to deal with and often the most challenging component – “organisational change” management – just getting your people to embrace change.
In our experience, driving transformation using digital technologies can be categorised into the following segments:
Businesses that understand their analytics are more likely to be more transformative: wouldn’t you like to know if 80% of your advertising spend is being on ads that aren’t converting, or that your productivity utilisation rate was only 57%.
The implementation of systems and tracking tools and Internet of Things (IoT) monitoring tools now allow this type of data to be at the fingertips of business owners in real-time, creating useful leading indicator metrics of future performance, not “end of quarter” lagging numbers that managers have no real active control over.
Businesses that have embraced innovation in customer experience in their chosen industry are the standouts in digital disruption. The examples in this space include ApplePay and banking apps, enabling customers to transact via their phone, as well as Bunnings 3D kitchen planning tools enabling customers to plan their entire kitchen in 3D and order the finished design online.
We anticipate this type of online user experience to spread across a range of eCommerce solutions, particularly as this technology becomes more accessible.
At a small business level, cloud accounting systems enable customers to receive quotes, invoices and pay much faster than was previously possible. Our printer was once a meeting place for staff, but in recent years tumbleweeds roll by the output tray, we are 95% paperless these days.
Inevitably the mantra of ‘do more with less’ wins every time. Unfortunately, “user experience” differentiators can be copied quite easily as they are visible to the public, however, achieving competitive advantage using internal process may be sustained for a more extended period of time. Think new project management systems that would enable tasks to be done using half the labour force, all hosted in the cloud requiring no infrastructure investment. The result: massive cost & time savings, and your competitors don’t even know you have implemented it.
A common transformational approach to business process efficiencies is integrating separate cloud systems together. This is especially common for small to medium-sized businesses that have a collection of tools to perform functional aspects of their business. As cloud software continues to be the choice of business who are agile and chose innovation over stagnation, integrations should be easier to achieve.
Implementing change in any environment can often feel like turning the Titanic with an eggbeater, but in our fast-paced transformative landscape we see incredible examples of the new businesses using all three of these strategies a once. The standout example is Uber: Globally disruptive to the regulated stale taxis industry through unique user experience, new business process and smart use of data, a killer combination. And there will be plenty more to come across a range of industries with Artificial Intelligence just starting to become accessible to innovative business minds.
So what are you implementing to digitally transform your business and stay relevant to your market? Don’t hesitate to reach out if you have an idea or plan, but no idea of the options to bring it to reality. It may be internal software, online data analysis or just innovative ways to capture more revenue growth, speak to KND Digital to book a discovery session.