Growth booster: Two-speed digital strategy for every business

We live in a new era where emerging digital processes coexist with traditional ones. The introduction of digitization is dictated by the new digital competitive environment, the need for an effective digital strategy, increased visibility, the reduction of transactional cost and compliance with the company policies.

IT has its costs but promises a positive NPV and higher ROI. For example, a company trying to launch a new e-commerce business within a tight time frame can find itself pulled back by the high IT-spending and the lengthy approval process for the new project. This time-to-market problem is a dilemma that many companies face as they seek to develop new products at a faster tempo, digitally optimize processes, or place major strategic backups in response to the digitization of their businesses.

To overcome such challenges, we recommend that companies reframe their IT strategies while following these three principles:

1. Implement a two-speed system

Companies will need to adopt effective solutions in addressing digital timing challenges such as creating a new budgeting and approval process in which projects supporting major digital strategic thrusts are treated separately from the rest of the IT budget. We recommend creating a speedy process for functions that address evolving customer experiences and a transaction speed for the remaining functions, where the pace of adjustment can remain more measured.

2. Make the digital dialogue more strategic

Establishing a new budget and approval process works only if there is clear agreement on what constitutes a digital priority worthy of a speedy process. Hence, the digital dialogue has to become strategic to convince top management. In response, the company’s top management may engage the board in a discussion of digital priorities that could redefine the business model. Once it’s clear that certain types of technology spending are key investments in new business strategies, they quickly realize that the resulting initiatives should be implemented quickly. 

3. Evolve the organization’s digital strategy 

When strategy is formulated, the operations team has to follow up on execution. When the IT organization is asked to release new digital functions on a faster deployment cycle, it requires new levels of flexibility and coordination that may require substantial organizational change.

For example, one industrial company recently established digital product management as a separate organizational unit that is accountable not only for the company’s website, mobile applications, digital interactions and new functionality, but also for collaborating closely with business and IT leaders. This type of setup allows individual businesses to identify and prioritize their IT requirements and then to tackle priority projects without compromising the development or maintenance approach needed for core transactions, which are managed separately.

Digitization has led to fierce competition that challenges monolithic corporate structures. A two-speed approach to architecture will help companies navigate what’s likely to be a tricky period of transition.

Want to implement a robust digital strategy in two steps? The team at 360 Business Ventures is happy to assist you in your projects. Sign up now for your free 30-Day trial.