Making a Competitive Difference by Embracing Digital Technologies
Hamidreza Mafi is a strategy consultant at Accenture Inc, and is aligned to Enterprise Architecture and Application Strategy practice. He has completed his MBA studies with concentrations in Strategy and Finance from McGill University, and holds a Master of Engineering Management and a Bachelor of Electrical Engineering from University of Ottawa.
The way we live, work, and interact with the outside world has been fundamentally changed, revolutionized, and disrupted by the rise of new technologies (i.e. smart phones, social media, and cloud computing). Although we enjoy the comfort that digital technologies have brought to our daily lives, there is an increasing need for organizations and established businesses to drive critical and elemental changes in their service offerings to align with customer needs and expectations.
Due to this fundamental shift, organizations need to change the traditional way of conducting operations to create a competitive edge to meet their customers’ needs. In the past, most industries were reasonably immune prior to the appearance of digital technologies. However, a new competitive dynamic has emerged not necessarily because more products are becoming digital, but because more internal processes and procedures within an organization are becoming digital. Digitization can internally accelerate process innovations that result in doing things in better ways. Ultimately, customers can benefit by having easier access to products and services via different channels.
Recently, much attention has been given to improving business operations and operating models by developing digital capacities. To drive this agenda successfully, organizations should focus on three key criteria: (1) standardization, (2) innovation, and (3) personalization.
1. Standardization - “Deploy a Consistent Technology Platform”
Historically, line managers were given a great deal of leeway to purchase and install customized software to achieve a better organizational fit. Experience has shown that it is prohibitively time consuming, costly, and complex to put together a bunch of legacy systems for a common purpose and to support standardized processes. Maintaining a mesh of legacy systems is also a burdensome task that consumes a large portion of the allocated budgets of IT organizations, requires niche and specialized skills, and limits the flexibility of IT organizations to meet future business needs. In order to drive greater operational efficiencies, organizations should focus instead on deploying a centralized technology footprint that enables standardized business processes and improves data integrations across the entire enterprise. A centralized and consistent technology platform is an essential step to free up low value-added resources and processes and to expand the strategic options of organizations with digital designs.
2. Innovation – “Present IT-Enabled Opportunities”
After deploying a centralized technology footprint, organizations must move towards presenting collective IT-enabled opportunities to uncover business innovation. IT departments should be involved in the introduction of new products, new services, and new processes such that implemented technologies are tightly aligned to business processes and outcomes. Digital technologies can embrace IT-enabled opportunities by combining both business and IT strategies and creating value in less time without sacrificing quality in any service offerings. As an example, data analytics along with collective intelligence can be an important tool in identifying opportunities to improve. By integrating the concept of data analytics to provide insights, organizations not only can benefit from doing the work in better ways, they can augment the power of analytics in their operational strategies to better analyze and understand their customers.
3. Personalization – “Develop Customer-Centric Service Offerings”
Embracing mobile technologies and leveraging social media can drive value and offer tailored services to customers, where they are the center of focus. A customer-centric approach redirects the business focus from organizational processes onto the customers. This allows advances in achieving a high level of customer satisfaction, improving the collaboration between organizations and customers, and building organizational capacity through the development of customer-centric service offerings.
By leveraging digital technologies, organizations can create a competitive edge and achieve more in productivity and profitability. However, digital technologies must be used concurrently in two ways: (1) as a catalyst to drive value and (2) as an engine to deliver value. Evaluating where digital technologies can open new strategic opportunities and how organizations can take advantage of such options must be considered extensively prior to attempting to redesign operational strategies with digital capacities.
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