What is a Digital Business?

Erik Wirsing - Chief Content Officer, Sappington

“Psst… what’s a digital business, anyway?” I hear business executives ask this question a lot. I think they whisper it because they don’t want people to know that they might not know the answer. I appreciate the leaders who are asking the question because, well, they’re asking the question—it’s confusing out there. It’s OK to not know or understand. We are all just beginning the journey of coming to grips with what a digital business really is.

Business leaders running traditional companies in established sectors may also wonder whether digital business is relevant to them:

“I’m a construction company. We build things. We’re not Google.” 
“I make pianos, so digital business doesn’t apply to our company.”

I’ll often ask, “How do you build things?” And they’ll say, “Our people use a software program to design a building… a piano… or a coffee package.”

I’ll respond, “A-ha. You’re using software to build stuff. Believe it not, you’re running a software company.” Most traditional companies don’t realize how much they rely on technology to support their business because in this digital, customer-driven world, every company is a software company.

A fantastic example of a construction firm embracing digital business transformation is Skanska. They’re still doing what they do best—construction—but now they’re using technology in inventive new ways to do it even better. In their case, apps, cloud solutions, and devices are all coming together to make buildings more efficient while also protecting children.

So one observation we can make is that part of being a digital business isn’t so much worrying about whether you’re a tech company—it’s about looking at your products, customers, and business strategy, and getting excited about how technology can provide new solutions, experiences, or even entirely new business models.

These days there are many definitions of a digital business. Gartner, Forrester, McKinsey, and other sources have all weighed in with their descriptions. You’ll hear a lot of chatter about people, processes, and technology. About blending digital and physical assets for unique experiences. About shifting investments from legacy systems to systems of engagement. None of this is wrong at all. It just doesn’t tell the whole story.

The whole story is less about the technology itself and more about the technology and your customers. When you boil it down, every company has two things in common today: they have customers and employees. More and more customers are driving the conversation—they want better experiences that often blend traditional, physical products and services with new, digital ones. More emphasis needs to be placed on the technology that’s exposed to customers. How can you create more compelling experiences by combining traditional services and technology? What internal technology tools can you provide your employees to add greater value to the overall customer experience?  

There is a small but growing number of companies that understand the importance and value of being a “digital business”; the MIT Center for Digital Business calls these companies across a wide range of industries “digital masters” (Nike, Burberry, Caesars, and Asian Paints are a few). It’s important to remember that there really is no such thing as a truly digital business, not yet—no one has completely transformed. Instead, there are companies that are spread out over a spectrum of digital advancement, the furthest behind being what Forrester has dubbed “digital dinosaurs.” The truth is that every business is on a unique digital journey that will vary in terms of company needs and capabilities—and ideally be customized around the increasingly demanding customer.

Getting into all the nitty gritty of what a digital business entails would require far more space than a blog entry reasonably permits. So, briefly: in my experience, the companies that will thrive as digital businesses are those that carefully balance business strategy, internal digital operational excellence, and investments in technology that make the customer experience awesome.

Here are some more traits of a successful digital business:

  • Puts the customer before the technology
  • Understands the blurring of lines between technology and physical/tactile experiences
  • Strives for digital operational excellence and looks at extended ecosystems as a means to intelligently scale
  • Views digital business as wholesale change that is driven by senior leadership, rather than a series of grassroots bolt-on tactics
  • Champions a Chief Digital Officer, or empowers the CIO to assume more of a business role
  • Invests in ways to build bridges across business and technology stakeholders
  • Aspires to go beyond creating a separate digital strategy and instead looks to digitize the business strategy already in place

So what now? The first step is to start a conversation with peers in your organization. Ask a simple question: “How can technology improve our existing products and services for our customers?”

It really is okay to stop whispering. You’re not alone in starting to explore this whole digital business thing. 

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Erik Wirsing
Chief Content Officer
Storytelling Master

I have one of the best jobs a guy could ask for. I get to use my passion for writing and storytelling to help clients communicate their sometimes complex value propositions to their customers in human ways. Every day I get the opportunity to collaborate with our very talented internal creative team to deliver materials with soul and staying power, whether decks, sales tools, thought leadership or other collateral.

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