A digital strategy filters out those business objectives that can be furthered with the help of digital services. A good digital strategy gets rid of unprofitable ideas, refines the best ones, focuses on the customer, looks at the big picture and specifies how to progress to the finish line.
An appropriate, all-encompassing digital service is a necessary and effective way to achieve your business objectives – even when the core of the business is not online. Effective and measurable development of the whole service requires a digital strategy in the background.
I suggest the following operating model as a digital strategy.
- Select those business objectives that can be supported with a digital solution.
- Assess what the construction of a digital solution would mean.
- Make a plan for the realisation of the solution.
I’ll divide this operating model into three different phases.
Phase 1: Selection of business objectives and construction of hypotheses
A company can set endless goals for its business. The purpose of a company’s strategy is to cut 99% of these limitless goals and nominate the chosen ones.
The task of the digital strategy is to filter those goals that can be supported by digital services. It’s easy to throw hopes around, but in the name of realism it’s not worthwhile for a small or medium-sized company to have more than three major goals on its desk at the same time. Often the right number of goals is one.
If the avalanche of goals from business management is huge, it’s worth talking about realism and prioritisation before moving on to the next phase.
Assessing the suitability of goals is important: it determines whether there are any preconditions for a successful outcome. I have discovered a good way to take into account the expected target of each individual business as well as the impact of digital feasibility assessment.
I’ll take as examples the goals we regularly come across.
- Reduction of sales times (often for certain products or services)
- Increasing customer satisfaction
- Resale success (retention)
- Creating marketable leads
All these can be assessed in terms of business impact and digital feasibility. In practice, the assessment is generated in interviews and workshops together with business managers and sales. The final results are scored with the objectives placed in the four fields shown below.
When evaluating goals, often the first hypotheses to come up are what kind of digital solutions can be used to support the achievement of the goals and what the expected outcome will be – that is, what will be achieved. The hypotheses must be taken so far that decisions can be made based on them.
Above all, experience helps to make a good hypothesis. You need to know roughly how much it will cost to build different digital services. What, for example, will be the cost of an online store, ordering system or customer portal? It is also necessary to outline what can and cannot be expected of solutions. Can the end user bear to create IDs for yet another portal, and what added value will be brought so that they will put up with it?
A hypothesis based on experience and researched information must also be put to the most important test, i.e. evaluation by end users. User tests and user interviews should play an important role for the company in making the final decision to implement the service.
A good strategist leaves the possibility that a large red cross will be drawn over those plans taken to the hypothesis level. An important part of success is that the wrong things are not done.
Phase 2: Creating the big picture
In moving to the second stage, the company has prioritised its business objectives and, from those, selected the ones that it is best able to achieve with digital solutions. In addition, the company has described the hypotheses about the assumed outcomes and, on some level, formed an idea about the size of investment and ongoing costs.
The next step is to integrate the services to be developed into the rest of the company's infrastructure. I recommend doing this by visualising the customer’s points of contact with the company and the technologies needed to realise those points of contact.
An example of the big picture of a digital strategy is an imaginary company that makes “Smart Home” technology. It opens up the most important digital points of contact for customers and resellers, selected social media platforms, and key influencers. The lower part of the figure roughly describes the systems, technologies and their integrations with each other.
The digital big picture includes all the company’s own services and social media channels where the company and its customers interact. At the same time, it’s a good place to visualise the desired movement of target groups between services. The big picture gives at a glance an idea of how the company hopes to be digitally present in its customers’ daily lives and their purchasing decisions.
A high-level architectural image names the systems behind the customer’s path. Its purpose is to tell what is required to realise the planned customer experience. The integrations between the systems are also drawn in the image, and a later document will then explain in more detail what information is controlled by the different systems.
An architectural image reveals possible structural defects and overlaps in the plans even before the actual technical design and helps in perceiving the cost.
The architectural image of the digital strategy will be deepened and enriched as systems are acquired. It is good to outline this image together with the organisation’s ICT management.
Phase 3: Drawing a roadmap for development work
After selecting goals, planning hypotheses and drawing the big picture, it’s time to plan what is needed to move from current state A to documented target state B. I recommend drawing a development roadmap for this purpose – it’s a tool for turning digital strategy into reality.
The roadmap can follow any well-established presentation method in which the order of development work and the dependencies are well highlighted. Personally, for the simplest entities I take advantage of the drawing features of presentation tools and rely on Gantt models for the more complex ones.
I recommend drawing a road map first without any time limits. The most important thing is that the designer considers how the next piece of the whole can be realised.
When drawing a roadmap, a team implementing a digital strategy may be left in what I call an ERP lock: all development work seems to be stuck behind the everlasting ERP reform. As a remedy for this, I recommend the design of subassemblies and momentarily forgetting about eternally intermediate source systems. No business can survive waiting for the completion of never-ending projects!
Once the roadmap is completed, it is time to put it in the calendar and make preliminary estimates of the duration of the development projects. The appropriate accuracy is half a year and at most a quarter.
A good strategy also always includes the monitoring of results and progress. The roadmap must respond to this call by communicating the status of development projects. This section should be actively maintained as the practical work gets under way.
After the roadmap has been drawn, there should be a digital strategy based on the business goals, taking into account the operating environment and development resources, and crowned with a concrete plan of things to be promoted.
The digital strategy has been made but the work is not progressing – what do you advise?
Was there a good strategy in place that, however, stayed on the shelf gathering dust but returns to your consciousness in moments of self-loathing while ad hoc ideas from the loudest “stakeholders” are being smashed around without a hint of a plan?
Don’t worry – it’s possible to get back on track!
To support the digital strategy, I recommend the introduction of a company-wide governance model that allows all parties involved to return to the plan time and time again and to experience progress through common successes.
Interested? Book a free discussion meeting with the writer of the digital strategy article.