Digital Strategy: what it is, why it is needed & how it integrates with your business strategy

© Copyright 2012 - 2014 Digital Leadership GmbH! Slide 1!Digital Leadership

Services & Consulting for

Digital Leadership

Digital Strategy – what is it and why is it needed?" !© Copyright 2014 Digital Leadership GmbH!

Munich, 7th of October 2014 authored by Alexander Schmid!

!Digital Leadership © Copyright 2014 Digital Leadership GmbH!

Theoretically a separate digital strategy should not be necessary as the business strategy should include everything – including digital. !

Business strategy - how does digital strategy fit in?"

!  Define a unique and valuable market position!!  Making tradeoffs between what to do and what not to do#!  Creating "fit" by aligning company activities to with one another

to support the chosen strategy#

Michael Porter"

!  A system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully#

Dr. Vladimir Kvint"

!  A strategy is a set of different ideas that include a plan to achieve this goals#

!  A good strategy maximizes your competitive advantage by limiting your rivals opportunities and maximizing your resources#

Richard Rummelt"

Corporate Strategy"

Business Strategy"

Functional Strategy"


But reality looks differently…"

Music industry# Record retailers# Book stores#

DVD rentals# Banks#Print industry#

Publishers#

Retailers#

Photo industry#

These industries were already

heavily disrupted by digitalization. Many others will

follow.#

The threads and opportunities of digitalization are generally recognized too late and actions are not taken resolute enough.!


Why does this happen repeatedly (1/2)?*"

IT!

Moore’s Law: !

Computer chip memory doubles every 12-18 months at no rise in cost to the consumer.!

Metcalfe’s Law: !

Says networks become more valuable as more people join them.!

Law of Disruption: !

Technology changes exponentially, but social, economic and legal systems change incrementally and struggle to keep up.!

*Source: “The laws of disruption” by Larry Downes!


Corporate Strategy"

Business Strategy"

Functional Strategy""""

Why does this happen repeatedly (2/2)?"

Product! Marketing! Sales! IT!HR! ...!

Online#

Offline#

IT# Online#

Offline#

IT# Online#

Offline#

IT# Online#

Offline#

IT#Online#

Offline#

IT#1"

3"

2"

Today the “online strategy” is typically viewed as part of the functional strategy. Online strategy deals with optimal use of web/mobile channels. This leads to!1.  a none integrated strategy across

functional silos and in consequence also inhomogeneous user experience!

2.  no or too little and too slow changes to the business model!

3.  a loss of impact due to friction between business, online and IT being too much separated!


!

To fix this a digital strategy is essential"


Definition of a digital strategy"

A digital strategy defines how a company uses digital technology to maximize its business results.

It includes (1) a clearly expressed direction and (2) a

verified plan how to achieve this goal."


A digital strategy has to address the following"

1. Redefine / adapt the business model to match new / emerging market realities"

2. Integrate the internal capabilities to maximize usage of resources"

3. Unify and optimize the external interfaces to customers and partners for a seamless and optimal experience"

4. Bridge the gap between Business, User Experience and Technology"


Corporate Strategy"

Business Strategy"

Digital Strategy"


1. Redefine the business model to match the new market realities"

!  It is not sufficient to stay on functional strategy level, as the business model won’t be adapted to emerging market realities.#

!  It is not sufficient on the business strategy level because digital strategy needs to be close to execution to achieve the required speed.#

!  To constantly adapt the business model the digital strategy is mediating between the functional strategy and the business strategy.#

!  It can’t be parallel to the other strategies as is has to become integral to all thinking, doing and needs the “teeth” from being part of the business.#

#


2. Integrate the internal capabilities to maximize usage of resources"

!  Get a unified singular view on data (customer, status, financials, etc.)#

!  Enable advanced data analysis and build capabilities to act on these (new services, products, quality of services, …)#

!  Improve user experience through different silos by thinking and working along customer journeys#

!  Reduce costs through improved processes#

Product / Services"

Marketing"

Sales"

HR" Finance"

Procurement" Shared Services"

Service"

Product / Services"

Marketing"

Sales"

HR" Finance"

Procurement" Shared Services"

Service"


3. Unify and optimized the external interfaces to customers and partners for a seamless and optimal experience"

!  Based on the unified data view build a consistent external interface and customer experience throughout channels and across all use cases#

!  Improve the User Experience with new services and tools enabled by integrating data sources, digital technologies and cross-silo use cases#

!  Through a unified (digital) communication strategy leverage new media faster and more effectively (e.g. social) #

Product / Services"

Marketing"

Sales"

HR"

Procurement"

Shared Services"

Product / Services"

Marketing"

Sales"

HR"

Procurement"

Shared Services"

Customers#

Partners#

Suppliers#

Customers#

Partners#

Suppliers#


4. Bridge the gap between business, user experience and technology"

!  Integrate the business, the user and the technology view deeper to recognize trends earlier, act faster and identify opportunities thinking from the combined views#

!  Transform each unit and the general organization to be ready to handle the expectations for digitalized companies#

!  Bridge the gap between strategy and execution #

Business / Functional -

Strategy"

User Experience"

Technology / IT"

Digital Strategy"


Digital strategy is a necessary step in the evolvement of digital capabilities and maturity"

Corporate Strategy"

Business Strategy"


!  No online channels or only online offerings for single functional parts (public web site, shop,…)#

#

Level 1: Unable"

Corporate Strategy"

Business Strategy"


Product! Marketing! Sales! IT!HR! ...!

Online#

Offline#IT# O

nline#

Offline#IT# O

nline#

Offline#IT# O

nline#

Offline#IT#O

nline#

Offline#IT#

!  Separate online strategies for different but many functional parts of the company#

!  Business model is not adapted to digital opportunities and threads#

Level 2: Present"

Corporate Strategy"

Business Strategy"

Digital Strategy"


!  A digital strategy integrates business, online and IT strategies#

!  Business model integrates digital opportunities and threads#

Level 3: Managed"

Corporate Strategy"

Business Strategy"


!  Digital is an integral part of the business model#

!  Business model is constantly adapting and incorporating opportunities coming from digital#

Level 4: Integrated"


Best practices to create a digital strategy and start transformation"

!  Many companies call this role a Chief Digital Officer (CDO)#!  The CDO should report to the CEO and has his backing#!  The CDO needs to have real business goals and enough budget to

develop a digital strategy #

1. Establish a clear owner responsible for the success of the digital strategy"!  The CDO needs to act, manage and negotiate across all silos#!  The CDO needs to own the transformation process#

#

!  Use a well structured cross disciplines process to develop the digital strategy#

!  The digital strategy should be business driven and user centric#

2. Develop the digital strategy in a systematic process"!  It incorporates all business needs from the different parts of

your company and should be developed jointly with the respective business owners#

!  Implementing a digital strategy should not be a one of project but the start of a sustaining change in your company. Therefore:#

!  Change the organizational structure as needed (in the long term org structure defines solutions and therefore customer experience)#

3. Implement sustaining change"!  Kick off a cultural shift. Digital Business is very much about

mindset and culture.#!  Understand that it is the beginning as the world has changed

and won’t return to the old status ever!#


!

About Digital Leadership"


!  End-2-End Digital Strategy Consulting #

!  Business result driven & User Centric #

!  Multidisciplinary by design#

The leader in digital strategy!

Services & Consulting for

Digital Leadership

!  We are the only firm that puts HR where it needs to be: right at the core of the business#

!  Supporting firms with freelancers, temps, interims-management and permanent employees#

People Services

Digital Leadership

HR is a business function!

© Copyright 2012 - 2014 Digital Leadership GmbH! Slide 17!Digital Leadership

About Digital Leadership Services and consulting!

17#

Our offering!!  Multichannel E-Commerce, Internet, Intranet and

E-Business Applications#!  Strategy development & business model design #!  Product definition & management#!  User experience, brand & digital communication#

What makes us unique!!  We are the only company that offers a holistic approach to

digital strategy: the Digital Leadership Strategy Framework!!  We support you end to end from strategy to go-Live and

including all relevant disciplines#!  With a single point of focus, we can provide an expert team

bridging all disciplines with a wealth of expertise in their respective fields#

Our mission!!  Focus on digital strategy projects – particularly on relaunches in the

Financial Services industry#!  We have been founded to support clients at the very beginning because

results fade with erring objectives and incorrect scoping#!  Our focus is on strategy definition, UX, requirements collection and

correct scoping #

Concepts#Strategy#

Requirements #User Experience#

Digital Leadership Strategy Framework#


!

We make you successful by leveraging our unique Digital Leadership Strategy Framework™"

The Digital Leadership Strategy LandscapeServices & Consulting for

Digital LeadershipDescription: Summary of key artefacts, jointly summarizing the cornerstone of a digital strategy that are to be created during a relaunch and to be maintained by governance.

Project: The Digital Strategy Framework

Subject: The Digital Strategy Landscape

Version: 3.2 (Jan 2014)

Author & Copyright: Digital Leadership GmbH

GOVERNANCE OPERATIONS

PRODUCT

CONTEXT DRIVERS

Segmentation

User Needs

Use Cases & User Journey

Business Strategy

Stakeholderobjectives

Quantified Benefits

Business Model

Business Objectives

Governance Model

OrganisationalCapabilities

Existing Operational Model

Sourcing Strategy

Partner Map

Current IT Landscape

Field of Competition

Market trends

Current Product Performance

Vision

Project Motivation Statement

MeasureableBusiness Results

Pricing Model

Business Case

Defined Funding

Defined Maintenance Costs

Defined Develop-ment Costs

Defined Operating Costs

Expected Sales

Community Approach

Service Design

Supporting Products

Channel Strategy

Target devices

Positioning

Integrated MarComs Strategy

Target Architecture

Target Technologies

Target Platform

IntegrationArchitecture

User Experience

Interaction Design

Media Presentation

Brand

Design

Styleguide

Modules & Templates

Multi-Device Concept

Navigation Concept

Personalization Concept

Internationaliza-tion Concept

Structure Migra-tion Approach

Content Strategy

Content Model

Content Migration Approach

Scope Landscape

Functional Scope

Non Functional Scope

RequirementsBacklog

Governance structure

Change plan

Communication & trainings plan

Organisationalstructure

Roadmap Project plan

QA approach Internal capability building

Software Develop-ment Approach

Risk Management

KPI Framework Performance Measurement

Continous improv. Approach

Multivariant Testing

Analytics Operations SLAs IT Operating Model

Business Processes & Workflows

Promotional Contents

Promotional Media

Governance Product Development Measurement & Optimization Platform Operations

Channels & Ecosystem Digital MarketingTechnologyPerceptionInformation ArchitectureContentScope

Customer Needs Business objectives Operational Context Business Context Project definition Financials

The Digital Leadership Strategy LandscapeServices & Consulting for

Digital LeadershipDescription: Summary of key artefacts, jointly summarizing the cornerstone of a digital strategy that are to be created during a relaunch and to be maintained by governance.

Project: The Digital Strategy Framework

Subject: The Digital Strategy Landscape

Version: 3.2 (Jan 2014)

Author & Copyright: Digital Leadership GmbH

GOVERNANCE OPERATIONS

PRODUCT

CONTEXT DRIVERS

Business#

Technology#

Brand#

User Experience# !

!  Our focus is a multidisciplinary approach to strategy definition, UX, requirements definition, correct scoping and prioritization!

!  Our own unique Digital Leadership Strategy Framework minimizes delivery risk "

!  The framework has matured over years in outstanding projects and inputs from various industry leaders !

!  The framework offers unique breadth covering all relevant factors from business aspects, customer experience, brand and marketing to technology, project management, operations and governance!

!  The framework offers 100 out of the box deliverables and templates, processes and best practices to increase efficiency and quality !


We’ll take you to the top."

Stefan F. Dieffenbacher!Executive MBA, PMP, CPM, Scrum Master!Managing Director!

Digital Leadership GmbH!Landsberger Straße 217!D-80687 München!

+49 (0)176 / 638 020 11!+49 (0)89 / 748 600 [email protected]!www.digital-leadership.net!!

mobile:!office:!

e-mail:!Internet:!

Alexander Schmid!Dipl.-Inform. (FH)!Partner!

Digital Leadership GmbH!Landsberger Straße 217!D-80687 München!

+49 152 / 215 65 847 !+49 (0)89 / 748 600 [email protected]!www.digital-leadership.net!!

mobile:!office:!

e-mail:!Internet:!

We’d like to get to know you and answer your questions. !

For more information on our framework and to discuss your challenges, please get in touch with us for a free initial consultation! We deliver business value!!


Thank You ! !

Digital Strategy: what it is, why it is needed & how it integrates with your business strategy

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Transcript of Digital Strategy: what it is, why it is needed & how it integrates with your business strategy