Is Your Company Really A Digital Business?

Or does it just look like one? Here's how to tell the difference.

Companies know they want to be digital businesses. They want to launch that next captivating mobile app, turn their data into smarter decisions, and use cloud services to be more responsive to shifting computing demands. But looking like a digital business is a lot easier than being one.

Many companies testing the digital business waters will be content to take baby steps that make them feel like a digital business but don't really accomplish much for their customers, warns Mark McDonald, managing director and digital business strategy lead at Accenture.

Being a digital business requires an outside-in view, where you ask: What do my customers need, and how can I use new technologies to do something for them that will eventually become revenue for me?

[It's the right time to ask the uncomfortable questions. Read Digital Business Strategy: 8 Gut-Check Questions]

Companies that only "look and feel digital" view customers from the inside out and end up applying new technologies that make life easier for employees but don't do much to make customers happier.

"A company that feels digital will take CRM tools and just make them available on mobile devices," says McDonald. "That may untether account execs from the office, but that doesn't change the underlying ways they work. They're not providing a different or better customer experience. They're just more mobile."

[McDonald is speaking at the InformationWeek Conference March 31 and April 1 in Las Vegas. Register now to join the discussion.]

In contrast, McDonald cites the IT service provider CDW, which analyzed the history and interaction between account executives and customers across 21 different communications channels. The result: When a CDW customer calls a 1-800 number, CDW's call-routing software recognizes the number as an active account, looks up the account executive, and routes the call to him or her. Customers don't need to ask for that exec, look the person up online, or push a series of numbers. CDW uses that digital platform to help the account executive be more human and accessible to the customer and thus do a better job.

"Another company would have put that information online and made customers pick through an online profile, but that's not being a digital business."

The key question to ask yourself about your digital business strategy: Am I creating a digital premium, or am I participating? Companies that use new technology to address old business tasks may feel digital, but they're just participating. They create a mobile app because their competitors have one, or they use rudimentary data analytics and stop there.

"If you're using data analytics to refine your supply chain, that's great, but that's participation," says McDonald. "But if you're using it to identify better ways to reach new market segments with new products, then you're going after a digital premium. You're creating something that would not be possible unless you sought it out."

Engage with Oracle president Mark Hurd, NFL CIO Michelle McKenna-Doyle, General Motors CIO Randy Mott, Box founder Aaron Levie, UPMC CIO Dan Drawbaugh, GE Power CIO Jim Fowler, and other leaders of the Digital Business movement at the InformationWeek Conference and Elite 100 Awards Ceremony, to be held in conjunction with Interop in Las Vegas, March 31 to April 1, 2014. See the full agenda here.

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