It is almost cliche to say that "digital innovation is NOT about technology.” Yes, it is true. But, no digital innovation can succeed without a sound technology foundation. Ever since the invention of modern digital computers, information technology has played an indispensable role in all organizations. Starting with mainframe computers that automated various back-office functions, firms have become increasingly dependent on information technology. In today's global economy, no organization can operate without technology that supports all aspects of operations. Yet, digital-first firms need to use digital technology as the foundation of their value-creating activities. Just like operating factories and optimizing inbound and outbound logistics were essential in managing the value chain of traditional industrial firms, digital-first firms must use digital technology to create value through their value loop. To do that, digital-first firms must consider: digital operation, digital infrastructure and digital customer engagement.
Digital Operation
A mature digital-first firm has a well-established firm-wide development and operations (DevOps) practice and service-first culture that enables them to have continuous improvements of its offerings and processes. This contrasts with traditional firms that rely on a traditional system development life cycle model to design, develop, test, and implement a system to improve processes and offerings. As a firm matures, it will begin to adopt agile practices and service-oriented architecture. A fully mature digital-first firm can deliver constant improvements on its offerings through the DevOps method. This enables digital-first firms to constantly reshape their digital offerings as they sense the changing needs of individual users.
Digital Infrastructure
A mature digital-first firm has a well-established cloud-based service-oriented architecture and other advanced digital tools such as bots and mobile apps that are officially acknowledged, architected, and governed through a firm-wide infrastructure policy. Such a company-wide digital infrastructure offers not only agility but also scalability, reliability and security. This is in contrast to traditional firms that rely on on-premise information technology (IT) infrastructure where only centralized enterprise systems (such as enterprise resource planning (ERP) and customer relationship management (CRM)) are allowed. Other shadow systems and tools are not acknowledged and supported. As a firm matures, they begin to use cloud-based service-oriented architecture and other advanced digital tools, such as bots and mobile apps to support digital innovations, yet without any coherent company-wide digital infrastructure governance policy. A fully mature digital-first firm has a company-wide digital infrastructure policy to support cloud-based service-oriented architecture and other advanced digital tools.
Digital Customer Engagement
A mature digital-first firm has a company-wide system of customer engagement that provides a coherent end-to-end fully digitized and personalized user and employee experience that is deeply integrated with the user’s lifestyle. This is in contrast to traditional firms that prioritized internal process efficiencies at the expense of user experiences. In traditional firms, customers and users have to navigate multiple disjointed systems and interfaces that produce fragmented user and employee experience with many workarounds. As a firm matures, it begins to deploy coherent end-to-end user and employee experience through dedicated digital channels that are not necessarily fully integrated with traditional channels. A fully mature digital-first firm would offer a seamless end-to-end multi-channel user and employee experience.
Article Date
February 17, 2022