What's Your Perspective On Digital Business?

We’re launching our quantitative research into digital business for 2015, and I’d like to capture your perspectives in this year’s study.
 
Last year we started a detailed research study into digital business and published numerous reports on our findings and insights for business executives. This year we have partnered with Odgers Berndtson to help field our digital business survey to business executives. And as we did last year, we’re also extending the survey to our clients and social media followers.
 
The survey only takes 10 to 15 minutes to complete … the perfect accompaniment to a cup of coffee or tea! (OK that may be a stretch … but you can easily complete it while enjoying a cuppa.)
 
Please share the link with your social media followers (http://nigel.im/2015digibiz).
 
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The Digital Bolt-On Conundrum

What’s the difference between a digital bolt-on and transformative digital disruption?
 
In the two years I’ve been on the road talking with executives around the world about digital business and delivering keynotes on digital transformation, I’ve been most frequently asked about bolt-on vs. transformation; what’s the difference? 
 
A digital bolt-on is a digital project that is added to the existing business model that might improve the customer experience in a small way, but doesn’t fundamentally change how value is created for, and/or delivered to, the customer. For example, when a company updates a website and provides customers an electronic ordering platform, they are not changing the existing business model; they are simply providing an alternative channel through which the customer can buy products. The value proposition remains the same: buy and experience our product and you’ll gain value from the experience. Digital (in this case an online sales channel) has been bolted to the existing business model in much the same way a teenager bolts a spoiler onto an old car to make it "go faster".
 
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Predicting A New Business Paradigm For Financial Services

How will digital disrupt the financial services industry over the next 10 years?
 
Over the past couple of days, I’ve been meeting with clients at Forrester’s Forum For Technology Leaders in Orlando. Clients mostly want to know how digital will impact their business. My approach in responding to this question is to think like the CEO of the company in question: First, understand the customer’s desires; then figure out how those desires can best be met profitably — I imagine how future technology changes might create new sources of customer value.
 
We’ve already seen massive change in the financial services sector: Technology is dramatically changing our customer experience and helping firms educate their customers. What more is yet to come? And what will companies need to do to win customers in the future?
 
While this is a complex question, it’s not hard to imagine a very different reality to the one that exists today:
 
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Is Your Business Ready For A Digital Acceleration Team?

Empowering a central team to set digital strategy, provide common platforms, and provide specialist resources can help business units develop their digital maturity by embracing a set of common standards while still tailoring their customer experience to their specific market needs. Yet many central teams run into difficulty. They fail to clearly communicate their purpose and remit, they struggle to navigate the realities of corporate politics, and they forget to demonstrate their successes through clear metrics. CIOs looking to accelerate their firm's digital journey by building a digital acceleration team should first assess their organization's readiness and appetite (see Figure).

Digital accelerator checklist

For more on establishing a digital acceleration team, see my latest research: Your Company Needs A Digital Acceleration Team.

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Four Strategy Tips In The Age Of The Customer

Blog word cloudI just concluded six months of research looking at how firms plan strategy in the age of the customer. Perhaps unsurprisingly, I concluded that companies that fail to adapt to increasingly powerful customers, and disruptive competition, will not simply face near-term disruption — they risk their long-term viability.

I also found evidence of firms making changes in how they plan business strategy. High-performing companies look at strategic planning as a continuous process with a focus on customer value and loyalty.

In my latest report on strategy, I identify new responsibilities for CIOs, CMOs, and business-unit leaders in strategic planning. The report focuses on three ways CIOs and CMOs must step up and serve as a shaper of customer-obsessed business strategy that generates greater loyalty and drives better performance.

To succeed in the future, CIOs need to collaborate effectively with peers across the C-suite, especially the CMO and business-unit leaders, to build strategies and a shared business technology agenda, focused on customer outcomes.

Here are four tips from the research:

1.     It's time to separate strategic planning from the annual budget cycle. Annual strategic plans hold firms back from quickly reacting to fast-evolving markets. While strategies must be funded, continuous test-and-learn approaches will more quickly reveal opportunities and weaknesses.

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Three Tips To Craft A Better Digital Vision

In the age of the customer, your company must exploit digital assets in order to deliver world-class customer experiences and compete effectively. But moving the business from its traditional roots toward digital mastery requires the executive team to paint a compelling digital business vision.
 
Based on my latest research published in March — How To Craft A Better Digital Vision — here are three suggestions to help your firm develop a compelling digital vision:
 
1. Illustrate what customers will value in the future. The way your customers derive value from your products and services today will not be the same in the future. Your business will need to use digital technology to create new sources of value. Instead of simply designing a physical product or service to be used by a customer to satisfy a need, your firm must reimagine your products and services as digital services enhanced by physical products and people. Customer perceptions of value will be shaped by the digital experiences you create to help them achieve their desires. Your digital vision must help employees understand this shift.
 
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The CIO And Digital Business

Digital footprintOver the past year, there has certainly been plenty of press coverage surrounding the emergence of the new “Chief Digital Officer” (CDO). And the research we published in 2013 on the CDO role does identify how some firms can potentially benefit from a CDO role working alongside the CMO and CIO. But I’m beginning to see more business-savvy CIOs follow Starbucks' ex-CIO Stephen Gillett’s example and step up to lead digital strategy and digital initiatives.

In fact, CIOs with experience in marketing and/or business-unit leadership — especially eBusiness — are well equipped to lead the future digital transformation journey in many companies. They understand business strategy; they can relate to the outside-in customer view; and they already have an enterprise perspective.

OK, so there are not many CIOs out there today with this kind of experience (my estimate is around 20%) — but this is exactly the kind of CIO that CEOs need to hire in the future.

So let’s not get too hung up on titles — what really matters is the ability to combine a deep understanding of the customer with an understanding of how digital technology will drive new sources of customer value.

That’s the focus of a new series of reports we’ve just published (see below). The reports help digital-savvy CIOs work with business leaders to create a clear vision for what it means to be a digital business and start down the path toward digital business transformation.

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My Top Ten And What It Means For Getting Your Own Metrics Right

Every so often I check my blog stats to see what you, the reader, find most interesting - my goal is to continue to bring you great content in both my blog and my research. While I was looking back over my blog stats I thought you might like to see the top ten blog posts in case you missed any of them. But just how should I assess the top ten? Like all outcome metrics, this one is open to interpretation. 

I could take the simple route and just count which posts have the most reads (Table 1a). But that would fail to take into account how many days it has been since the blog was published - it stands to reason that older blog posts might garner more reads. So a ranking based on the number of reads divided by the number of days the post has been online would yield a more accurate result in terms of most read post (See Table 1b - Top ten most read posts)*.

Table 1a - Top Ten Most read Posts


1 Unleash Your Digital Business
2 The Secret Of Successful Social Communities: 4 Social Needs
3 Why Customer Experience Will Become The #1 CIO Priority
4
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Four Lessons In Digital Business

Making Sense Of Digital Business: Four Can’t Miss Reports From 2014

In 2013 I wanted to help executives understand some of the fundamental changes that are happening in business because of the digital revolution. Big names capture the attention of the media – who in the USA could have failed to hear about the collapse of Blockbuster or Borders? Who in the UK could have failed to hear of the demise of HMV? When writing about these failures, most analysts highlight the disruptive companies that put them out of business; companies like Netflix, Amazon and Apple. But I wanted to know if there was something more fundamental going on that impacts the ability of an incumbent to defend against digital disruptors. So in 2013 I set out to research digital business successes and failures in an effort to uncover the secrets of digital mastery.

I captured insights from my research in reports published in 2014. Here’s my pick of the top four you should read to gain a deeper understanding of digital business (these reports are available to existing Forrester clients, non-clients can purchase them individually or download a summary from this page):

#1 The Future Of Business Is Digital  - The results of 18 months of research into what lies behind successful digital businesses were first published in March in this report. Originally published for CMOs and CEOs, the report was subsequently republished for CIOs as “Unleash your Digital Business”. This report highlights how digital business differs from traditional business; provides an overview of the customer’s dynamic ecosystems of value; and offers six strategies to help transform any business into a digital business.

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