Digital Organization

For a company to be digital, it needs to rethink its business strategy, organization model and culture. As we are seeing in the market, digital disruption is occurring across every industry. Who would have thought of Uber as a competitor to FedEx? But now Uber aims to deliver packages and they most certainly are a major disruptor.

Organizations that don’t start at that point will continue to face disruption. Once your business strategy is redefined in the context of the digital age, then you can start to build the organization model, culture and capabilities required to not only survive, but to become a digital disruptor yourself.

The capabilities to succeed as a Digital Business are:

1. Extreme Customer Centricity

Every product and process has to be reviewed with customer’s lens. Customers can interact with your products & systems from anywhere they walk in the door, access you via mobile, the Internet, or through your call center and more. Customers can connect through one channel and continue their transaction through another. They still expect you to understand them completely and customize their journey by understanding the context on a real-time basis.

2. Thinking Big, Scaling Incrementally

Today an organization can start operating and quickly scale to become a global business. Many traditional barriers to becoming globally competitive have disappeared. This forces large, global enterprises which were built in an age when those barriers were high, to retool themselves into agile competitors themselves. This requires a new “digitized” operating model, built to be able to respond to individual customer journeys.

3. Being Empowered By Data

You have the means to access all the data you want. You can not only collect data online at every point of interaction, but physical experiences through IoT can now generate data as well. For example, sensor-fitted objects and machines can provide new types of data previously unavailable. A supply chain manager can know where their inventory or finished goods are going, how much time they take to deliver, if they are optimizing the best routes, and be able to respond to new information in real time. At Wipro Digital, we understand that this machine-generated data can power new ways of working and create a competitive advantage for our clients.

So what does it take to become digital? Organizations need to go back to their core business strategies and embed them with “Digital DNA.” It may sound daunting to enact such deep change, but Digital DNA can be developed.

There are 3 tenets that define the DNA of a Digital Business:

1. Agility

You must be agile. Customers expect greater responsiveness, so organizations need to be fast, agile and collaborative. You must be able to make quick decisions, come together in small groups and work collaboratively because silos can’t exist in digital. Marketing, sales and R&D must work together in order to respond to customers at speed. Organizations also need to reexamine rigid policies and procedures that were created years ago to industrialize and standardize operations.

2. External Orientation

Organizations with a higher degree of external orientation are the need of the hour. There’s a lot of innovation outside the enterprise, so if you’re not able to tap into this innovation and these different ways of thinking, then your organization will become extinct.

3. Risk Taking

Be willing to take calculated risks and be comfortable experimenting. You don’t need to invest billions of dollars before you know whether it will work or not. In the Digital age, you can experiment. For example, Google can launch a new product in beta to a micro-segment, gather feedback and data, and see what works and what doesn’t, to further refine and better the product. After this, they can fully launch and be more certain of the investment and outcome.

For some larger, traditional businesses, this kind of ground level change may seem intimidating or just plain impossible. But there are three paths larger organizations can take to transition:

The first path is to create small subsidiaries and incubate them outside the existing structure. Walmart, for instance, created labs headquartered in the Bay Area rather than at Walmart headquarters in Arkansas.

A second path to quickly ramp up digital is to acquire start-ups and bring Digital DNA in-house quickly. BBVA acquired the Internet bank startup Simple for $117 million and that upped their digital capability very rapidly.

Finally, the third path is to organically build within an existing organizational structure but provide freedom to operate differently.

Different types of organizations and businesses will transform differently. Some enterprises and industries are getting disrupted faster than others.

The less regulated and more consumer facing the industry is, the less time it will have to shift to a digital ready business before its disrupted. On the other hand, highly regulated industries, such as pharmaceuticals and healthcare may have a little more time to make the shift. Certain areas in banking could also take two to three years before they can get truly disrupted but certain products that are less regulated are already getting disrupted by new fintech players. If you look at it through a 2 x 2 matrix – how regulated versus how consumer facing the industry is you get an idea of the amount of headroom available before one must complete their digital transition.