Article Synopsis :
What percentage of your company’s revenues are under threat from digital disruption over the next 5 years? (Hint: for large firms it’s 53%. For all firms it’s 33%.)
In “Leading the Next Generation Business: Increased Customer Intimacy & Digital Ecosystems,” Peter Weill from MIT Sloan discusses the impact of increasing digitisation on the enterprise. Irrespective of industry, the report suggests four goals as it relates to customers:
- Have great information about customers’ goals and ‘life events.’
- Amplify the customer voice inside your company.
- Implement evidence-based decision making.
- Deliver integrated multi-product / channel customer experience.
As it relates to business design, Mr. Weill suggests four goals:
- Be the first choice in your space.
- Be great at partnerships and acquisitions.
- Deliver service-enabled core business transactions (with exposed APIs)
- Compliance as a competence.
The report shares IT-enabled transformation initiatives and offers case studies on what it takes to become an ecosystem driver in highly volatile markets.
A key insight in the report is that businesses zeroed in on value chains are at a disadvantage; they need to think more in terms of digital business ecosystems. Companies with a higher percentage of revenues from digital ecosystems enjoy higher profit margins than peers who still bank on traditional modes of operation. The report presents a high-level framework for helping executives think about emerging environments within the context of four distinct business models:
- Omnichannel businesses
- Ecosystem drivers
- Modular producers
Lastly, the report touches on ‘softscaling’ (i.e., informed empathy based on data) as a viable growth strategy for particularly volatile environments.
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Digital Insurer's CommentsWhat is your percentage of revenues under threat from digital disruption? How can you move revenue up and to the right and what role does IT play in this plan?
How good are you at optimizing business process? Nurturing the emotional connection with customers and employees? Operating with informed empathy based on data?
Positive answers to these questions means you’re thinking about technology in the right way – as a core competence fundamental to your organization, woven into its fabric, as a means to make better decisions and forge better relationships, nurturing stronger emotional ties, with customers and key employees.
Digitisation is not fad diet but lifestyle change. Excelling at digital means jumping into technology with both feet, like Google, Apple and Amazon, transforming the customer experience (or attempting to) like never before.
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