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August 21, 2013
The digital future is in your hand
By: Mark McDonald

How should executives think about digital technology opportunities? It’s a good question given the range of digital technologies, the pace of innovation and the constant launch of new digital businesses. Should executives see digital the same way that they have seen prior technologies? Or is there a different way to see and seize digital opportunities and results?

An answer can be found by looking at your hand.

Waving the technology hand

Traditionally, technologies arrive in separate waves. An eCommerce wave, an Enterprise Resource Planning (ERP) wave, a wave of outsourcing, etc. View each technology wave as a finger, an individual opportunity and a focused investment. Spread your fingers out and that is a one way to look at the technology opportunity.

That view exists in digital. You take an open hand view, when investing in mobility for the sales force, social media in your customer channels, analytics in other areas. Each digital technology provides a point solution just like you point with the fingers of your hand. An open handed diffuses digital investments into individual solutions.

Sure, each investment carries its own business case, but soon total spending on digital technology proliferates as each function, business unit and geography seeks to put a shiny new technology ring on each finger. You end up with proliferating pockets of digital spend.

Consolidation and control are common responses as leadership seeks to get a ‘hand’ on digital spending. Consolidation aligns the fingers of your hand, giving you a way to slap at the market rather than giving you the focus to generate growth and results. An open hand approach to digital investment may at first seem appropriate, given the open nature of the technologies themselves. After all, digital is supposed to be adaptable, flexible, innovative and entrepreneurial. All of these ideas fit an open handed approach allowing business units the freedom to experiment and exploit. Right?

Yes, if each of these digital technologies worked best in isolation rather than combination. The problem is that while it’s possible to implement digital individually, it is much more profitable and impactful to create combinations of digital technologies. Take that open hand of point solutions and bring it together into a focused fist directed at specific business outcomes and results.

Forming a digital fist

Bringing together digital technologies to achieve a targeted outcome defines how to form a digital fist. A digital fist is not a closed solution; rather it is one that leverages the strengths and mutual support provided by each of the digits in your hand. An open hand approach looks at the technologies individually and often sequentially to digitize current processes and practices.

Pick a current digital investment. Does it change how you do things? Certainly, we use new systems and tools, mobiles rather than PCs. Has it changed what you do or why you do it? If the answer is not really, then you have digitized in isoltition rather than digitalized your business in combination. You are poking at the market with a finger, when perhaps it’s better to punch with a fist.

Bringing digital technology together and creating innovative capabilities rather than automating current practices is the basis for creating a digital fist. Consider a sales force equipped with mobile computing (smart phones and tablets), combined with customer and product analytics that inform sales on approaches to tailoring their interactions – a potent punching combination.

Creating digital solutions in combination results in the capabilities required to fight and win in the marketplace. Forming a digital fist sounds counter intuitive in an open and dynamic digital world. After all, fists are signs of aggression, closed and threatening. You cannot embrace change with you hands and eyes closed. But fists are a sign of focus, something required to compete in turbulent times.

Think about the digits of your hand and the digital technology in your organization

The hand is a useful analogy for thinking about digital technology investments and business goals. Traditional thinking sees technology as discrete and concentrates on a focused business case. That worked well for IT, but it will be less effective in the digital world.

The digital future begins with mobile computing, analytics, big data, social media and cloud. It will continue with next wave of digital technology, from embedded sensors, three-dimensional (3D) printing, smart materials, biology based computing, among other innovations. How they are combined with existing information, digital and physical resources determines the future value of these technologies.

Value in the future will be achieved by creating new combinations rather than single solutions. Integration will give way to interaction as organizations face up to the diversity of possibilities in the digital world. That requires focus and an ability to go beyond point solutions that poke at the market, beyond consolidation that permits only a casual slap at the new sources of value. Rather than thinking of an open hand, which soon becomes closed through imposing cost consolidation, consider building and bringing together an organizational fist to build digital capability in combination and punch above your weight in the market.

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