The digitisation of everything
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1 Februarie 2012 |
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ERNST & YOUNG S.R.L. |
Adresa
Strada Dr. Felix Iacob, Nr. 63-69
Cladirea Premium Plaza, Etaj 15
011033 Bucuresti, Sector 1
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+40-21-402.40.00
Fax
+40-21-310.71.93
Website
www.ey.com
Digitisation is a step change even greater than the internet. Exponential technology advances, greater consumer power and increased competition mean all industries face the threat of commoditisation. The winners will act now, and build a strategic advantage that leaves their counterparts wondering what happened.
The digitisation of everything
An imperative for digital innovation and engagement has emerged: businesses have already realised that they must use digital channels to engage with their key stakeholders to maintain relevance and drive the conversation. However, few realise how fast the change needs to happen, or how transformational it needs to be.
The real imperative in a world where ‘everything’ is digitised is that businesses need to pursue innovation to disrupt their own business model before the competition does. Without innovation strategies, companies will lose their competitive advantage in an increasingly commoditised world. There is no time to lose, as technology change accelerates exponentially and new digital platforms and devices are emerging. Furthermore, the expectations of the new ‘generation Y’ or ‘digital natives’ mean that companies must keep up with the pace of change or lose relevance.
The challenge for businesses is to face the implications of digital change: in particular, the loss of control over the customer relationship, increased competition and threat of commoditisation, and the need to engage digitally with suppliers, partners and employees in addition to customers.
The starting point is a structured approach to assessing your digital maturity based on an understanding not just of the technology, but of the ‘big picture’ of what digital engagement means to the business.
To deal with this challenge, companies must develop an end-to-end response. They need to develop a comprehensive digital strategy and rethink their business and operating models to deliver this. Such a strategy must go far beyond the Marketing department: it has to be about ubiquitous cross-channel connectivity, it must enable continuous engagement with customers, suppliers, employees and investors. It must also be about C-Level leadership, and critically it must be about innovation and differentiation through the business/operating model.
The issue
The imperative for digital engagement
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Defining ‘digital’
Digitisation at its simplest means the conversion of analogue information into digital information. As digitisation capabilities extend, virtually every aspect of life is captured and stored in some digital form, and we move closer towards the networked interconnection of everyday objects. The impact of this is a real‑time global exchangeof information between multiple connected devices (fixed and mobile).
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Businesses must use digital channels to create seamless and consistent engagement
With the introduction of the first commonly used commercial websites in the 1990s,digital technology brought a new level of convenience to customers. However, digitalconvenience came at the expense of meaningful engagement as digital transactionssubstituted physical interactions. In addition, digital channels develop in isolation,resulting in inconsistency and dislocation between digital and physical channels. Thelegacy is one of frustration for today’s customers, when for example they find they cannot complete an interaction they began online when they walk into the store. The frustration is particularly felt by digital natives who have grown up used to immediacy and convenience and expect to be ‘known’ at every interaction with a company, regardless of the channel in which they choose to engage. Now, however, new technologies exist (see figure 1) that make it easier than ever before for companies to bring channels together, and to deliver a consistent engagement model whether customers choose to ‘tweet’ or to take their feet to the street.
