In a previous post, I did my best to make a case that yet another wrenching transformation was collectively upon us. This time, it's a business transformation where IT can play a key role. One by one, familiar physical business models are being re-invented for the digital world.
A small group of progressive business leaders appear to be busily at work, thinking about how they'll thrive in a new digital economy. They're thinking strategy, model -- and platform. Although perhaps modest today; it will inevitably grow over time.
In this digital business model, IT is thought of very differently.
IT becomes the "digital factory" where new products and services are produced. The funding model changes, the skill profiles are different, the thinking is different, the architecture is different -- the very rationale for IT even existing is now very different.
In a digital business model, IT exists to solely generate revenue; and not necessarily to help the company save money through automation and efficiency.
I have now seen enough of these new beasts -- as well as the organizations investing in creating them -- that I can start to point to frequent similarities. The words they might use to describe their concepts and efforts might vary; their patterns do not.
An important starting point: the transformation from a physical to a digital business model is always a matter of business strategy and led by senior executives; IT can play a key enabling role, but they alone cannot lead the charge.
But IT can prepare ... and probably should.
The Rationale For A Digital Business Platform
Every digital business model requires a platform to do business on. The digital factory, if you will. Ideally, IT would build and broker the services required to achieve this during the transformation, and thus ahead of demand.
As always, failing to get ahead of that business demand means the progressive elements of the business goes out and consumes external services a-la-carte. Although it might seem expeditious at the time, do so has been shown to make things far more difficult to integrate and extend the combined platform over time, especially in larger settings.
Not to pick on anyone, but that oh-so-easy-to-deploy Yammer internal social platform doesn't look so hot when you're looking to integrate with go-to-market. Or that shiny iPhone app that the marketing team sourced externally will look pretty weak when you realize you missed the opportunity to capture interaction analytics.
And make no mistake, there are plenty of external IT service providers waiting in the wings to sell these capabilities directly to the business, if need be.
To the extent progressive IT leaders can offer the basic service elements of a digital business platform ahead of business demand -- even on a very limited fashion -- so much the better.
Because once the genie is out of the bottle, it's going to take a lot of coaxing to get it back in.
Elements Of A Digital Business Platform
I've now exposed to over 60 variants of digital business models, across maybe a dozen vertical industries.
Sure, there are differences to be observed, but there are also similarities. Not all are aimed at consumers; many are being built for B2B businesses, employees, partners and more.
So let's take a tour of a typical digital platform, shall we?
A good starting point would be to start with the envisioned experience (whether aimed at consumers, professionals, employees, etc.) and work downwards.
I've included this over-simplistic conceptual diagram to help visualize what the stack might look like.
Start With Mobile First
There are very few digital business models I've encountered that aren't thinking "mobile first". And they're not thinking simple apps, or web presentations -- they're thinking "mobile experience".
A mobile experience is one I carry with me, 24 hours a day, wherever I might be on the planet. It's always on -- I don't have to wait to get to a computer, fire up a browser, enter a web address, supply credentials I can never remember, etc.
A good mobile experience is rich with interesting, valuable or useful content, useful features, often personalized to me and my preferences, and -- in a perfect world -- follows me from device to device.
Better yet, my mobile experience integrates with other digital things I do: email, social, calendaring, etc. Do a good job, and the mobile experience you deliver to me can end up inextricably woven into my personal digital life. Do a really good job, and I may end up trusting it with more and more information I consider personal, just like I do with a good friend.
Keep in mind: my personal ante for a "great mobile experience" continually rises, so you better be prepared to continually invest in creating better ones for me.
Extend With Social
I am still amazed at the number of business leaders I meet who still don't fully appreciate the power of social, and what it can do for their business. I dove into the deep end over six years ago; I don't regret it. It changes the way you engage and work with people: co-workers, business associates, customers, partners, the press, etc. etc.
And, once again, it's hard to imagine any digital business strategy -- or supporting platform -- that doesn't feature social as a key, differentiating ingredient.
Social works best when there are strong communities and great conversations among like-minded people who share interests and values -- just like the real world.
So many observed digital business models thrive or wither based on social strengths that it makes sense to think long and hard about how you're going to go about building your "social muscles" over time.
When I'm asked to talk about my experiences with corporate social media strategy, I usually end up drawing three "proficiency domains": social proficiency within the organization (ideally first and foremost), social proficiency within your ecosystem (branded communities, etc.) and large scale broadcast / listening capabilities.
Platform capabilities matter; learning how to use them effectively matters even more.
Killer Content Is King
Great content is at the heart of any great digital experience. Great content also attracts people to your social destinations, and sparks great conversations.
Once again, it's hard to imagine *any* digital business model that doesn't have a river of great, compelling content at its core.
But coming up with a that river of great content isn't easy. Trust me on this, I know from personal experience. It's a lot of work, but the right platform capabilities makes this easier for everyone involved.
Whether your great content is generated organically, sourced or curated from elsewhere, or perhaps generated by your community, you should give some thought to making great looking content easy to generate, easy to distribute and easy to find.
That means thinking about authoring, aggregation and content management/syndication as capabilities of your digital business platform.
Understand With Analytics
One of the amazing aspects of any digital business model is that just about every aspect can be easily measured in an exceedingly fine-grained manner -- creating oodles of potentially useful data streams that can be used in isolation, or more ideally combined with other external data sources to develop predictive models of behavior.
Analytical insights often lead to quick experiments to gather more data, which further refines the model, and you're off to the "agile experiments" races.
You see this as a permanent fixture of the "born digital" models: powerful analytics, hundreds of small-scale experiments done quickly, and the insights put into widespread practice as quickly as possible.
The Business Logic App Factory
Many applications are nothing more than codified business logic; as new things are understood, they're formalized and put into practice where they can be measured and further improved.
In more mature digital business models, it's a widespread business function and not limited to a handful of experts.
The breadth, speed and agility by which this process occurs is a matter of great importance in every digital business model I've encountered. In the digital world, you're only as good as your apps. The ability for business logic developers to discover and use information and application services becomes a key enabler, as does agile iterative methodologies.
IT's role in this model appears to be enabling a hub-and-spoke model: focus on broadly enabling others in a consistent manner, while having the deep capabilities to tackle the real hard stuff.
The Corporate Information Store
In most digital business models, every scrap of information is potentially a valuable asset: if not today, then perhaps in the near future. Very little gets thrown away.
As a result great care is given to capturing and categorizing information as it's generated. Intermediate work product is similarly valued. As predictive analytics become more important, more external data sources are added.
But all of this is of diminished value unless the wealth of information sources can be easily discovered and put to work by anyone in the business, and not just data specialists. Ideally, IT becomes the "storefront" for the aggregated information assets of the organization: internal and external.
Here's the data, here's how it was sourced, here are the caveats, etc. You'll hear retail analogies abound: information malls, catalogs, store clerks, etc. It's a very useful mindset.
Workloads in most digital business models that I've observed tend to be rather variable and often unpredictable. That's the norm.
If you think about it, your infrastructure capacity is completely at the mercy of your customers and employees. New things are being tried all the time; optimization is done after the fact and not usually considered before.
At one level, yes, we're talking "cloud" -- whether owned, leased, rented, borrowed, etc. If it helps, think of your infrastructure as "factory capacity" -- you don't want to run out (lost revenue!) but you also don't want to be wasteful (lost profits!).
But efficiency isn't the real motivation; it's agility. The faster that your knowledge workers in a digital business model; the better. And you don't want IT to be the long pole in the tent.
In this world, IT is all about revenue generation.
Engagement And Consumption
All these great digital business model capabilities won't do a thing for your business unless they're fully embraced, consumed -- and reacted to.
And we all know that doesn't happen automagically.
That means a thoughtful and consistent approach to outreach, engagement, training, measurement, etc. Success of any digital business service (e.g. analytics, social) must be measured about how well it's consumed.
Poor consumption of any service is actually an opportunity to learn more about the problem: did we miss the requirement, did we miss the engagement, did we all learn something that we didn't know before? Once again, speed and agility appears to matter more than getting things 100% right from the outset.
Governance And Trust
Let's face it: most of our notions of good practices were born in the physical world. When considering traditional business models, we collectively have many decades of experience about how to identify risks, how to respond appropriately,
Move to a digital business model, and we're now tackling a new frontier. Even "born digital" businesses occasionally have highly visible bad days that appear to be a failing in some aspect of governance.
Of course, we're talking about security, but there's much more to the conversation: being aware of privacy and social issues as data starts to be inevitably used in new ways, making sure your "digital delivery factory" is always available and performant, increased sensitivity to global cultural expectations, as the internet is basically everywhere, and so on.
Face it: we're all going to have to learn new governance skills in this new world. The laws haven't been passed, the books haven't been written, and the rules are sort of being made up as we go along as near as I can tell.
Best to level set, invest, and get busy.
But there's more at play here than simple risk avoidance. Good -- and highly visible -- internal governance engenders trust during a transformation. Business people instinctively look for unknown risks; the existence of a strong governance gives business leaders additional confidence to push ahead faster than otherwise; accelerating a business model transformation.
Broader Platform Patterns
Clearly, most traditional enterprise IT leaders might be looking at this, and thinking "well, that doesn't look like us", and might be wondering how and where to get started. I've been fortunate enough to meet with a few people who are in that situation, and what they're doing about it.
There might be a better approach, but this is the best one I've seen to date:
1) Assemble a cross-functional team of IT and a few likely business stakeholders who are starting to think digital: marketing, customer service, etc. Position the sessions as strategy brainstorming sessions, not project planning or formal requirements gathering.
2) Get consensus on the big ideas -- the world is changing, we've got to change, and what can we do to start thinking through some common-sense preparation for the inevitable shift?
3) Review the organization's current (or near term) capabilities in each of these buckets. What's already there -- and could be repurposed?
4) Float a couple of use cases that might be bubbling up -- more than one. Do a quick mapping back to the capabilities -- any common functional gaps you're noticing? Make a list.
5) Now, do some visioning. Imagine you're on version 2 or 3 of some of these use cases. Imagine how the pieces might interact. For example, would analytical insight make great content over a mobile device? Would measuring how people interact with the mobile experience provide great analytical insight on new applications or business processes?
The goal here is to make people think more broadly about the interactions that tend to occur in every digital business model, otherwise stovepipe thinking sets in quickly.
6) If you're feeling brave, maybe sign up for piloting an initial use case. Make the use case your rationale for driving some increased focus in any of these areas you might be feeling a little light, e.g. governance, social. Position it as a learning experience for the organization, and not a de-facto project. The goal isn't to build yet another IT silo, but to use the use case as a lever to shift the focus in the organization.
Doing this has a couple of advantages that might not be apparent:
1) You've established your self as a leader (or at least a knowledgeable voice) on the topic. That means you're part of the conversation. That's a good thing.
2) You've directly engaged with the business people who'll be the first to start sourcing external services in an ad-hoc manner. That's good.
3) You've clearly communicated to your IT leadership team that there's change in the air, and it's time to start thinking about some new (and very interesting) challenges.
Funding, resources, technology selection, project management -- although those important aspects -- I'll leave for later :)
The Final Analysis
Traditional business models have started to shift to digital ones. IT can play a wonderfully strategic and transformational role in this metamorphosis -- if they choose to do so.
Yes, it's going to be hard / expensive / difficult / challenging / frustrating along the way.
But nothing good is easy ; nothing easy is good.