Digital Strategy: What are the Key Economic Factors?

Companies, large and small, are being told that ‘going digital’ is essential for their survival in the current economy. Even governments across the world are adopting a digital approach to service delivery and brand management. For governments, being able to provide self-servicing to their customers 24/7 is an important strategy for making savings, especially with public budgets becoming tighter. In addition, in an age where citizens are used to seeking and communicating information in digital form, it becomes paramount for governments to navigate confidently in the same territory where their citizens move.In the private sector, the motivations are similar, but the economic factors driving a digital strategy are quite distinct.

Early adoption

As illustrated by Geoffrey Moore’s famous chart, early adoption of new technologies is averted by most companies. However, in the fast-paced world of technological advances, companies can easily be left lagging behind if they are not careful, incurring the risk of financial loss when trying to catch up with the bandwagon.

The Harvard Business Review advises CEOs to think of two critical economic factors: the cost to add a customer to the platform and the cost of changing the platform to accommodate changes in regulations, user preferences, or technology. “A good digital business minimises these costs and protects the platform against changes in the user base, technology, and regulatory environments” (ibidem).

Productivity

Most paper-based processes are obsolete nowadays. Still, a lot of organisations, especially larger and older corporations, still rely on many manual menial tasks being performed. Government agencies are the major culprits in this department, with many still having full-time employees solely performing tasks that could otherwise be automated.

This aversion towards automated processes reduces productivity. Employees could be performing other tasks that help the business move forward quicker if assisted by technology. “Businesses and governments should increase their use of digital technologies to transform business processes and improve efficiency and productivity” (Accenture).

Brand management

Brand management in the digital world is a paramount economic factor for any organisation. To not invest in this is to expose the organisation to several vulnerabilities.There has been an increase in the number of review platforms such as Tripadvisor and TrustPilot. Consumers will write reviews and make decisions about what products or services to consume, based on the review of other users. Not keeping abreast of such tools can have a devastating effect on a business if it affects its image.

Social media platforms are the other big players in the brand management game. Consumers deliberately use social media as a way to expose publicly a brand’s flaws, but also their success stories. These platforms can make an organisation more exposed, but they also enable organisations to keep a closer relationship to a wider audience and to respond quicker. “The true value of your product or service is [...] hidden underneath misguiding layers of press, media, word of mouth, publicity--all which make up your unique brand” (Inc.com).

Don't miss any update on Digital Jobs, Conferences, and Programs

Big data

The amount of data and information being produced and made available online has been increasing exponentially for the past decade. The advent of mobile devices has enabled the ubiquity of tools such as social media, prompting people to generate new data and information, constantly.Companies produce much larger sets of data by automating processes and adopting new ones. In addition, increasing amounts of data and information are made available from a plethora of sources such as crowdsourcing, government agencies, academia, social media, and so on.Dealing with and managing such large and ever growing datasets can be daunting for companies. Only by using appropriate technological tools can companies make sense of all the information they are now able to accrue.

Things to consider are, firstly, the laws and regulations associated with the acquisition, processing, and storage of data and information; secondly, how to use such data and information for the benefit of the business. There has been an increase in the offer of Business Intelligence solutions, with software packages of this type being now quite easy to use and affordable, even for smaller businesses. Only by using the analytical power of such tools can a company make sense of such large quantities of data. “Economies and businesses must use the Internet of Things and other digital technologies to enhance access to and the use of vital factors of production such as land, talent, capital, and ideas”  (Accenture).

Submitted By: Irene Melo

Posted: Nov 29, 2016