Digital - an Introduction

July 4, 2016

What does Digital really mean? 

 

There's something a little existential about using a Digital solution to understand the meaning of Digital - but lets Google "what does digital mean?".   

Unfortunately, like the human brain - a complex organ but not sufficiently complex to understand its own complexity - Google, a digital solution to the core, fails to come close to a satisfactory definition of Digital.


The answer Google spits out - something about zeros and ones, or a digital watch - fails to capture our basic grasp of Digital.  Whilst most of us in business inherently understand Digital as being something to do with Technology (think Websites, Cloud & Big Data), or ways of engaging with people (think Social, Mobile), or a new way of working (think Uber or AirBnB), we struggle to nail this much used term.  

 

So, where do we go for a definition of Digital, which surely we need to fully understand all its appendages; digital disruption, digital transformation, digital evolution, digital darwinism, and associated terms; the 4th industrial revolution etc.

 

Fortunately, McKinsey & Co. wrote a paper "What digital really means".  

 

This is a great paper and well worth a read. 

To summarise, McKinsey say that digital should be seen less as a thing and more a way of doing things.  To quote the article, "for some digital is about technology. For others, digital is a new way of engaging with customers. And for others still, it represents an entirely new way of doing business."

 

None of this is necessarily incorrect - but I still want more definition around the term digital.  If you read the detail of the McKinsey paper, it can be summarised as follows.  

 

There are three core attributes to being digital and six core capabilities.  

 

 

1.  Creating value at the new frontiers means developing entirely new businesses or identifying and going after new value pools in existing sectors. This is great stuff but it's not accessible to most enterprises.  The definition can apply to start-ups or innovation labs but most enterprises want to apply digital to their existing business models.

 

2.  Creating value in Processes around customer experiences includes new capabilities to improve how customers are served.  This includes obsession with understanding each step of a customer’s journey — regardless of channel — and thinking about how digital capabilities can design and deliver the best possible experience.  This includes personalised websites and is what most Marketers would understand as digital. 

 

3.  Building foundational capabilities is about technological and organizational processes - using digital to be agile and fast.  Mindsets is about using data to make better and faster decisions. System and data architecture is about IT.  McKinsey talk about 2-speed IT - decoupling legacy systems - which support critical functions and run at a slower pace - from those that support fast-moving, often customer-facing interactions. 

 

Let's look at other thought leaders; BCG, Bain, Accenture, KPMG, Deloitte... and the analysts, Gartner, Forrester etc.  They are much of a muchness - I have a detailed analysis if anyone is interested.  Here's my summary of one example, BCGs digital fitness model: 

 

BCGs Digital Fitness Model includes 5 pillars and 22 capabilities.

In short, BCG state that consumers want faster service across a range of platforms, and they want products that are tailored to their individual needs and preferences.

 

As you can see, this model isn't too dissimilar to McKinsey's, albeit in a different order.

 

What others?  Well, flevy.com published 20 papers on digital transformation - enjoy :-)  

 

 

My takeaway from reading all these papers is the term Digital is now almost meaningless.

 

Digital Business just means Business. 

Digital Transformation is just Business Transformation. 

Certainly Digital Marketing is now inherent in Marketing.

We don't need to specify the 'digital' part.

 

That said, digital still infers something.  I personally like to go back to the McKinsey paper and say digital can mean a number of things - but digital is mostly a way of doing things. When you look at those things, a common theme is DATA. Perhaps it's here that the true meaning of digital really lies.  In using DATA.  

 

I will write more on the topic of Data.  Watch this space.  

 

 

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