The Government's newly released National Innovation and Science Agenda shows that for economic growth to continue within Australia, an 'innovation ecosystem' must be fostered, where new businesses with new ideas are encouraged to grow and flourish. With every company wanting to increase, retain or improve their customers’ experiences, this makes marketing vital to fuelling Australia's ideas boom.
More than 90 per cent of global business executives believe digital will disrupt their business over the next 12 months, yet two-thirds mistrust their own digital strategy, new research highlights.
According to Forrester Research’s latest report into digital strategy, The Future of Business is Digital, three quarters of businesses surveyed are taking action with a digital strategy in the next year to meet the digital disruption challenge facing their organisation. More than half also believe digital technologies are a major driver of business strategy.
However, only one third of respondents think they have the right digital approach, and just 21 per cent claim the right staff are setting strategy. In fact, only 15 per cent said they had the necessary people and skills in place to execute on their digital strategy, and just 14 per cent are confident about their processes.
Among the top barriers cited in the report are organisational inertia and functional limitations. For example, two-third of employees believed functional departments are too fixed in their ways, while 68 per cent of business unit leaders said the functional teams in their companies are barriers to effective coordination.
Only 21 per cent agreed their CEO has set a clear vision for digital in the business, indicating top-level readiness is another major issue.
“The organisational structures, processes and ways of working that have proven so successful in the past are now your firm’s greatest enemies in its race to embrace digital technology,” commented report authors, Nigel Fenwick and Martin Gill.
When it comes to functional areas most impacted by digital, marketing tied with ecommerce and IT, followed by sales.
Forrester highlighted two key ways of addressing the digital challenge today: Digital customer experience; and digital operational excellence. On the customer experience front, organisations should be looking to digitise the end-to-end customer experience, along with products and services as part of the value ecosystem, the research authors stated.
“Digital businesses understand that if they are to win in the age of the customer, customer experience is their only differentiator,” the report stated. “Success means investing in customer experience as a discipline within your organisation… Rather than treating digital as a channel, focus on delivering digitally enhanced experiences that add value in the context of the customer’s needs.”
Operationally, organisations need to source enhanced operational capabilities within a dynamic ecosystem, drive rapid customer-centric innovation, digitise for agility over efficiency, Forrester said.
“The key characteristic of successful digital businesses is their ability to position themselves as ecosystem players,” continued Gill in a related blog post. “ They acknowledge that they can’t do everything themselves, so they turn to dynamic ecosystems of partners to extend their internal capabilities.
“And likewise, they understand that their customers see them as just one supplier in an ecosystem of firms they turn to. This drives a different approach to designing products and services in the digitally networked world.”
The research firm also identified several classifications businesses could use to size up their current digital readiness, as well as provides a framework to achieve them. This list starts at ‘digital dinosaurs’ that need help beginning their transformation, then ‘digital connectors’ that understand digital customers but aren’t yet operating digitally. An example of the latter is British Airways, which RFID-enabled its baggage handling capabilities.
Forrester’s third level, ‘digital operators’, are creating digital efficiency and reaping revenue rewards but don’t focus on customer experience, such as PG&E and Telefonica. At the top of the tree are ‘digital masters’ who excel at digital thinking and have embraced both digital customer experience and operational excellence. Companies at this level include Burberry and USAA.
The Forrester report was based on a survey of 1254 global business executives at organisations with at least 250 employees.