How digital is your organization?

Citation

Slywotzky, A. and Morrison, D. (2001), "How digital is your organization?", Strategy & Leadership, Vol. 29 No. 2. https://doi.org/10.1108/sl.2001.26129bab.003

How digital is your organization?

How digital is your organization?

Adrian Slywotzky and David Morrison

The lead article in this issue stresses the importance of moving to a digital business design. An important aspect of this move is shifting many of your company's key activities from paper-based processes to digital (usually online) processes. To obtain at least a partial measure of how digital your business is, complete the simple exercise below. Use it before you launch the process of moving to DBD, and it will provide a baseline reading; at any stage of the transition, use it to measure your progress.

Working quickly, check off your company's digital percentages. How much of your company's selling is done online? How much delivery of products, services, or information is done online? How much supply-chain management? Customer service? Billing? And so on.

The pattern of your checkmarks provides a rapid profile of your company. If most of your checkmarks are on the left, expanding your use of digital options may create tremendous opportunities for you to improve the customer relevance, talent leverage, and economic efficiencies of your business.

Suppose your competitors and other companies in your industry were to complete this exercise. How would your profile compare to that of your strongest competitor? How do you anticipate that comparison might change in the next 12 months?

The goal of digital business design is not (necessarily) to become 100 percent digital, but rather to offer the right solutions for your customers. The ideal formula will probably change over time; so should your profile. The digital innovators – Dell, Cemex, Schwab, and Cisco – have all moved from left to right in almost every part of their business profile, but they have done so only after articulating the business issues they needed to address. They knew that digitizing an irrelevant or low-value process is worse than not digitizing at all. If your company's profile falls consistently on the left, it is a warning sign (and a sign of opportunity). Competitors that have migrated further to the right are likely to be establishing advantages that will enable them to take customers and profits away from you.

On the surface, digital business design indicates how many of your business processes are conducted online. At a deeper level, it tells whether you have transformed the way you do business by taking advantage of the new strategic options enabled by digital technologies.

Finding your digital ratio