What is a Digital Strategy?
A brief explanation and introduction
Definition of digital strategy
A digital strategy is an action plan for implementing digital transformation in a company. It includes the development of digital business processes, digital marketing and digital sales as well as the development of digital business models. All departments of a company are involved in the development of a digital strategy.
Digitalization requires a fresh approach to strategic planning: the development of a digital strategy. In addition to the vision – a vision of the role a company wants to have in the digital markets of the future – it includes concrete measures and projects for the digital transformation. The digital strategy also serves to inspire employees to embrace digital innovation and make them active drivers of change.
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The building blocks of a digital strategy
While business innovation in the past often only comprised product development, innovation management, idea management and the continuous improvement process, the development of a digital strategy is much more complex. It affects all areas of a company. The first building block is the transformation of analog processes and procedures into digital ones. In many cases they are completely redesigned. Digital technologies make it possible to reinvent processes by using the swarm intelligence of employees and conducting innovation challenges. Employees of a company can be involved in the collaborative development of digital strategies via platforms such as the Innolytics® innovation management software. As in the case of Gerolsteiner, they jointly develop the elements and ideas for implementing the digital strategy.
The development of digital processes and procedures affects all areas and departments of companies: From corporate management through human resources and production, marketing and sales to finance.
Another building block of a digital strategy is the creation of digital customer relationships. The main objective is to determine which digital services customers expect from a company or could expect in the future. Digital services enable customers to take greater advantage of a company’s products and services, but they are often not a source of revenue on their own. This building block of a digital strategy ensures that a company remains competitive. A third building block is the development of digital business models, which generates independent added value. Companies’ digital services provide such a high added value to customers that they are willing to pay for it.
Development of a digital strategy
A digital strategy is developed in several successive steps, which are described in detail here.
Using a trend analysis, the effects of digitalization on a specific industry and the expected changes are explored. Which key technologies will change the industry? How will competitors develop? Which innovative applications are noticeable in their early stages?
The digital needs for an enterprise are defined: How digital will workflows, processes and production techniques become in the coming years? Which form of digital customer relationship will emerge in the coming years?
Concrete use cases for a company are defined, discussed and evaluated.
Definition of a Digital Roadmap. Development of an action plan for the implementation of the digital strategy: projects for the digitalization of internal processes and procedures, projects in the various departments, projects for the design of digital customer relationships and projects for the development of digital business models.
The implementation of the digital strategy often follows the principles of agile project management: Instead of a static action plan, digitalization projects are regularly evaluated and redefined. Because of the high degree of uncertainty associated with digitalization, it is necessary to regularly review projects, change them or even terminate them. Being aware that certain projects can fail is an important prerequisite for the successful implementation of a digital strategy.
The Innolytics® Innovation Management Software supports all steps of the process of developing a digital strategy. Different departments and hierarchical levels of companies are collaboratively involved in the process of developing a digital strategy.