Digital Rookies

I was fortunate to be invited by Karl-Heinz Streibich to interview 40 of the most sophisticated companies in the world for his book The Digital Enterprise. That was in 2013 and by now these companies are miles ahead in their digital journeys. And at the same time, I see every outsourcing firm and software company has watched them and are talking about digital transformations. I must admit many of their approaches appear very rudimentary.

Here are some common fllaws

a) They talk about digital Dinosaurs when they should be talking Phoenix.

You know the quickest way to lose digital credibility?  Use Borders, Blockbuster or Kodak as examples. Executive eyes rolls as they hear yet another vendor try the FUD “If you don’t work with us, you will suffer a similar fate”. They have heard it for a decade now from more vendors than they can recall.

Far better to talk about companies which have gone through traumatic times and diversified and continue to survive.

On the New Florence blog, I have examples of technology and Lego, Marvel, BP salvage operations after the Gulf spill, how railroads have been reborn. In my other books,I have examples of how Aircell has been reborn as GoGo  the wi-fly service, how Delta Airlines has reinvented itself with technology, how GM’s OnStar has repeatedly been recast, how Corning seems to have major impact on mainstream technology every decade or so and others.

b) They only have examples from a narrow part of the enterprise

Way too many vendors have examples of social marketing and collaboration and tend to define a narrow role for the Chief Digital Officer. In my interviews for The Digital Enterprise, I was struck by how wide a swath the role should cover. In talking to companies like GE and Nissan, the digital opportunity is in smarter products and services – technology embedded in them. In talking to CPG companies like Coca Cola Enterprises, the emphasis was on digitization of the customer channel. In  talking to banks and insurance companies like Standard Chartered and Allianz, the focus on digital security and privacy came through very clearly. In talking to companies in industries like travel and media which have been ravaged by technology upheaval, the intense focus is on business model innovation for the digital world. In talking to several companies in Germany where the term Industrie 4.0 is a watchword, the digitization of the shop floor and logistics via robotics, telematics and other technologies came out strong.

c) They tend to propose COTS solutions

Way too many vendors propose off the shelf packaged software and standardized hardware, sensors etc. Imagine if you had proposed that to Disney as it rethought its park experience and came up with its MagicBand. Digital transformation projects are strategic and need differentiation, not technology any competitor can buy and  negate the barrier to entry. So, you may have  a strong SaaS or IoT practice but unless you can dramatically customize your offerings you look like many of your competitors

d) Their process/talent thinking has not evolved

Many vendors have spray painted their “best practices” from their ERP businesses to make them appear relevant for new digital models.  Few reflect the dramatic changes industries are facing. Go to London and see the huge range of startups which are targeting specific pieces of traditional financial services companies – some focused on international funds transfers, micro-loans, mortgage crowdfunding, direct debit processing etc. Look at the countless new ways people pay each other these days – with procurement cards, EFTPOS, PayPal, Bitcoin and many others when their software still primarily assumes payment by check.

Worse, they still have traditional roles assigned to specific processes, when all kinds of scanners, drones, wearables, robotics, sensors should be part of the new configuration.  Ownership of such "machines" is fragmented in most companies—the plant manager likely knows about shop floor robots, and someone in IT may know how many web services or service bots are deployed, but few companies have an executive responsible for coordinating all their automation efforts.

Too many vendors are making rookie mistakes. They should have been making such mistakes 5+ years ago. Many offer little new thinking to customers in a fast changing world.