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Digital Strategy and its Execution – The IBM Example

An excellent example of how organizations should go about setting their digital strategy and executing it comes from IBM. Any organization looking for some tips and motivation on how to do it should look at how IBM started to address this a few years ago. In IBM’s example, we learn the importance of setting a formal digital strategy (IBM calls them strategic imperatives), establishing a roadmap for its execution, putting in the commitment (dollars and management accountability) behind those initiatives and finally in executing those strategies. For IBM, the proof has been in the double digit returns that they have seen from most of the strategic imperatives that they had charted.

A few years ago, as the world had started to grapple with the waves of digital disruption, IBM recognized the far reaching impact of the cloud platform, and Big data and analytics. As a consequence, IBM established certain strategic imperatives to guide their plans for the next few years around those disciplines and started to invest (and divest) heavily to attain the vision underlying those imperatives.

Fast forward 3 years and we see that after investing billions of dollars to build its cloud platform, IBM is nearing 50 data centers worldwide that are delivering cloud services (Iaas, PaaS, DBaas, and SaaS) to its base of worldwide customers. Accordingly, they also invested in analytics (based on their Watson platform) and now have APIs ready where enterprise customers are able to incorporate ‘cognitive’ capabilities in their  solutions by calling in those APIs. More impressive is the fact that these investments resulted in double digit returns the year after IBM started to invest in these strategic imperatives.

The digital services mentioned above is not a complete listing of the digital opportunities that IBM has been able to capitalize on over the past 3-4 years since they formulated them. The point is for enterprises to take note from the lessons learned, which can be summarized as follows:

  • The need to establish a formal digital strategy based on the disruptive trends in one’s own industry and market
  • Creating a roadmap to execute those strategies
  • Ability to execute those strategies and monitoring the progress
  • Being bold to invest as well as divest accordingly in executing those strategies.

As I have asserted in the past, how organizations are able to execute effectively in the next few years to get through the digital transformation that the world is going through will determine their success and position within their industries.



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