In this article, I will focus on the topic of delivering business value in the realm of the digital world. First, let’s revisit the definition of business value. Business value refers to any activity or results from that activity that is aligned with the strategic objectives of the organization. Within the digital context this means that the activities that an organization engages in the hopes of achieving certain results must be aligned to the overall digital strategy of the organization. The results are about what we normally would discuss in the context of basic business fundamentals such as increasing revenue, improving profit margins, optimizing business processes, improving shareholder value, and so on. However, when discussing business value in the context of the digital world, we usually mean getting the basic business fundamentals to work in the context of the overall digital world in which the business operates.
In an earlier post, we discussed four components of an organization’s digital strategy. They are as follows:
- Digital Channels – Refers to the channels of the Internet and the digital world through which audiences (customers, visitors, etc.) touch an organization.
- Digital Audiences – Refer to customers, prospects, visitors, users, etc. of the digital world.
- Digital Experiences – Refers to online experiences that digital audiences experience while interacting with digital assets and properties of the digital world.
- Digital Platforms – Refers to the digital systems, apps, websites, blogs, etc. that organizations build to serve their audiences.
The figure below illustrates delivery of business value in the digital world. The business value in this case depends on the interplay of the four components through the internal business processes and its organizational culture.
This diagram on delivering business value in the digital world essentially forces an organization to ask the following questions:
- Do your digital audiences like your products and services?
- Do your digital audiences trust your business enough to conduct business transactions?
- Are you reaching out to your audiences and potential customers on all possible digital channels where they may live?
- Are you offering the right digital experiences to your digital audiences on all the digital channels on which you conduct business?
- Are your digital channels up to the task of delivering the above in an optimal fashion?
- Have you re-engineered your internal and external business processes to align with the above?
- Have you established an internal organizational culture in line with your strategic objectives and the realities of the digital ecosystem in which you operate?
By taking a hard look at these questions will help you formulate appropriate business strategies that will help you in growing your digital business.
A few points about maximizing business value in the digital world are mentioned below:
- Optimal digital business value delivery is about using the traditional practices of leadership and discipline – only in a different environment.
- Competition in the new digital environment has necessitated new rules for delivery that include agile and lean practices.
- Business value in the digital environment is about defining new business capabilities that are relevant to the digital world. The newly defined business capabilities must be aligned to an organization’s strategic objectives.
- The new digital environment (including new digital processes, etc.) necessitates new ways of measuring business value that must be done at various levels of the organization.