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Where you get the greatest bang for your digital buck

on August 11, 2015

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In my previous post, I shared how the pace of digital transformation ties directly into the business’ prosperity. Those who don’t innovate will become irrelevant – a concept that many are now referring to as Digital Darwinism.

But according to PwC’s 2015 US CEO survey, 58% of CEOs see the rapid pace of technological change as a challenge. Understandably so, driving digital innovation isn’t easy. While most businesses have a backlog of ideas, you also need the right timing, people, processes and platform to bring each idea to market. Moreover, you need to accomplish all this without hitting the breaks on other critical business projects.

So how do businesses drive digital innovation successfully? According to the CEO survey, 86% say that you need a clear vision of how digital technologies can help achieve competitive advantage. And 83% say that you need a well-thought-out plan including concrete measures of success for digital investments.

Planning is always important – as is measurement – but you also need to know where to begin (and how to be flexible within your existing plan). When digital technologies are disrupting every avenue of your business, how will you prioritize? Which ideas do you test first?

It’s easy to point to customer experience, as consumers are often driving digital change through heightened expectations. However, most CEOs, according to the PwC study, point to operational efficiency as the area where they have seen the best return on digital investment. Return on digital investment is also proven to be high for projects associated with data and data analytics and for projects that tie into the customer experience.

PwC-CEO-survey

Upon closer review, it makes sense that digital solutions that focus on internal operations and reporting create the most value. For starters, PwC found that 71% of CEOs say they’re cutting costs this year – the highest percentage since PwC began asking the question in 2010.

Digital innovation, as whole, offers a productivity boost. Where you may have required a week to run and analyze a report – you can now automate, saving staff time and reducing the cost of service and support. And when your ultimate goal is to cut costs, digital solutions that offer these types of savings jump straight to the front of the project list.

Consider how you can automate complex internal workflows, enable faster reporting and decision making, and empower your workforce through new applications that enable better access to data and better mobility.

Related: Driving Innovation, Q&A with Industry Experts

But remember, it’s not all about ROI…

It’s also about building internal momentum. Your business’ digital transformation isn’t going to happen overnight. To ensure success long term, you also need to build internal acceptance and interest in change. The best way to build internal excitement is through project successes. Ultimately, you want your business engaged, providing new ideas, sharing feedback on existing projects, and helping drive digital transformation.

And to accomplish this, you need to look beyond any operational efficiency project. You also need to look for a project that is highly visible across the business, but can stand alone in production (i.e.: it’s not just a piece of a larger project). These ‘island’ projects have the right urgency and leadership support to ensure your project gets noticed and your successes get shared.

They also have the support necessary to test out new development practices, which is ultimately essential if you wish to achieve speed to market and business and IT project collaboration.

Take this tip from Kao, one of the world’s largest companies and a leading manufacturer of premium beauty-care brands. Kao needed to innovate how sales associates ordered supplies so the team decided to extend its existing SAP system with a mobile order-entry application.

This new application provides real-time access to inventory information and immediate entry of their sales orders. With the new iPad app, Kao’s 300 sales reps each save up to two hours per day, results that created excitement across the business. With this success under the company’s belt, Kao is now able to re-use the SAP connector for additional operational efficiency projects, providing the greatest bang for its digital buck.

driving-innovation-book-imageDigital innovation is reshaping how businesses engage and transforming how they go to market. But driving digital innovation isn’t a straightforward goal. Download this eBook for best practice advice from digital innovation experts, Michael Krigsman and Eric Roenker.

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