Why strategy and delivery need to go hand in hand in this Digital world

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Traditionally organizations have split business strategy and its implementation in a waterfall model.   Strategy was for the high thinkers and business consultants; undertaken as a stand-alone activity within a small secretive team, it often spanned several months before a grand reveal to the rest of the organisation.  The strategy would then be reviewed on […]

Traditionally organizations have split business strategy and its implementation in a waterfall model.
 
Strategy was for the high thinkers and business consultants; undertaken as a stand-alone activity within a small secretive team, it often spanned several months before a grand reveal to the rest of the organisation.  The strategy would then be reviewed on an annual basis to ensure it still made sense so that it could be reiterated to the masses.
 
Implementation was for the business change and technology teams, following a multi year, high-level plan.  It provided certainty against which significant investment decisions could be made, often supported by long term business cases promising to deliver huge operational efficiency gains.
 
Only when a major disruption occurred either in business performance or market forces would the strategy be properly revisited and the cycle started over again.
 
However, the rapid emergence of Digital technologies – social, mobile, analytics and cloud – completely changes the dynamics and speed of change for today’s organizations.  The concept of a strategy that would last for several years is gone, along with massive, long term, expensive technology projects.  Making technology choices today, with a plethora of new services readily available in the cloud, is harder than ever – and so is making a return on that investment.
 
Our research with MIT on why organisations are struggling to drive digital transformation shows that only a small proportion of organizations are delivering the profitable promise for their digital investment.  The research shows that those that have mastered a coherent strategy (the Digerati) are delivering 37% more profitability than those who spend a similar amount on their digital investment but without strong governance and direction The Fashionistas).
 
There are two significant challenges to overcome to stand a chance of turning your digital investment into a profitable return.  Firstly, these emergent technologies and opportunities require collaboration across the C-Suite like never before.  Predictions like ‘the CMO will spend more on IT than the CIO’ should sound alarm bells – individual departments don’t spend money and buy capabilities, the Business does!  And if it doesn’t do so in a completely joined up manner the results will  be  inevitable; multiple systems, many sets of customer data, lack of security and data protection and a customer who goes elsewhere when they cannot receive a consistent experience across all touch points.
 
The answer to this challenge isn’t the appointment of a CDO, it is a concerted effort to fully align all of your key stakeholders through a unifying business vision, supporting strategy and integrated and strong governance.  Bringing all departments together to focus on business and customer outcomes and integrated technology and business change plans will lead to consistent, profitable outcomes.
 
Secondly, the business needs to develop strategy, business change and technology plans in an iterative manner against an agreed Vision, adopting much more of a ‘test and learn’ culture.  Rather than committing to new technologies, licenses and costs up front, proofs of concept should be used in real business scenarios to fine tune the implementation and prove the return on investment.  Only when all stakeholders are agreed on tried and tested outcomes should they be committed to full scale roll out.
 
We call this ‘2 steps ahead’.  At any one point in time the organisation would be rolling out a new capability, testing the next one in a specific business scenario and thinking about what’s next – 2 steps ahead.
 
To find out more about the Collaborative Business Experience, and “Digital. Two steps ahead” contact Capgemini.

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