Whether from analysts, the media or a walk through the exhibit halls at CES and SXSW, we’ve all encountered the promise of the “connected” future. Within a matter of years, everything from the cars we drive and the refrigerators we stock will be software-powered nodes for communicating data about our gas mileage, dietary habits, vital signs and other ambient forces.
Now more than ever, these sleek, digital-first realities seem to be achievable goals rather than far-flung dreams. Any organization’s ability to deliver and capitalize on these experiences depends, however, on the strength of its internal foundation. Embedding digital technology and automation throughout core business processes – from accounting to inventory management and customer service – is the first step toward fortifying your organization against competitive pressure.
Preparing to Evolve Rather Than Waiting for Extinction
We’re in an era where industries across the spectrum are being upended not only by digital, mobile and cloud technologies, but by emerging competitors that have already mastered them. Altimeter Group Principal Analyst Brian Solid has coined the term “Digital Darwinism” to describe this environment.
The pressure to keep pace with digital innovation is palpable among the Fortune 500 and other industry stalwarts, many of which have gotten by with stagnant growth for decades. Take, for example, the TV and film sector: traditional studios are losing market share to disruptors like Amazon, Netflix and Hulu. These young, technology-driven organizations aren’t beholden to long editing, distribution or production cycles; they have the infrastructure and agility to churn out new content on a monthly, even weekly basis.
The real challenge for organizations today isn’t simply to keep up; it’s to understand that you can’t go from zero to 60 overnight. You can’t release new films every week, or ship that Internet-enabled pair of sneakers, unless your internal operations, supply chain and financial processes are up to par.
Understanding the Digital Core: What It Is, and What It’s Not
“Digital” has become a ubiquitous term across board rooms and executive conference calls. Depending on who you ask, having digital at the core, or heart, of your organization can mean a multitude of different things.
Putting digital at the center of your organization does mean moving away from analog processes, manual workflows and “tribal” operational knowledge that lives within a small group of employees. That said, embracing digital, efficient applications is not about replacing people with robots, but rather freeing employees to focus on more valuable work.
Another misconception is that, to become a digital enterprise, organizations simply need to integrate disparate digital systems of record. Just because a field worker can capture customer data via a tablet, and that information flows back to a CRM at corporate headquarters, doesn’t mean the process is inherently automated or triggers an intelligent action.
Before the promise of a fully optimized digital business can become a reality however, you need to first focus on establishing a strong foundation - your digital core. Your digital core is the heart of your business – it’s the automation of systems and tools that drive the engine of your company and enable you to build, grow and take advantage of all the incredible opportunities that the digital economy can bring.
Your digital core empowers your organization with automated, real-time visibility into all mission critical business processes and processes around customers, suppliers and your workforce. An integrated and automated core enables business leaders to predict, simulate, plan and even anticipate future business outcomes in the digital economy.
The journey to building a digital core will take time and the right strategy. If organizations hope to not only survive, but excel in this digital-first world, they’ll have to work from the inside out.