This article was originally published in ciol.com and has been reproduced here with permission.
As the digital economy continues to evolve, so too should the way businesses operate, in order to continue to drive value, enhance customer experience, and build sustainable business models.
The term “digital economy” originated during the Japanese recession of the 1990s, and gained further focus through Don Tapscott’s 1995 book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” – one of the first books to consider how the internet would change the way we do business and the way businesses operate.
Fast-forward almost 30 years, and the definition of the digital economy has evolved – as has the way we consume and do business.
What is the “digital economy”?
In short, “digital economy” is the economic activity resulting from billions of everyday online connections between people, businesses, devices, data, and processes. With digital technology continuing to transform the way such economies operate, there are five fundamental areas being heavily disrupted that organizations should consider:
- Digital exchange – A basic component of any market economy are the billions of daily transactions running through it, and how modern technologies have disrupted the way such exchanges are being made
- Digital supply network – The merger of digital and physical production and distribution methods. Bringing together Artificial Intelligence (AI) and the Internet of Things (IoT) to turn linear supply chains into interconnected, scalable systems
- Customer experience – In the digital economy, personalized outsourcing is enabling our customers to interact with businesses whenever, wherever, and however they want, in increasingly convenient ways
- Augmented workforce – Re-purposing the work our people do and combining this with AI means the nature of work will change
- Digital connectivity – The melding of the physical and digital world brings together our assets into a digital domain where software dominates. Just imagine if your organization had a view of its physical and digital asset inventory at any given moment, enabling it to operate at a level of precision previously unimaginable and paving the way for you to move closer to becoming a lean enterprise.
Out with old, in with the new
But what exactly does all this mean for organizations? Traditional operating models will need to evolve, as operations, processes, and technologies adapt to cope with the volume of data and the way in which consumers are paying for and experiencing new products.
To continue building value and providing compelling customer experience and service at lower cost, organizations should commit to developing a next-generation operating model that delivers:
- Integrated operations – Centered around customer journeys or personas and the interactions customers have with the organization when making purchases, receiving goods, and internal journeys such as record-to-act (R2A), procure-to-pay (P2P) and order-to-cash (O2C). This requires us build a network of relationships that re-examine what organizations can and should do both individually and together within the network, breaking down the internal walls to enable faster and easier buy-in from the business
- Enhanced customer experience – Through adopting a multi-lever, multi-dimensional, sequential approach that leverages intelligent automation and AI to achieve straight-through processing, and enhanced analytics, monitoring, and knowledge across the organization.
In short, to keep up with the pace of change, organizations needs to re-design and re-imagine operating models to be more open and expansive to change through thinking multi-laterally and breaking down traditional silos to connect better internally.