A lot of conversations I hear these days on digital topics reveal an inordinate amount of fear, either of what the competition is doing or of not doing enough with digital technologies. I refer to this as FOMO: fear of missing out. But digital initiatives driven by FOMO are doomed from the outset and seldom lead to any tangible business value.
IT investments used to be made after much deliberation and negotiation with line-of-business sponsors. (This is still the case in most large enterprises.) Investments were made based on risk assessment, projected ROI, and clearly spelled-out business value.
In contrast, digital businesses and startups build out IT platforms and applications based on an eyeballs, clicks, and a customer acquisitions model in which revenue is king and ROI and profit is a futuristic aspiration. They are further advantaged by not being burdened with hard-to-maintain, siloed legacy systems.
It’s understandable that enterprises afraid of disruption from nimble, high-spending startups are driven by FOMO to emulate their models. But to succeed, they must understand the business value they’re looking to achieve.
Digital technologies represent a unique opportunity: the ability to accelerate or compress parts of the value chain without wholesale process reengineering or full-scale legacy modernization. These technologies are cheaper and quicker, and they can be combined in a multitude of ways.
Thus, as an antidote to FOMO-driven digital approaches, I recommend focusing on clarity of vision: what outcome does the enterprise seek? Once the vision is created, instead of ad-hoc emulation of the IT moves of the nearest disruptor, the enterprise can clearly identify which markets, channels, services, and products it wants to safeguard or consolidate and which new ones it wants to bring to market.
What’s different here is that (1) the opportunities are determined by applying a digital lens to the enterprise domain and (2) this is a collaborative exercise. The decisionmaking is shared between the line of business, the CMO, and the CIO (or what I would call the “digital collective”).
Areas for digital enablement should be selected based on the answers to questions raised by the digital collective. These questions are informed by digital but have a clear business objective, such as:
- Which enterprise data can be blended with social sentiment to feed into product design or supply chain management?
- Which legacy functions can be wrappered and surfaced on mobile devices to reduce customer friction and create more online revenue?
- What new services can be quickly developed and rolled out in cloud-based environments?
- Which product-pricing data can be shared in real time with distributors or partners?
- What thresholds need to be created for critical points of failure to better predict and prevent errors, omissions, delays, or non-compliance?
Creating a vision and collaboratively assessing which areas are ripe for digital intervention will result in an effective, achievable roadmap that is not driven by FOMO, leading to fast ROI and strong business value.