How to forge the 'digital edge' | IT-Online

Digital technology and the Internet of Things (IoT) are opening up new opportunities for companies to create new sources of customer value and revenue streams, according to Gartner. However, meaningful digitalised revenue opportunities are difficult to access and address, leading to significant challenges in establishing a fully digitalised business.

In the e-book ?The Digital Edge: Exploiting New Technology and Information for Business Advantage?, launched this week, Mark McDonald, group vice president and Gartner fellow, reveals how forging an edge requires new thinking and new approaches for bringing together digital and physical resources. The result is a new source of advantage, where technology supports growth.

Mr McDonald is discussing some of the key findings from the book at Gartner Symposium/ITxpo 2012, which is being held in Barcelona through 8 November. He is explaining how the increasing density of digital technology is fuelling new kinds of innovation that can provide organisations with a digital edge.

?The first wave of business investment in technology created the modern IT-enabled enterprise by automating and integrating back-office and operational processes,? says McDonald. ?Then the internet wave of investment created electronic copies of analogue business models in the form of e-commerce, web stores and the like. Digitalising the business represents a new wave that will drive business investment in IT, based on the evolving capabilities of mobility, analytics, social computing, communications and cloud technologies.?

Gartner says that a digital edge comes from creating new combinations of analogue and digital resources resulting in new sources of customer value and company revenue or results. Analogue resources refer to the people, how they are organised, the equipment they use, the facilities they work in, as well as the company?s other physical aspects. Digital resources include information, customer history, situational awareness, and so forth. Digital resources also include the equipment that processes information such as mobile phones, tablet computers, sensors and computer controlled machinery.

However, a digital edge rests on more than the relationship between analogue and digital resources. These types overlap in the sense that organisations can achieve similar goals with different types of digitalisation.

?Selecting the right type of digitalisation rests on the scope and requirements of the outcome a company seeks from digitalisation,? says McDonald. ?The outside-in process for building a digital edge starts with an outcome that provides the basis for working outside-in. The results build up a digital edge based on achieving specific outcomes in the context of an overall theme or value proposition.?

Building a digital edge involves more than putting a web facade on a brick-and-mortar operation. Companies who give themselves a ?web-lift? merely add sales channels that are easy for others to imitate. Developing the alternative, a digital edge, involves creating new connections and capabilities across the organisation. Companies must build up their internal digital capabilities to produce externally relevant outcomes and results.

?Companies have a choice. They can apply new technologies to achieve even greater levels of operational integration and control, a technological approach to business based on making the organisation better. Or they can fully digitalise,? says McDonald. ?Fully digitalised businesses are already emerging, and they represent the superior choice because they go well beyond the familiar models that rely on advertising or freemiums.?

Source: http://www.it-online.co.za/2012/11/19/how-to-forge-the-digital-edge/

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