It’s no secret that virtually every industry is shifting towards creating a digital experience in addition to, or even in lieu of, their current retail spaces and streams of revenue. This trend has led more and more businesses to seriously invest in a comprehensive digital business plan.
However, what most business owners and operators don’t realize is that a successful digital business plan is more than just opportunities for goods and services to be purchased online. A successful digital business plan provides a seamless experience to the user from real life to virtual participation. Here are five points to consider that any successful digital business plan must answer:
Is the digital business plan investing in digital business or merely creating new digital channels?
Wildly successful digital business plans in the past have transformed their industry by blurring the lines between the physical and digital.
This is the key component of any digital business plan.
Take Uber, for example. Uber’s platform did not just allow riders to purchase taxi services through their phones, it created an entire new infrastructure through which drivers are mobilized. What followed was a cultural transformation that transformed the industry and shifted a huge amount of industry share towards a start-up with a fraction of the overhead of traditional taxi services.
These taxi services had been utilizing online payments for years, but their digital business plan did not think beyond creating a new point of service. Because Uber integrated digital aspects into the entire user experience, not just the part the financial transaction, and transformed their products and brand.
How should I prioritize each component of this digital business plan?
Before developing a digital business plan, a company needs to have a clear idea of the direction in which it’s going. That way, the plan will align opportunities pursued based around that vision. Any successful plan will need to analyze whether implementations will further that direction specifically. Without a clear prioritization ranking, business implementers are likely to choose the easiest and least expensive projects, which will not yield significant results.
A good starting point to help prioritize opportunities is to split them into separate categories.
Areas to consider are:
- Does it affect competitive position?
- Does it cause or address industry disruption?
- Does it optimize cost?
- Does it increase revenue?
Obviously that last one is a given, but increasing revenue cannot be the only consideration. Take some time to consider other areas and how they could strategically lead to an increase in the bottom line. No matter what, keep in mind that each priority will require a different strategy and approach.
What operational changes will be needed to implement this plan?
Along with a clear idea of priorities, any digital plan also needs a clear plan for implementation. Often, revenue needs to be moved around to implement the vision. The CIO and plan architects need to be clear upfront and across the board with operations.
Often digital business plans require a significant cultural shift within the organization.
It’s not uncommon that some employees jump on board excitedly, yet some are more reticent. A digital business plan should make allowances for this.
A good board and CEO will know that anything worth pursuing must have a cost to offset it. Explain the cost up front while emphasizing the potential transformative effects. Anything worth pursuing is going to have some costs associated with it.
What are the costs and risks?
Once it hit the market and became a huge success, Babolat’svirtual tennis racket seemed like a no-brainer. However, imagine what the brainstorming and development process must have looked like, what kind of vision and pioneering spirit it must have required to put the necessary funds behind it, funds that were eventually utilized to the max when it took off.
It was a risk that paid off in spades because the plan’s associated risks and costs were clearly spelled out even in its development phase. And because of it, Babolat was ready for it to take off.
Any comprehensive digital plan that can be expected to transform a company will have substantial risks associated with it. To assuage the fears of board members and the CEO, it is important to quantify those risks. Experienced officers know that any significant changes pose risks, and they know how to mitigate them if they know that they are.
And be thorough – consider changes in management, company assets, the company’s technological plan, and even the culture of the company. Some will rise to the excitement of a challenge and new venture, and some will want to jump ship.
The Cost of Not Pursuing an Overall Digital Experience
Before you consider the risks, costs and management shifts that occur from implementing a digital business plan, you must consider the risks and costs associated with not pursuing a digital business plan. Any plan presented to them should be aspirational and enumerate what is potentially gained from the costs and risks. However, they should also be aware that not pursuing digital business opens opportunities for competitors to change the competitive landscape to their advantage instead.