We are in a fast-paced world in terms of business and the constantly evolving technology. Companies and businesses are obsessed with being up to speed digitally and maximising on their digital prospects.
Most big companies in the world are investing a considerable amount of time and resources to refine their digital status. However, very few companies get it right.
It is important to comprehend why digital strategies fail. Technological progression makes it even more difficult to have a perfect digital strategy. With a close examination of why enterprises fall short in their digital transformation journeys, more can be achieved while crafting digital strategies.
So, what reasons contribute to the failure of digital strategies?
Failing to define the term digital properly
Leadership in most companies fails to clearly define the term digital strategy properly, making it impossible to establish an effective strategy. Digital strategies should not be about introducing a few digital initiatives in your business enterprise; it should entail integrating a number of digital solutions in enterprises and incorporating services to be one single working unit.
Misunderstanding the economics surrounding digital strategy
The economic impact of digital strategies is widely misunderstood. Various companies that have a good understanding of the economics surrounding digitalisation such as Facebook and Apple have reaped significant benefits. For organisations to learn how to put in place effective digital strategies, they must seek proper comprehension of the economics involved in order to use them to their advantage as they embrace digital transformation.
It is extremely important to have a grasp of modern digital economics, and how digital strategies affect the nature of competition in business. Furthermore, companies have no choice but to respond to the ever-changing competition driven by emerging and developing digital solutions. Failure to do this may steer a company in an unfavourable position, thereby lagging behind in terms of competition.
Thinking that digitalization involves creating entirely new leads
This is a misconception that many enterprises continue to struggle with. They think that if you want to harness the maximum potential of digitization, you should create entirely new leads. Moreover, finding ways to digitize existing leads works much better than focusing on developing totally new leads.
Completely new leads could drive a company to an unfamiliar direction. The organization should look to digitize their existing ventures first before they seek to create new leads. The chances of failure are much higher when companies attempt to incorporate new business models.
Assuming that digitalization rewards companies and followers who make fast moves
Conventionally, if a new business idea floated around in a certain industry, major players would sit back to observe those who were ready to get right into it. As they experiment and fail or succeed, the observing companies would follow suit with a much smarter approach, avoiding the pitfalls that the first enterprises fell into. However, this no longer applies in the digital era. The first to dive in and those who follow suit reap the benefits first.
There is a learning edge benefit that those who start early and their counterparts who follow promptly stand to gain. For instance, if an enterprise develops a prototype which harbours a lot of potentials, they get the opportunity to refine the ideas before others realise the potential of that particular product and start tapping into it. Tesla serves as a perfect example, with their electric car initiative; other players are still trying to catch up with them.
Past strategies are increasingly losing their effectiveness. This is because ecosystems are easily allowing digital embracers to move across sector borders and industries. Company leaders should now aim at a broader spectrum so that they can combat competition as well as not miss out on lucrative opportunities. Alibaba is an excellent ecosystem player; it has captured the kind of market that would have seemed impossible a few decades ago.
The digital era has caught momentum and is hastily taking over different industries all over the world. Enterprise leaders ought to understand the ins and outs of the digitalization if they are to successfully tap into the endless opportunities that the digital era is bringing about frequently. Once all the dimensions of digital strategies are understood, companies will be able to avoid the common failures and thrive to exceed their expectations on a digital perspective.