6 Ways to Focus the Business Case for Your Digital Strategy
Bring Clarity to Your Decision-Making
Making a decision to invest in digital technology needs a business case for the same reason as any other business investment – so that you are clear about what the investment must return in order for you to support the decision. However, the focus of your business case for digital transformation will be very different depending on what you want to achieve.
Here are 6 possible drivers for your decision to undergo some form of digital transformation and the associated focus that your business case needs to have to ensure that the right decisions get made.
Driver 1: I want to improve a limited set of metrics in my business
Your business case will need to stay sharply focused on the selected areas which drive the targeted metrics. It may be quite a challenge to isolate the investment needed just to address the selected metrics – for example, if your targeted metrics are days outstanding and $ receivables, how extensively do you need to invest in your accounts system across the board in order to impact these two metrics?
Driver 2: I want to improve the financial performance of my business across the board
A thorough analysis of your entire business operation may be needed to identify the areas where you are most likely to be able to increase revenue and/or decrease costs. Most commonly you will find “low hanging fruit” which should be the priorities when it comes to digital implementation, as these will reward you with early wins in achieving your business case.
Driver 3: I want to outclass my competition
Improving the customer experience is one of the most achievable and most rewarding benefits of digital transformation. As well as an improved interaction with your customers, you may also be aiming for more competitive pricing, better quality and breadth of offering, improved service or all of the above. Here, your business case will focus on such objectives as increasing market share, diversifying your customer base, increasing revenue overall and possibly reducing the cost of sale, in order to justify the investment in digital transformation.
Driver 4: I want to change the way that I sell/make/deliver/service my product
Digital transformation offers significant opportunities to change the way you do business. You only have to consider the impact of 3D printing, the Internet of things and broadband networks to see the possibilities, to name only three transformative technologies. Compelling though these technologies may be, as a business owner you still need to answer the question “Do they make business sense for me?” and this will involve looking across the company at your processes to see how they can be transformed by technology. In many ways the business case for this type of change is more difficult to assess because the changes are typically more far reaching.
Driver 5: I want to diversify my business
Going a step beyond new products or services, the opportunity for a more extensive diversification of your business may present itself. This can be very exciting. Starting with a clean slate in a new line of business, possibly based on leading edge technology, may enable you to leapfrog the competition and establish a significant competitive advantage – just think how Apple changed the rules of the music industry with the introduction of the iPod and iPhone. Your business case will need a dose of the Steve Jobs crystal ball and will undoubtedly attract controversy, but it will be no less important than with other drivers, in keeping you focused on the end goal.
Driver 6: I want to fundamentally change the nature of my business
This is the driver that exposes you to the most risk and yet circumstances may leave you with few other choices, if the issue of your very survival is at stake. The business case will likely need to be truly visionary to justify the investment in this case, (imagine someone at Blockbuster writing the business case in 1995 for transforming the company into a Netflix-like operation) and will probably have many rewrites as the picture of the new business unfolds. It will be even more important that the business case provides the answer to “why are we doing this?” to keep the transformation team on track.
Whatever drivers for digital transformation make sense for your business, thinking through the business case will help to find the right focus and keep the reasons that you are embarking on this course front of mind for everyone involved – and give you a much greater chance of success.