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Digital transformation

How digital investments can create strategic value for organisations: Part 1

Sanjay Sachdev

The reluctance is understandable. Your business has showed good signs of health for years (or decades), in large part because you’ve concentrated on creating value in the field you know best. Within a short span of time, you’ve begun to hear plenty of talk about the need for businesses to transform themselves for entry into the digital world.

To be sure, companies like Amazon and Facebook are making a fortune in this new realm, but it’s hard to see how their success relates to your business. You produce real-world products and services, which don’t seem to be a natural fit for the fast and furious ecosystem of online commerce. Do you really need to radically alter the business plan of your company, just to adapt it to the new world of business online?


Digital transformation may offer no guarantee of success, but stagnating in a changing world is a blueprint for failure. Newspaper and book publishers have either moved into online space, or been left behind by a society that did. Car manufacturers are discovering that they can evolve into the world of electric vehicles with cameras, sensors and autopilot features, or be out-competed by companies that do.

Eleven short years ago, Nokia was the king of mobile phone companies, and sitting on its laurels was the cause of its downfall. Hotels are losing to AirBnB, taxis are falling to Uber, brick-and-mortar stores are closing due to Amazon. These are all real-world products and industries that didn’t seem to be a natural fit for the online world either, and they’ve been upended in the blink of an eye.

The real question isn’t about whether to adapt. It’s about how. An effectively managed move into online space can result in a genuine reversal of fortune for your company, putting you at the forefront of your industry and making you the envy of your competitors. But everything depends on how well you understand the potential for improvement, and how committed you are to achieving it.

What Successful Adaptation Looks Like

Consider the world of retailing before society moved online. Every time a new customer walked in the door, they would be a complete stranger. You wouldn’t know what they were looking for, and they didn’t know the layout of your shop or warehouse. The customer would need to drive from one store to another, sitting in traffic and looking for a parking space on the blind chance that they would find a better deal with your competitor.

With the integrated customer profiling information that online shopping allows, your system can receive an instant report on the personal background and interests of any visitor who clicks through to your website. You’ll know which ad they used to find you, and the types of products they tend to buy. Your entire catalog will be easily searchable and at their fingertips, with an artificial intelligence algorithm carefully highlighting suggested purchases based on each customer’s data profile.

Indeed, a well-designed, fully-functioning digital interface offers a level of convenience that can feel almost magical for both customer and seller alike. But behind that magic there must be a solid plan for creating it. An effective online presence means far more than just adding video to your website, or setting up a Facebook account for your business. It requires a complete re-think of the relationship you have with your customers. Realising the true possibilities of the digital realm involves – from the very beginning – strategy.

In Part 2 of this article, we will break down the necessary components of successful digitisation.

To read "How Digital Investments Can Create Strategic Value for Organisations: Part 2", click here.