It's Time To Become A Digital Corporation
Are you a digital corporation? Do you know how much money you are investing in digital technologies - social, mobile, cloud and big data - versus traditional assets - real estate and financial assets. Finally, do you have an inventory of your intangible assets (human knowledge, customer lists and big data derived from social interactions), and not just your tangible assets (buildings, equipment, etc)?If the answer is yes - then you are in good shape and probably already think of yourself as a digital corporation with a clear understanding of today's technologies and the economic value they create and enable. If the answer is no - then you are are probably a traditional business that has not yet crossed the digital chasm to success. And you would not be alone.
Today, less than 70% of CEO's use social media and 93% of boards do not receive information - big data - that is derived from today's technologies. Further, very few leaders understand the value that social and mobile technologies create and as such continue to avoid in investing in people, processes and technologies that either hamper value or worse, destroy it.
But its clear, today's digital enterprises are eating the world - including the companies, industries and products and services produced by more traditional organizations. If you don't want to be eaten by Digital Corporations, its time to rebalance your company's investments. How do you do that you are wondering. Simply, follow four steps below:
- CALCULATE: Identify the investments that are most likely to create new sources of value - e.g. social technologies that enable on-line communities that can share their experiences, provide your feedback and crowdsource your next product or service;
- ANALYZE: Select those investments that enhance what you are doing already -e.g. big data and analytics capabilities - and those that are creating undue risks - so you can better understand what your customers and employees are saying and their interactions;
- REBALANCE: Target investments that are marginal (on-premise technologies) and think about how you can shift capital away from them to more efficient technologies - e.g. SAAS solutions such as Salesforce.com; and
- ELIMINATE: Agree on investments that although have long created value for your company, like RIM's operating system and Best Buy's Big Box Stores, and either eliminate them or at least pare them back, even though they may have been the core of your past successes. Remember, old dogs die hard.
When used correctly, investments should create value and mitigate risks. In addition, great investors know when to BUY, HOLD and SELL. The same is true for the captains of America - your fellow leaders.
The bottom line: Every organization needs to think like and investor AND recognize that they need to reorient their strategy, operations (including people, processes and enabling technologies) and finance towards becoming a digital corporation. That requires capital reallocation! Like seeing China as the leading growth engine of the world, its also now time to see that the same is true is for digital.
So reallocate your capital and prosper as a digital corporation.