Cisco UK & Ireland Blog

Digitisation is NOT a strategy

November 19, 2015

A customer insightfully pointed out to me a couple of months ago that Digitisation is not their strategy. Their strategy in this instance was customer centricity. As more and more companies are being challenged to move from once-successful product-centric mind-sets, into more service-oriented strategies, Digitalisation is the enabler to deliver that strategy. Simply creating a good product is no longer enough. An increasingly critical question for both producers and users is what happens after the product is sold? As Joseph Jimenez. the CEO of Novartis explained during a fascinating McKinsey Insight*, Novartis are moving from simply selling a pill, to delivering a positive patient outcome, where the pill is only one piece of their offering.

When successful, the results are new and the revenue streams are significant, with increased customer engagement and delight (not just satisfaction), greater efficiency and cost savings, and critical value-added offerings. The companies that successfully leverage services are using them to drive disruptive new business models that, in effect, enable them to charge to business outcomes — for performance rather than physical assets.

We are now seeing well established customers building Disruption Teams, recruiting externally from already disrupted companies such as Netflix and Amazon, and empowering them with a culture that encourages experimentation and tolerates failure that is central to fast execution. This approach of course has its challenges as one side of the fence focus on speed and the permission to fail, whilst the other side live by governance and policy. But the results speak for themselves.

Technology is defining businesses and meaning that each and every CIO is needed on the board of your organisation to lead them through this new technology era.

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