As with the human body, a strong core is a prerequisite for the digital enterprise, the underlying foundation from which the rest of the operation can blossom and thrive.
It’s a realization that has spawned the use and evolution of increasingly sophisticated central digital platforms which sit at heart of an operation and act as a digital nerve center. Highly scalable and intuitive, they can morph and expand with minimal intervention to drive developments and innovation, be it in the cloud, on-premise or at the network edge. This enables businesses to respond quickly to opportunities and diversify their service offering, indeed in some cases, entirely remodel their operations as they move into new industries.
This fluidity that has changed the game in terms of expectations around the scope of a business’ potential, has shifted the long-established business strategy which focused on activity optimization and consolidation, to one that is all about continuous adaption and innovation.
Underpinned by an ever-evolving IT system and the ability to leverage specific digital capabilities, it’s a traction which has coined the concept of the digital business extension. Recent history is littered with some big-name examples, such as Amazon, Google, and Apple. These players began with a very specific offering and diversified into many new areas as their digital capabilities grew and they identified new avenues in which to capitalize. Think how Google technology now powers everything from day couriers, driverless cars, and robo-taxis, while Apple’s journey from a computer company to becoming an all-encompassing consumer brand is now complete.Beyond expanding their respective portfolios, there have been far wider implications with the approach proving to be transformative in terms of how shoppers consume services.
Asian online shopping titan Alibaba is another case point, extending the role of e-commerce from being simply another sales platform to becoming part of a much wider media ecosystem. An ecosystem able to connect retailers to digital media outlets to build their brand through multi-channel advertising and marketing campaigns.
Such an open ecosystem that enables businesses to deliver services on demand is a common denominator behind the traction, but beyond this, there are many more elements to address. Extending the digital business demands significant strategic and structural change to a business. Most notably, the traditional state of play that saw IT heavily siloed from the rest of the organization and acting as the infrastructure mechanism to implement and support a pre-determined business strategy is turned on its head. Now, it is the digital opportunity which informs business strategy and determines the scope of what can be done by unearthing previously unknown opportunities.
Creating digital business extensions demands a two-pronged attack. First is the need to establish a culture of continuous innovation in which every facet of the organization from marketing, manufacturing or logistics is primed to continually question whether there are additional opportunities to transform and add value. And second, the requirement to adopt technology that fosters change and rapid development, whether it be through integration, analytics or agile development.
While this can take various forms, central to success will be the tools that promote data democracy and encourage more of the organization to have both access to data insight and a role in decision-making through simple to read visual analytics and fast predictive capabilities. Indeed, the ability to leverage data insight in real-time becomes the kind of competitive differentiator which underpins an organization’s progression into entirely new territories with ease and minimal investment. Fundamentally, this leads to a better understanding of the customer, their digital behavior, and motivation. This insight is compounded by deploying a more agile and collaborative approach to application development. Adopting a DevOps mindset to enable developers to create, publish and consume APIs in line with business demands, while taking an automated approach that shortens and streamlines the development cycle, becomes intrinsic not only to faster deployment to market, but also to expand into entirely new territories.
A number of factors must conspire to digitally extend the business, but with the breadth of technology we can now have at our disposal, smart diversification need no longer be confined to just a few household names.