Are You Ready fot the Digital Economy

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What Is the Digital Economy?
The digital economy, whether perceived as a trend or a revolutionary leap forward in business, is
motivating organizations worldwide to undergo digital transformation. Digital transformation
requires a complete examination of an organization's operations and target markets in order to
understand how to best leverage technology, whether to create new products or services, enable
new processes, reach new audiences or compete effectively against digital startups. Today's
blistering pace of technology innovation demands that organizations digitally transform in order to
cater to consumers more efficiently and collaborate with partners more effectively than ever before.
These are, simply stated, the requirements of the digital economy.
To outside observers, many participants in the digital economy, such as Uber, GrubHub or Etsy, look
like technology companies. Their websites are appealing and consumers and partners engage with
their products or services through compelling mobile applications. These brands may be perceived
as highly technical, but beyond the aesthetics, these companies are quite simply employing business
models that are intrinsically enabled and supported by technology where their competitors are not.
Internally, digital economy companies are obsessed with technology. They build business platforms
that enable them to win against competitors, known and anticipated. All business functions,
including technology, marketing and IT work together as one to innovate new offerings and execute
more efficiently. These companies are well informed and move quickly and decisively.
Is Your Business Ready for the
Digital Economy?

White Paper
In a recent study conducted by Capgemini Consulting
and MIT Sloan Management, 469 senior executives
1
from 391 large companies were interviewed. The
companies were classified as beginners, fashionistas,
conservatives or digirati depending on their degree of
digital innovation and enterprise commitment to
change. The study found that the most advanced
companies (digirati) outperformed all others in three
critical financial areas – revenue generation,
profitability and market valuation. For many in
executive management, these are three top key
performance indicators that drive all initiatives.
Is Your Business Ready for the Digital Economy?
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There are three fundamental drivers of the digital
economy. First, technology innovation is taking
place at a record pace. The Internet of Things,
connected cars, watches, and mobile payments are
a few of the developments offering opportunities for
businesses to create and deliver new products and
services to fuel growth. To garner attention in
today's noisy and crowded markets, innovation is
the name of the game.
The second is competitive pressure asserted by
digital disruptors. These companies are winning
customers by being more empathetic to their needs,
dominating markets by being more agile, and
creating stakeholder value through leaner
operations with lower cost structures. Digital
disruptors are executing on new and innovative
business models that are fueled by technology.
The third element is the customer: the millennial
generation. The digital-native generation is entering
peak purchasing years. Whether buying homes, cars
or retail products, millennials live on their mobile
phones and shop socially. They are the current and
future consumers.
Why Does It Matter?
1
Capgemini Consulting and MIT Center for Digital Business, The Digital Advantage:
How Digital Leaders Outperform Their Peers in Every Industry,
http://ebooks.capgemini-consulting.com/The-Digital-Advantage/index.html
“The internet is triggering a third
wave of capitalism that will
transform business and
government and lead to
extraordinary wealth creation.”
John Sviokla, Partner,
Strategy and Innovation Group, PwC
What Is Driving Digital Transformation?
Again, disruptors are not technology companies but
rather companies with innovative business models
that are enabled by technology. For example, Uber is
not just a taxi service--it is a company built on a
logistics platform that enables it to deliver
transportation or immunizations or other services to
consumers anywhere, anytime.
As an end result, the platform must support the
business strategy. This is the business strategy that
defines markets, articulates market acquisition
strategies, analyzes the competition, offers clear go
to market strategies, outlines operational
approaches and execution plans, defines financial
requirements and strategies, and assesses legal
issues. By its very nature, execution requires cross-
functional collaboration among product research
and development, human resources, operations,
sales, marketing, accounting and finance.
Technology plays a critical supporting role to all.
The resulting technology platform must deliver in
three critical areas – a compelling user experience
across a myriad of device types, data analytics to
enable critical business decision-making, and a
means for stakeholders and partners to engage with
the organization in a frictionless manner. The result
is a high performance, scalable and flexible platform
that supports the business from the inside out.
Building a Platform for Business Growth

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It's all in the execution. One of the challenges
that many companies face is how to reconcile
the different viewpoints and approaches that
each functional department has and the partners
they engage.
Marketing and sales most often engage marketing
and creative design agencies. The agencies speak
the language of business. They understand market
acquisition, brand and image, and revenue growth.
Agencies excel at conducting research, surveys, and
focus groups to design market acquisition
strategies. Like finance professionals who engage
consulting auditors, and IT professionals who
engage systems integrators, sales and marketing
teams engage agencies for support.
But the digital economy is changing everything and
creating challenges to this functional silo approach.
Where does the customer engagement strategy for
mobile devices end and technical development
begin? Today, there is no boundary between
marketing strategy, creative application and
technology development.
Unfortunately, many leading firms have learned this
lesson the hard way after sinking considerable time
and money into the rush to become 'mobile'. For
example, a company may engage an agency to
develop a mobile application for their service, only
to meet with the harsh reality that the design could
not be implemented. While aesthetically pleasing,
factors such as multi-aspect ratio, responsive design
or other requirements may not have been
considered because the technology group was not
involved from the start.
Another significant obstacle for companies hoping
to become digital economy leaders is the existence
of multiple, redundant systems that serve the same
function. Many organizations are coping with twelve
account opening systems, five order entry systems,
or eight different logistics and operations systems.
The best, agency-developed omni-channel strategy
in the industry that does not consider system
redundancy will certainly fail in execution.
Typically, the harsh reality is realized far too late.
Great strategies and designs are approved and
'tossed over the wall' to the technology side only to
be told “this cannot be done.” There has been no
collaboration. There is no anticipation of the
technical requirements up front, when it matters
most. The result is the traditional IT/business stand-
off. Both sides are frustrated. Promises have been
made to executive management. Time and money
have been expended. But there is gridlock.
Attempting to bridge the gap between the two with
multiple external solution partners is no easy feat.
Technology professionals will typically engage
consultants and systems integrators, well versed in
the myriad of IT systems with three letter acronyms
such as ERP, CRM, HCM, SCM, and SFA. These
solution providers can help decipher the labyrinth of
internal IT systems to help make sense of their
customer's environments.
But too often, business and IT speak different
languages and have different objectives and KPIs.
And if an advertising agency is also employed, its
team may view the technical solution provider as
rigid and inflexible, while the technology solution
provider may view the agency as undisciplined and
unstructured. Both skillsets are required to develop
the best outcome, yet the divisions run deep.
How Do You Build Your Business Platform?
The most successful participants in the digital
economy have created strong partnerships between
the CMO and the CTO/CIO. They work together as
a team, challenging one another's viewpoints.
“Here's an innovative new technology. Will that help
us develop that new product you want? What about
this user experience design, can we do that?” The
teams work together in tandem, all pulling in one
direction. They have learned a common language
and developed processes to accommodate all
issues.
Your partners should be able to do the same:
support multiple points of view that challenge each
other. The partner should possess one seamless
methodology that incorporates all aspects of the
business strategy to develop the best outcome. Both
the creative teams and technical teams should
conduct themselves as one company, able to answer
each other's questions, support each other's efforts,
or challenge each other in a creative manner.
On the creative side, the solution partner must
understand target market definitions, personas and
market acquisition strategies. On the technical side,
the partner must be able to address cross-device
compatibility and data analytics, building the right
API structures for all your ecosystem partners to
connect to and deliver with the quality rigor and
development expertise of an engineering firm. By
being able to leverage the broad skills necessary
from both sides of the house, an organization
increases its chances of building the right platform.
Getting to the Right Outcome

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About Ness Software Engineering Services (SES)
Ness Software Engineering Services (SES) is a premier provider of outsourced engineering services. Ness SES helps
organizations compete and grow in today's digital economy by providing deep expertise in products and platforms,
data and analytics, and experience engineering. With access to world-class software engineering resources, Ness
SES' clients create advanced, new products and services, enter new markets, win new customers, and streamline
operations to radically reduce costs. Ness SES delivers consumer-grade experiences with commercial-grade quality
and stability through its global delivery model that offers the flexibility and efficiencies of on-site, on-shore, near-
shore and off-shore sourcing, leveraging sophisticated distributed Agile techniques.
This is arguably one of the most innovative eras in
human history. Having recovered from the most
recent economic recession, businesses are
experiencing a booming market. This booming
market represents elements of the new normal. The
new normal is using technology as the driver of
growth. The new normal is unprecedented speed.
The new normal is global competition with highly
disruptive entrants.
Make sure that your partner understands and
supports growth, not just cost reduction. That's from
another era and for a different part of the
organization. This is the digital economy, and there
are no prisoners.
Summary

Are You Ready fot the Digital Economy

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