For the past two years, I’ve conducted a half dozen or so major research projects on digital business. At the outset, I looked for a definition that we could present to participating executives that would ground the research in something tangible. There wasn’t much out there. Even MIT's Center for Digital Business hadn’t pinned this down. So we created our own definition as “the transformation of business models, products and/or operations from the use of information and communications technologies.”
OK, but wow, that was vague — transformation from what - and to what? Do a search today, and you'll find a lot more of the same.
Having completed all this research — survey results from thousands of business leaders around the world and interviews with close to a hundred executives, analysts and academics, my thinking has shifted. Today I define digital business as “the ability to exploit information at speed.” Certainly this is enabled by information and communications technologies, but it’s all about the information — it doesn't matter which part of the “SMAC stack” (social, mobile, anlytics, cloud) you're talking about.
Let's break it down. First, the word “exploit” is important. The capabilities alone don’t add up to much if they’re not channeled to deliver real business value (new revenue, greater efficiency, growth in customers or markets, repeat business, etc.).
Second, it’s about information. Digital businesses are creating new business models, understanding and engaging with customers in new ways, launching new kinds of products and improving operations by exploiting information. This includes information contained in companies’ own systems but analyzed in new ways as well as the “Big Data” that is available from an ever expanding universe of sources. It is information gleaned from web analytics, government and commercial sources, and sensors in physical equipment. The information is everywhere, but most companies are still in the early days of understanding how to exploit it.
Finally, digital business is real-time business. Being able to acquire, analyze and act on information won’t get you far if your customers have to wait. The leaders move fast. They’ve made it a priority to design their organizations and technology environments for speed.
Do definitions matter? I think so. They help focus our attention and our efforts. As Ade McCormack wrote recently, a “lack of common understanding as to what digital means is resulting in thousands of meetings taking place daily, where nobody in the room shares the same definition. Possibly it is this confusion that is causing the greatest market disruption?” I don’t know about that, but I guarantee it's slowing things down.
My definition of digital is based on what I’ve observed first-hand in organizations around the world — what they're trying to accomplish, how they’re approaching it, what their experience is. Of course, your definition may be different from mine — and that's fine — as long as you and your fellow business leaders have one!
Has your organization agreed on a definition of digital? If so, I’d love to hear it! How do you define digital business?