Business as we know it is changing. The next generation of market-leading organisations is already digitising their enterprise model with new capabilities enabled by social and digital technologies. For example USAA, a leading banking and insurance company in the USA, leads in Forrester’s Customer Experience Index in part through the adoption of an enterprise-wide customer experience focus leveraging digital technologies.

But many of today's social and mobile technology initiatives fall well short of their transformational potential. To avoid this trap, smart business and technology leaders are rethinking business strategy to create a "digital business strategy" — moving beyond linear, process-driven organisations to create new, dynamic, networked businesses which focus on improving the customer experience.

These new digital businesses have the ability to leverage digital technologies to transform the customer value equation and drive competitive advantage. They are capable of empowering and connecting people in new ways to create value in the marketplace. Digital businesses change the competition and set new standards for how companies, governments, and nonprofits deliver value.

Social and mobile technologies are now part of mainstream business. Mobile access to information is ubiquitous. Efficiently connecting employees around the office and around the world is quickly becoming table stakes for effective business. Leading-edge companies are demonstrating the business impact of harnessing effective collaboration — and they're changing the competitive landscape. At the same time, consumers have unprecedented influence over businesses and governments. Consider the Arab Spring and the role of collaborative communications to topple governments, or the ability of unhappy customers to use social media to cause Netflix to reverse its business strategy —to survive, your business must learn to harness the power of digital technologies.

CIOs have a critical role in providing technology and planning leadership for digital business strategy. Many CIOs are already supporting mobile and collaboration initiatives, and a few have even taken on the evangelism of customer engagement by creating digital business teams. But too few are partnering with the chief marketing officer (CMO) on customer-facing initiatives. Too often CIOs and IT teams are not working in partnership with groups implementing mobile and social technologies across the organisation, resulting in islands of digital technologies. And while all social and mobile initiatives seek to tap into the power of digital technologies to transform the enterprise, very few will achieve their full potential without enterprise-wide leadership.

Today’s CIOs have a unique opportunity to help create a unified digital business strategy by coordinating the social and mobile initiatives in their organisations. A unified plan is essential because isolated digital initiatives in the organisation result in lost opportunities through untapped data, the inability to scale to support the business needs, and sub-optimal customer experiences. Not having a unified digital strategy can also lead to failure to comply with regulations, increased risk of a security breach, and increased costs to the organization.

To avoid islands of digital technology, CIOs need to rethink the enterprise as a digital ecosystem. In this ecosystem, you design all the elements of social, collaboration and mobile to be part of an interconnected network of systems of engagement.

 Design your social ecosystem to create systems of engagement

Design Your Social Ecosystem To Create Systems Of Engagement

Focus digital business strategy on improving customer experience

Building a digital ecosystem means designing open, collaborative organisations where information flows freely and competitive advantage is built through the clever use of internal and external social data and mobile apps, all aimed at improving the customer experience. Unless your leadership team is able to step back and see the big picture, it’s unlikely your social and mobile initiatives will achieve their full potential.

Digital businesses use consumer technologies to help customers and employees accomplish tasks on digital platforms like iPads and iPhones which ultimately improve the customer experience. But CIOs must not focus solely on technologies which promise openness. You also need to consider what digital capabilities employees need to do their jobs. At a high level, a well-designed digital business allows employees to work productively, act resourcefully to solve problems, creating positive customer outcomes. A strong digital business strategy helps CIOs and IT leaders design and create the right technology architecture to support a successful mobile and social experience for customers and employees.

While the business benefits of digital strategy are becoming clearer with each passing month, achieving it is more complex than simply rolling out a set of technologies. Effective digital business strategy fundamentally requires changes in business processes, corporate culture, and the structure of the IT and marketing organisations. Ultimately we will see many more Chief Customer Experience Officers and Chief Digital Officers in the executive suite. It’s up to the CIO to decide if the technology organisation will lead the way or just keep the lights on.

 About the author: 

Nigel Fenwick is a Vice President and Principal Analyst Serving CIOs at Forrester Research.