How enterprises can embrace the converging trends leading to digitalization
Nathan Anderson, partner at Bain & Company, spoke about ways to leverage digitalization to reach an enterprise’s full potential in a session titled The Digital Disruption of Operations at Bosch Connected World 2016 in Chicago.
Anderson addressed three topics that are essential to bringing a company into a digital future:
- Megatrends (key trends driving digital disruption)
- Market observations
- Charting a course for the digital future
Anderson also listed four trends that have been around for a long time, but are hitting their inflection point in accelerating a digital future:
- Internet of things
- Big data
- Computing power
- Improved hardware
The merging of these four trends is what is creating a set of tools to change the way companies operate, according to Anderson. Some of these tools that are disrupting digital include end-to-end supply chain, autonomous machines, artificial intelligence, digital engineering, additive manufacturing, mobile apps, flexible fulfillment, omni-channel and wearables.
Digital connectivity is changing the rules of the game, forcing business boundaries to be redrawn, the creation of new competition models, changes in the source of competitive advantage and shifting profit pools.
A few of the key questions clients should be asking are:
- How do best in class companies approach digital?
- Where should I be investing?
- How do I get started?
“Best in class companies” do four key things well, according to Anderson.
- Maintain focus on core value proposition
- Set digital point on horizon
- What am I trying to get out of digital? For example, I want all of my factories to be lights out in ten years.
- Implement a repeatable process for digital innovation
- Embed an operating model that reinforces the digital strategy
Companies are investing in digital for one of three reasons, Anderson said.
- Operational efficiency
- New products and services
- Improve the customer experience
Anderson said a company must know its competitive capabilities that will differentiate it from other companies, and that the number one failure he sees is a shotgun approach to digital. This means investing a ton of money in digital, but doing it randomly simply for the reason of thinking it must be done.
According to the Bain & Company partner, companies that are going to digital will need a few essentials before they are successful:
- Pipeline of opportunites
- Rigorous upfront evaluation
- Digital roadmap with a diverse set of bets
- Agile approach for working through digital roadmap
“Digital creates anxiety,” Anderson said at Bosch Connected World. “Most companies simply do nothing, and take a wait and see approach. Those are the companies that are going to get disrupted. You must take the first step, dip your toe into digital.”
Anderson finished the panel by listing his eight laws for going digital:
- Set a clear point on the horizon
- Watch what’s going on around you
- Don’t build a digital vacuum
- Tap into a network of trusted experts
- Start small but think big
- Be nimple
- The laws of business still apply
- Don’t lose focus on your core