• Digital Company or Company Using Digital Technology?
Article:

Digital Company or Company Using Digital Technology?

21 August 2019

With the advent of social media, the use of applications to support and/or examine salespeople or manufacturing processes that use multiple digital applications, automation or internet connections does not make a company a digital company. It only makes the company using digital technology.

Being a digital company is more than just having the right technology. To get there, it requires a change and transformation of organisational architecture.

To be a digital company, there are three conditions which should be met:

- Dare to deconstruct the overall strategy of the company, and based on this, explore the potential for the introduction of new business models to uncover various ways to achieve value propositions.

- Empowering connectivity and interaction with customers to bring a value proposition to a better market.

- Continuing use of analytical data technology and translating the results into insight or input further informing new ways to operate internally in optimisation terminology and in the broader business ecosystem, to innovate in creating and delivering new products and services.

For most companies, viewing through this perspective is fundamentally different from the way they currently think and work. However, as I have mentioned, the right step for your company - for now - perhaps being a company that uses digital technology is more than enough. A company doesn’t have to aspire to become a digital company.

To turn to the continuum from digital laggard to digital company, the leadership team must be ready to recycle and change their perspective toward digital. For example, company that applies the use of digital technology to be more efficient or to increase sales figures, utilise digital technology as a tool to achieve goals, rather than opportunities to be innovative, reinvent ways of working and provide future perspectives to employees.

Digital companies are companies that use technology as a competitive advantage - to create value. Therefore, digital must be perceived as a mind-set, a new way of doing business. Thus, a strong commitment to using digital and connectivity for innovation with the aim of improving customer experience and building an effective and efficient company, digital transformation must be carried out.

By setting a clear vision of being a digital company and - on this basis - they must re-examine how companies do things and understand where business value can be generated, this allows leaders to imagine if the current business model need to be changed or they need to create a completely new model for success in the digital economy. Thus, companies must move from having one strategy to managing several different strategies.

Previous research showed that most companies only utilise 30-40% of the full potential of the technology they possess and - even worse - only utilise 10-15% of their employees' abilities. Digital, connectivity and leadership must be able to create a strong learning environment as the key to unlocking other keys so that each can use the potential of up to 70-80% and even 85-90%. To make this happen, vision, leadership and organisational culture are the most important "enablers". Organisational culture is a fundamental and very basic thing to allow change from the beginning. Cultural change really needs brave leadership that creates trust. And don't forget: Digitalisation does only encourage change, but also the transformation of all people within the company.

Thus, whether you want to transform your company to be a Digital Company or a company that uses Digital, it depends on the initial purpose why the company was established.

Written by Heru Wiryanto - BDO Senior Technical Advisor

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