Books Reviews on Digital

Book Title: Driving Digital Strategy:A Guide to Reimagining Your Business

Author: Sunil Gupta

Publisher: Harvard Business Review Press (Boston, MA)

First Published: 2018

Review Snapshot

Digital technologies are increasingly becoming ubiquitous. On the one hand, they have enabled the emergence of many new and exciting business models and allowed the creation of many new Fortune-500 or Unicorn companies. On the other hand, business models based on these technologies have had disruptive impacts on many established industries and business models and threatened the very survival of many conventional businesses and organizations.

There are many books available on how native-digital enterprises such as Google, Facebook, Amazon, etc. have achieved phenomenal growth and success. However, there are not many high-quality books available that explain how to design and implement digital strategies and digital transformation for conventional enterprises. “Driving Digital Strategy: A Drive to Reimagining Your Business,” (HBS Press 2018), written by Prof. Sunil Gupta, a prominent professor of Harvard Business School, easily qualifies among those few books that guide management practitioners how to effectively respond to threats posed by digitally enabled business models, and/or take up new opportunities by introducing digitalization to their organizations’ conventional business models.

The book provides a very simple and intuitive, yet a very logical and comprehensive framework for creating digital leadership. There are for components in the framework:

1. Reimagining your business
2. Reevaluate your value chain
3. Reconnecting with customers
4. Rebuilding your organization

The rest of the book is divided logically into these four sections. The first section, reimagining your business, deals with broadening the business scope (“What business are we in?”) and redefining the business model (“How do we create and capture value?”). Prof. Gupta argues that unlike conventional businesses that define their business scope based on products and markets, digital businesses are able to rapidly broaden their scope around the customers they serve, and may successfully operate in seemingly unrelated industries. This is possible due to

• access to fine-grained customer data and insights derived from the data,
• ability to use and manage technology, and
• creation of competitive advantage through complementary offerings and network effect.

Prof. Gupta then discusses how digital technologies may allow conventional organizations to create and capture value in new ways, such as:

• subscription fees and other revenue models for digital content,
• creating new revenue streams from data and data analytics,
• effectively competing with digital businesses by focusing on customer experience,
• building asset-lite businesses,
• transiting from a product-based to a product-as-a-service based business model, and
• transiting from a product-based business model to a platform-based business model, which may benefit from a two-sided or multi-sided network effect.

The second section, reevaluate your value chain, discusses various functional aspects of digital transformation and various digital technologies involved in such transformation, such as follows:

• Adopting and managing open innovation processes, rather than getting constrained with organization-controlled R&D and innovation
• Enhancing operational excellence
  • Use of Industry 4.0 (or smart factory) digital technologies, including Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), increasing automation through robots, enabling machine-to-machine communication
  • Enabling remote monitoring and predictive maintenance of plants and products using sensors and data analytics
  • Use of additive manufacturing (3D-printing)
  • Use of augmented and virtual reality
  • Digitizing the supply chain: Use of RFID, data from other sensors, real-time information capturing and data analytics, to ensure effective and efficient warehousing, inventory management, logistics, and delivery/fulfillment.
• Adoption and management of omnichannel strategy: Distribution through digital and physical channels

The third section, reconnect with your customers, discusses how digital technologies allow organizations to adopt a different approach of acquiring and engaging customers. Prof. Gupta discusses many important aspects of digital marketing such as follows:

• To effectively and efficiently acquire customers by capturing data on, four Moments of Truth, i.e.,
  • customers searching, evaluating, and deciding to purchase a brand,
  • actual purchase,
  • consumption, and
  • customers advocating brands to others.
• Improving customer acquisition and engagement by designing marketing programs with an objective to win micro-moments of customer purchase decision making
• Individualized targeting of online advertisements and promotion deals, which is made possible due to micro-level customer data available through websites, apps, and sensors, as well as data analytics
• Using social media and virality
• Customer life time value versus cost of customer acquisition
• Improving customer connect and customer engagement using digital technologies
• Online-offline interaction
• Effectively allocating a marketing budget
• A few topics of recent research on digital marketing, such as attribution and dynamics

The fourth section, rebuild your organization, focuses on the challenges involved in managing the process of digital transformation:

• creating vision and roadmap for change,
• managing performance, external stakeholders, and internal operations during the difficult transition period,
• managing the pace of transition,
• designing an organization for innovation,
• developing and acquiring new skills for key requirements of digital transformation such as data management, data analytics, machine learning, and artificial intelligence, and
• effective talent management processes.

The book covers the entire breadth of the digital transformation landscape. It provides a practical framework for digital leadership that aims to enable the strengthening of the core while building for the future. Prof. Gupta provides many useful examples on digital strategy making and digital transformation, many of which are based on Harvard Business School cases co-authored by the author himself. The examples include native-digital enterprises, as well as conventional enterprises that have undergone digital transformation. The book follows a very logical structure, and the language and writing style is lucid and quite accessible to management practitioners.

However, in my opinion, there are two key digital technologies whose roles in digital transformation could have been covered more strongly in the book. I believe that the book treats machine learning, deep learning, artificial intelligence, and blockchain technology in a relatively peripheral manner. However, increasingly these technologies have started playing central roles in different types of digital transformation. Machine learning, deep learning, and artificial intelligence, along with big data and data analytics, are at the core of digital strategy making and digital transformation. The blockchain technology too is at the core of crypto- currency and has started playing an important role in digital supply chains and business process improvements.

Notwithstanding this minor weakness, management practitioners can use this book as a launch-pad for choosing to dive deep into specific areas of digital strategy making and digital transformation relevant to them. The book may be a very important resource for the following type of audiences:

• CXOs and members of top management teams, who aim to devise new digital strategies and manage digital transformation of their organizations for effectively responding to digital threats or taking up new digital opportunities
• Consultants and change agents engaged in digital strategy making, and associated organization design and change management
• Academicians and corporate trainers, looking for practical and easy-to-use resource material for designing and conducting courses and corporate training programs on digital strategy and digital transformation