​Business or digital? Which strategy comes first for Kiwi businesses?

“There’s no point racing to create a digital strategy when your business strategy isn’t right."

Technology is playing an ever-expanding role in how businesses operate, and is increasingly underpinning their ability to be competitive in a rapidly evolving industry landscape.

To keep pace, many businesses are implementing a digital strategy. However, a sound business strategy is needed first.

By the end of 2017, 60 percent of New Zealand enterprises will have digital transformation at the centre of corporate strategy planning, according to research analyst IDC.

However, without first investing time and resources into developing a business strategy that calls for such a focus on digital transformation, it may be difficult for organisations to measure the value of their digital investment.

“There’s no point racing to create a digital strategy when your business strategy isn’t right,” says James Valentine, CTO, Fronde.

“In most cases, the digital strategy needs to flow from the business strategy, rather than the other way around.

“For example, companies can’t just copy what others are doing. Just because your competitors have a mobile app does not mandate you have one.

“You only invest in building an app if it delivers business and customer benefits. This example highlights the need for a seamless flow from business strategy to digital strategy, and a reminder that the foundations for such strategies have to be right before implementation.”

While IT infrastructure plays a central role for most businesses, Valentine believes organisations should focus on digital initiatives only as a key strategic action to fulfil an existing business strategy.

For this approach to be successful, it is also essential that businesses follow through with the internal consensus and alignment to make such a change happen.

“If companies don’t do this, other organisations may take over the market by using technology to power ahead,” Valentine adds.

“The Internet of Things is an interesting example. The technology is very exciting and offers incredible potential.

“But it still needs to benefit the business if it is included in an organisation’s digital strategy. There needs to be a reason to incorporate such technology. If there isn’t, it may not be worth the investment.”

While there is an ongoing need for organisations to embark on digital transformations, so they can survive in the modern market, Valentine believes it is important that they first know where they want to go as a business, and how they want to achieve that goal.

IDC predicts that by 2018, 35 percent of IT resources will be spent to support the creation of new digital revenue streams.

But regardless of what innovative technology organisations may end up implementing, such as cloud, mobility, or the Internet of things, Valentine believes it should first be identified as the best solution to an existing problem.

“Business strategy leads to digital strategy, it can’t sit in isolation,” he adds.

“This isn’t just about technology, it’s about organisational change that will let the businesses become more agile culturally and technologically.”

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