Why Can’t We Have More
Than One Digital Strategy?
A recent MIT Sloan Management Review article argued that companies need to decide
whether to focus their digital strategy on customer engagement or digitized solutions.
But several readers wondered why they have to choose one option over the other.
In “How to Develop a Great
Digital Strategy,” an article
published in the winter 2017
issue of MIT Sloan Management Review, authors Jeanne
W. Ross, Ina M. Sebastian,
and Cynthia M. Beath wrote
about the importance of
having a digital strategy that
helps guide executives as
they lead and monitor digital initiatives.
In their article, Ross, who is a principal
research scientist at the MIT Center for
Information Systems Research (CISR);
Sebastian, who is a research associate at
CISR; and Beath, who is a professor emerita
of information systems at the University of
Texas at Austin, argued that executives need
to make a clear decision: whether to pursue,
as they put it, “a customer engagement
strategy or a digitized solutions strategy.”
They advised that companies need to select
one of those two strategies.
But several readers questioned the no-
tion that executives need to choose one
focus or the other (as opposed to pursuing
multiple digital strategies in tandem). For
instance, Kaiser H. Naseem, the Dubai-
based head of banking and digital finance
advisory services at International Finance
Corp., wondered why cus-
tomer engagement and
digitized solutions strate-
gies couldn’t be combined.
In his industry, he argued,
it’s difficult to separate digital solutions from customer
engagement. “Without a
good digital solution,” he
wrote, “a financial institution may not be able to
create positive personalized experiences
that engender customer loyalty.”
In an email conversation, MIT Sloan Management Review raised Naseem’s question with
Ross, Sebastian, and Beath. They responded:
“Companies must choose one digital strategy,
either customer engagement or digitized so-
lutions. The goal of customer engagement is
to address customer needs and generate loy-
alty through a personalized experience. Like
all strategies, developing digital business
strategies involves making choices — both
what you will do and what you won’t do. If
a company doesn’t explicitly prioritize one
goal over another, it puts senior manage-
ment in the position of constantly weighing
the trade-offs whenever there are decisions
about resource allocation or organization
structure. If you don’t make your strategic
choice explicit, you will spend too much
time debating the priorities.
“Beyond the investment of time, not choosing hinders efforts to integrate a company’s
products and services. Invariably, the sales and
service people will operate in their own customer engagement silo, while the product people
will operate in their own digitized solutions silo.
Obviously, there will be communication across
the silos, but integration — as seen through the
eyes of a customer — will be elusive.
“Finally, when you choose one strategy
over the other, you will develop a technology
base designed to implement that strategy.
Customer engagement strategies often demand exceptional customer data; a digitized
solutions strategy, on the other hand, might
revolve around core systems targeting product life-cycle management or the sensors and
analytics built into solutions involving the
internet of things.”
— Reported by Bruce Posner
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