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The conversation around digital strategies has been going on for a while now. While many companies claim to have a digital strategy in place, is that really true? Somehow a digital strategy is still linked to having a new app, a website presence, or some eCommerce moves. Is this all there is?

The aim of such strategies seems to be to somehow attract new customers and perhaps to cut costs. Even legacy companies and traditional industries such as manufacturing are jumping on to the digital bandwagon. And, of course, this is necessary.

It is abundantly clear today that only those who can ride the digital wave will survive and thrive. The others will wither. Technology is really that crucial today.

However, in this rush, it’s easy to lose the real meaning of a digital strategy. And without meaning everything is hype…an exaggeration of nothing concrete.

Many organizations are merely checking the box here and there with digital projects. All have a website (unless of course, they live under a rock), many an eCommerce site, and some social media marketing channels in place. But these have been around for over a decade now. Surely, a decade is a long enough time for a strategy to be completely transformed business-wise, isn’t it?

The danger I feel is that we seem to confuse this bits-and-pieces approach to digital for a strategy. What is needed is a great deal more than that.

So how can you define a digital strategy? Distilling from all that I’ve seen and read, I would say a digital strategy is the application of various digital technologies to your organizations’ business models to create differentiated business capabilities, improve business performance, reimagine existing processes and/or create new products.

Obviously, such a strategy involves a heavy focus on technology to create capabilities to transform a business into a digital business.

Digital Strategy = Digital transformation and/or IT strategy, right?

Wrong! While there is a tendency to use these two terms interchangeably, they are distinct. The terms are related but differ vastly in scope.

Digital Transformation drives change in the areas of business models, customer experience and operational processes. It demands a culture shift.

Digital strategy focuses on technology and not on the culture. It involves identifying how technology implementations can support and improve business objectives and outcomes.

Now a digital strategy might be technology-dependent, it is not an IT strategy. IT strategy looks at transforming technology in isolation from the rest of the business. It involves identifying which technology to invest in given the current business direction. A digital strategy, on the other hand, will take into consideration the processes and activities that need transformation to enable better business outcomes and then sourcing the right technologies and identifying the right strategies to enable that transformation.

It might be hard, almost impossible, for business leaders to ignore the potential of technology today. Of always-on connectivity, of advanced analytics, of the cloud and IoT and other such technologies. However, diving headlong into a digital future without a strategic plan in place will be a recipe for disaster.

So, before you implement your half-baked digital strategy hoping it will deliver success, take a deep breath and ask yourself these questions:

1. How does digital technology change my business?

Here you need to evaluate how you can create a new business, expand your organization’s boundaries across the value chain or leverage existing assets to improve your business capabilities using technology. For manufacturing, for example, it could mean having a strong online presence and dramatically transforming the impact of the eCommerce store by improving product content. Or using technology to improve supplier onboarding and management or reducing the complexity that comes with managing complex product information.

2. Are these technologies helping you add value to your business?

This takes into consideration how technology can help you improve your business and increase market competitiveness. It involves assessing how digital technologies can improve the cost and quality of your offerings, improve capital planning, assist performance management or process management, improve the supplier chain management, inventory management, product information management, etc.

For example, B2B eCommerce companies might want to look at product analytics to identify their top-selling locations, determine empathy debt (the understanding of your users and how well, or not, they use your product), track the digital footprint of customers, serve them better, track product sales across the sales channels and also expand your market, etc.

3. Do these technology implementations impact your target customer?

Technology opens up a world of opportunities for business, quite literally. When developing a digital strategy, it is essential to determine if and how these technology implementations impact your target customer. It also helps to evaluate if these implementations impact the value proposition to your target audience. Lego did a fantastic job of leveraging digital technologies such as VR to allow kids to play online with their famous bricks. This helped them increase the demand for the physical Lego building blocks.

When it comes to B2B eCommerce, these technologies can help us understand the evolution of customer behavior and how it is likely to change in the future. You could do this by leveraging analytics to determine future demand and even shifts in buying behavior, etc.

4. How do digital technologies enhance your capabilities to provide competitive differentiation?

A digital strategy is not so much about having digital capabilities as it is about using digital to supercharge your existing capabilities. It is about using technology to create competitive differentiation. For example, if you might be an auto tools and parts company you might want to implement technology to expand your market reach and identify not only your potential customers but also potential distributor partners. You might want to employ technology for better inventory management or to make better merchandising decisions. You might use technology to improve your marketing initiatives by proactively identifying market trends and also upselling opportunities. You might want to use technology to improve your product information management and use product content to drive value.

The idea is to assess where you need help, why you need help, and then assess how technology implementation can help you.

Since all businesses are not cut out the same cloth, there cannot be a ‘one size fits all’ digital strategy template as well. Instead of falling into the trap of ‘what’s our digital strategy’, assess how you’ll answer these questions and you’ll be on the road to having a tailor-made digital strategy that will deliver you success.