What is a Digital Enterprise? (Part One)

digital_business_building.pngJust like any trending business topic, the concept of digitalization is starting to get murky. As a new theory takes hold and gains popularity, more and more people tend to start weighing in and providing their own nuances and approaches. In this three part blog series, we will address three important topics.

What a Digital Enterprise is NOT

Before we attempt to define the Digital Enterprise, maybe it would be easiest to start with what a Digital Enterprise is NOT:

  • An ecommerce company – Of course the enterprise likely has an ecommerce component, but the term “digital” is not synonymous with “online” in this sense.
  • A marketing term – If you Google “digital strategy” you will likely get a lot of results that relate to a company’s online marketing strategy. We are talking about a much bigger picture.
  • An IT endeavor – The second you say “digitalization” many people start thinking computers and technology, which leads them to believe that this is purely an IT concern. While IT needs to be involved, it is certainly not an IT-owned strategy.

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What do we mean by digital business or digital enterprise?

Let’s consider a definition from Gartner Inc, which states “[Digital Business] is about revenue, value, markets and customers. It is outward-focused. It is a metaphorical combination of front office, top line and downstage compared with back office, bottom line and backstage.”

Here’s a different definition from TechTarget Search CIO: “A digital enterprise is an organization that uses technology as a competitive advantage in its internal and external operations.”

Although the two definitions are on opposite ends of the spectrum in terms of simplicity, they both have the same heart. A digital enterprise or digital business is an organization that leverages technology to solve business problems like: internal collaboration, process optimization and customer engagement in an effort to increase their competitive advantage and profitability. Take Uber for example. Uber was able to leverage social media and smart phone technology to disrupt the taxi industry. They are now nearing $2 billion in annual revenue. I think it is safe to say that they have used technology to better understand and respond to customers, giving them significant competitive advantage in the personal transportation industry.

Now that you have a better understanding of the terminology, let’s discuss what telltale signs can be used to determine if an organization has succeeded in a digital transformation.

Read Part Two: 5 Ways to Tell if You Are in a Digital Enterprise
Read Part Three: Real Life Examples of Digital Transformation (coming soon!)

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