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Your digital strategy is so 19th century

From the Fusion CEO-CIO Symposium, Searchlight looks at what dooms a digital strategy. Plus, Apple calls shotgun, Facebook wants drones and more.

MADISON, Wis. -- So your business is finally diving into digital. Congratulations! You're doing it wrong.

Karen GoulartKaren Goulart

Even if you're doing really cool things.

Even if customers seem to like those things.

If your digital strategy is based on traditional business models, you're toast.

Don't shoot the messenger; the bearer of bad news here is Mark McDonald. Formerly of Gartner and now a consultant with Accenture, McDonald was one of the keynote speakers at this week's Fusion CEO-CIO Symposium, where the theme was all things digital disruption.

Too many companies, McDonald said, have digital strategies based on industrial management strategies honed in the 1890s (that's not a typo). You can't have a successful digital initiative if you're essentially functioning within a 19th-century industrial model.

And, McDonald said, too many companies are. Beneath all the bells and whistles -- beeps and buzzes? -- of slick mobile apps, the old way of doing business prevails. And fails. A great example of this is mobile banking. The apps work well, they're convenient and easy to use, and people seem to like them. So what's the problem?

The problem is, mobile banking has been a success in every way except in realizing the business case, McDonald said. The business case for mobile banking, according to McDonald, is based on a premise that, in today's world, isn't borne out. The premise is that when customers use mobile banking, those transactions are moving from one channel (brick-and-mortar bank buildings) to a lower-cost channel (digital). As that happens, the higher-cost channel can be eliminated. It's a precept well grounded in industrial management strategy. And it no longer works. Because despite being well-received, the success of mobile banking tends to be distributed across bank branches, meaning that the higher-cost channel -- physical bank buildings -- can't be eliminated.

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And it's not just mobile banking. A good many other digital initiatives are making the same 19th-century mistake. So what does McDonald suggest businesses do to get digital right? It starts and ends not with the apps or the gadgets on which those apps are found, but with where their customers want to be.

A deeper dive into McDonald's talk, plus additional conference coverage -- including how to forge a successful CEO-CIO relationship to better the business -- will be coming soon to SearchCIO. Until then, whet your appetite with this week's disruption-focused lead Searchlight item.

  • An original digital-age disruptor strikes again as Apple CarPlay zooms to the forefront of the connected vehicle experience.
  • Target CIO Beth Jacob's resignation just might be a good thing for other CIOs. No offense, Ms. Jacob.
  • Netflix-style recommendation-engine software that can triple the efficiency of cloud computing systems? That sounds better than binge-watching House of Cards (almost).
  • Everything you hate about buying printer ink will now inconvenience your morning routine. Why Keurig's coming digital rights management-enabled coffeemakers aren't good for anyone, including Keurig.
  • Staples is closing 225 stores and focusing on online sales. No more impulse-buying candy bars and cool pens with your printer paper.
  • Facebook. Drones. Discuss.

Let us know what you think about the story; email Karen Goulart, senior features writer.

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Is your digital strategy 21st-century ready?
This is an intriguing point. The banking analogy makes a lot of sense. If we were truly seeing a  change in the way that mobile banking and bank management were being performed, it would stand to reason that physical branches would be closing, or changing in some fundamental way, and that is not the case. Also, it would seem that with less overheard (technically speaking) the barriers to lending money and being able to do so at lower rates would be removed, but that is also not what is happening.