Building your digital social balance sheetBlog
In the 1950s a successful entrepreneur could build an organisation with an average lifespan of 67 years, generating value across three generations of workers, shareholders, and customers. Today, the average lifespan of an organisation is 15 years.
Consequently, entrepreneurs adopt a half generation ‘playbook for success’ – cycles are condensed, the business journey vastly changed. External resources are leveraged to augment balance sheet assets. Scale is achieved via business models that didn’t exist before global digital flows were made possible by social media, mobility, WiFi, and cloud computing.
In 2020, digitally indigenous ventures will dominate global stock indices. Within 10 years it’s predicted that 75% of today’s Standard & Poor’s 500 will be displaced by 21st century start-ups .
We’re experiencing the 4th industrial revolution
The age we now live in is often referred to as the 4th industrial revolution. We recognise a paradigm shift from industrial age models and rather call it the Digital Social Era.
The shift towards the Digital Social Era stems from convergent forces that are changing the fabric of 21st century life. For example:
- It’s the digital and social world – digital is not merely e-commerce, meaningful engagement is key to sustaining relationships, reputations, and revenues.
- Generational tipping point – millennials now represent the majority of consumers and workers, their values and ways of being are profoundly different.
- Business models – value chains are no longer static or linear, you’re either a platform-business driving an ecosystem or a player on someone else’s platform.
- Digital is ubiquitous – this democratisation of access and advancement in computational power is exponentially accelerating invention and innovation.
Are CEOs ready to deal with digital disruption?
Research by SAP confirms that 90% of CEOs believe the digital economy impacts their industry.
Yet only around 25% are confident that they have an effective strategy, and less than 15% are effectively resourced and executing a cohesive plan.
Essentially, while leaders accept the need to master the Digital Social Era, the majority struggle to architect their future purpose and fashion new value.
Dimension Data’s Digital Social Balance Sheet can help you deal with digital disruption
The Dimension Data Digital Social Balance Sheet provides a framework to guide strategy and execution. It calls out the seven top level strategic capabilities underpinning business value creation in the digital social era. We’ve evolved this through our work globally with our clients, large to medium enterprises across sectors including finance, services, industry, government, education, health and wellness, defence, and not-for-profit.
Across each strategic capability there are five levels of maturity, and this extends the balance sheet into the Dimension Data Digital Enterprise Capability Model, detailed in the Exponential Digital Social World.
The model is also adapted specifically for industries such as higher education, healthcare, aged care, government and financial services.
Using the Digital Balance Sheet and Dimension Data Digital Enterprise Capability Maturity Model
Organisations are using the digital balance sheet and seven pillars of the Digital Enterprise Capability Maturity Model to design, plan, and evaluate their transformation and innovation.
Stakeholders across the business can distinguish the inputs and outputs of their organisational challenges and opportunities and envisage logical, holistic progressions of change.
Here are some practical applications:
- Unpack the attributes of success and reshape strategy encompassing the seven pillars
- Assess current capabilities, understand the gaps to meet the future (figure 2)
- Benchmark – how do we compare to others?
- Construct a journey with capabilities in alignment
- Identify where innovation offers the most potential to accelerate/leapfrog
- Create digital balance sheet KPIs and reporting
The transformation journey
Every organisation now wants to avoid the traditional big bet, monolithic, and waterfall-style transformational approach. Such programmes wrongly assume that the external context is evolutionary and impacts can be controlled. Yet today’s business context is dynamic, the rate of change is exponential, and impacts are disruptive.
We recommend an approach that establishes a set of key strategic themes for business value creation, drawn onto the Digital Enterprise Capability Maturity Model. These themes, led by multi-functional theme teams, can deliver an across-the-board uplift in all capabilities, or, concentrate on certain capabilities.
A montage covering the full scope of required capabilities is created. Each theme comprises a complement of agile initiatives and the team also explores opportunities to accelerate their agenda through innovation experiments. As capabilities grow, they’re shared as common elements across themes, generating organisational consistency.
A case in point: Bubbles
Starting in 1980, ‘Bubbles’ (the fictional name of our case study example in the Exponential Digital Social World White Paper) went on a mission to become ‘leaders in advanced hair care products’.
They flourished, mastering manufacturing, supply chain and B2B channel management into hairdressing salons. However, over the past decade Bubbles’ market share and profitability declined, disrupted by digital business models, such as online marketplaces.
Bubbles reviewed their business strategy and decided to double down on their core strengths of product innovation and strong relationships with leading professional salons in target locations.
Bubbles flipped their mission statement from product to customer centricity, focusing on ‘personalised solutions for beautiful, healthy hair’. Their end-to-end transformation entails a shift from level 2 to level 5 across the Dimension Data Digital Enterprise Capability Maturity Model (Fig 2).
To fulfil this new mission, Bubbles’ strategy defined four themes powering value creation: digitally agile, deeply connected, exponential, and one team (Fig 3).
Connecting with stakeholders becomes a priority
A top priority was to become more deeply connected with their stakeholders. By deeply understanding their clients and end customers, Bubbles could help the salons succeed amid disruption in the retail hair and beauty sector.
The uplifted capabilities in data and information management and analytics were shared across other teams.
The team embraced digital innovation
As an innovation experiment, the team designed an exciting, exclusive in-salon experience using a virtual reality haircare app. This helped to differentiate the salon and the Bubbles brand.
The Digitally Agile team worked to digitally enable business operations on a cost-optimised and flexible set of technology infrastructures, based on consumptive service models. This aided faster time to value across the business.
From this foundation, the team created the B2B4C platform, comprising software as a service for salons. This enhanced business integration for product ordering and also provided salon booking systems, reporting, analytics, and digital marketing tools.
The Exponential team drew on the uplifted capabilities in data and analytics and digitisation to drive smarter, data-driven automations and evidence-based decision-making. They innovated ‘packages of digital business services’ to attract new high-value salons to the B2B4C platform under a services subscription model.
One Team focused on the flow of knowledge and ideas across the organisation and aiding people to work effectively in teams, whether virtual or colocated.
In particular, researchers across the globe were provided with shared platforms for research management, data management, AI, analytics and visualisation, enabling them to work in a vigorous collective.
Effectively used, the Digital Balance Sheet and Dimension Data Digital Enterprise Capability Maturity Model can help you structure and guide your transformation route.
For more detail on how your business can leverage the opportunities of digital disruption, download the executive summary and the white paper by clicking below.