Customer Reviews

How Digital Is Your Business?

5 star:		(9)
4 star:		(3)
3 star:		(3)
2 star:		(0)
1 star:		(1)

 

 

As the books about digital technologies continue to pile up, you may wonder which ones to read, if any. The authors readily acknowledge this in their introduction, but claim differentiation from their focus on strategy first and technology second.

They are smack on the money.

Almost all books today speak about how the "Internet changes everything," how there is "this technology" and "that technology" that can turn your company into a super power. What they don't consider is how your business model itself is affected. As a businessperson, it is the latter that I want to understand - how will my strategies need to change, and what are the new concepts I should integrate into my current strategy to ensure competitiveness over the next year or two. This is the focus of the book.

You have already seen many of the companies that are covered - Cisco, Dell, GE - but they are now dissected with a focus on their strategies rather than technologies. Much more interesting are the discussions of trends and concepts that you can apply right away. For example, as customers change from passive to active, how can you leverage that trend to enable faster growth and better service? A second example involves the Choiceboard, a strategic tool you can use to raise your business model. As I see dot.com's falling like flies, I continually consider how they would have fared if they could have focused on their business model rather than just introducing cool new technologies.

While the book was weak on the technology side, I was fine with that. My priority is to focus on my business model first, and then to understand which technologies will get me where I want to go.

Overall, I'd highly recommend it for any strategist. Those with a deep focus on technology may be dissatisfied, but anyone who is concerned with their business model will find much insight within.

This is not a book on the latest technology fad. Instead, it is about business strategy, and how to use technology to develop and execute the right strategy. The book has three key premises:

1) A business must be run according to its "business design" (the framework the authors use for developing and articulating the strategy a business should follow).

2) Digital technology dramatically enhances the strategic opportunities available to any business today -- even if it is not obvious at first how.

3) Business success (i.e. growth and profitability) depends crucially on figuring out what those opportunities are, determining how to exploit those opportunities, and then aligning the company around executing on those opportunities.

The natural audience for this book is anyone who has P&L responsibility (or aspires to have such responsibility) in a business or a division.

In my opinion, the message is dead-on. In particular, I think the "business design" construct they use is extremely powerful and actionable. My only complaint is that I wish they had spent a chapter explaining the "business design" construct in more detail for readers not already familiar with it. (The authors might respond that they have already done so in their earlier books -- "Value Migration" and "The Profit Zone" in particular -- but as they themselves say, you must repeat your message 700 times if you want it to be heard!)

The book is extremely readable:

* The first two chapters explain the basic concept.

* Many of the subsequent chapters are devoted to an analysis of a particular business and how that business used technology to its strategic advantage.

* A few chapters are devoted to particular digitally-enabled strategic options or themes that the authors believe deserve highlighting.

* The last chapter exhorts the reader to champion and execute digital opportunities tirelessly, and gives some tips for how to do so.

All in all, a great book for anyone interested in this topic.

This title of this book is misleading to the detriment of the book's sales by understating the book's focus.

The subject matter is really how to create new business models for outperforming competitors by taking advantage of the potential of computers and electronic communications. You can become more digital and not differentiate yourself in the eyes of customers, and that will be a losing strategy, as the authors make clear. In fact, almost all companies fall into that trap now.

I found this to be by far the best book that the authors have written. The ideas are immediately applicable, the concepts are clear, and the writing is especially transparent.

This book will be valuable to CEOs by making them more aware of how to redesign a business model, and to bring them up-to-date on the potential applications of information technology for this purpose. The book will be valuable to CIOs by making them aware of business model redesign as a discipline.

Companies usually make computer investments because the old system can't be kept running any more, or because of some potential for incremental cost savings. By contrast with those approaches, the authors' concept of Digital Business Design is "about using digital options to craft a business model that is not only superior, but unique."

So before you spend all that money to put in all kinds of new data processing capability, consider this book. It will be your best investment.

But realize that the book is also not focused on technology, per se. So if you want to learn specifically about which digital technologies you should be applying, look elsewhere.

The book is made practical by a four quadrant approach to help you diagnose the quality of your business model's design and how digital you are. Most companies will find themselves in the weak business design quadrant. The dot coms are highly digitalized, but usually have weak business models. Some innovative companies have great business models but are slow to put in computer technology. In a series of case histories, the authors make the case for having much more rapid revenue, profit, and stock price growth from using Digital Process Design. The examples include Dell versus Compaq, Cemex's computer-based dispatch of roving cement trucks in Mexico, Charles Schwab versus Merrill Lynch, Cisco Systems versus 3 Com et al, GE, IBM, AOL, eBay, and Yahoo! I enjoyed the way the authors posed the next set of business model challenges these companies face today.

The benefits of this new approach include improvements in knowledge, better fitting with customers, operating in real time to get results faster, customers happily serving themselves to create better results at lower cost, preventing errors rather than fixing them after the fact, enormous productivity improvements rather than small ones, and totally integrated business systems within and without your company.

The authors give you a set of questions to lead you through the analysis necessary to develop your new business model, based on market and information technology perspectives. They also show you how to establish an organizational culture that will facilitate these changes.

I particularly enjoyed the sections show examples of 1000 percent improvements and misconceptions that hinder progress.

The only significant limitation I found to this book is that it did not discuss enough the ways to use nondigital methods to create improved business models. For best results, you should combine digitial and nondigital approaches. Many people try to overturn communications barriers totally with technology, but bad personal habits can steal away most of the benefit. A small amount of training in better communication practices can improve the business results by several hundred percent, independent of any spending on technology. Combine the two approaches, and the results can be astoundingly good.

After you have finished reading and implementing what you have learned, I suggest that you ask yourself where else we need new models of focus and operation. How could the charity you give money to or volunteer for be improved ? How about the operations of the government in your city or town? The indicated changes described in this book can be even more dramatic and powerful if done in these institutions as well. Then the whole society can move forward more rapidly.

Make a difference that matters!

If there is a Customer Advocate Hall of Fame, I'd like to nominate the authors of this book for membership. Finally, someone is championing the cause of using technology only when it means a customer will have a better experience as a result.

Slywotzky and Morrison focus on planning how best to use technology, citing examples from some of the business world's most successfully digital companies, such as Charles Schwab and Cisco Systems. They demonstrate how technology decisions should be made based on the value they add to the customer experience, and also show the outstanding results this mindset brings.

The authors are realistic. They concede that not all functions can or should go digital, and they see a role for a hybrid business model that retains "bricks and mortar," where it makes sense. Slywotzky and Morrison warn that "going digital" takes time and requires a complete change of thinking for employees.

The ideas in this book are very practical. Even though the examples focus on large enterprises, the same issues face a small business and the same solutions can be applied. Just because your shop is on Main Street doesn't mean you can't use technology to advantage. What every business has in common is customers, and these business experts offer excellent ideas for using the tools of modern life to create long-lasting relationships that will grow your business.

As the world turns, firms are coming to realize that the real action in the digital space is --quietly, quickly and systemically -- seeing what new profit options digital technologies can open up for your customers and your firm. This book sets important frameworks for thinking, provides great checklists and templates, and goes through important examples on how it has been done.

A great companion to this is "Net Ready" by Amir Hartman and John Sifonis -- Read Slywotsky's book first --then use Net ready tools to continue through implementation. (These two books are the basis for the "Coaching in the Converging Economy" course in the MBA Program in the Smeal College of Business at Penn State.)

"How Digital is Your Business" reflects great thinking, practically tuned.

There are a plethora of business books that may be quickly tossed aside as current events rend their relevance asunder. This is not one of those books.

Slywotzky and Morrison have admirably produced a generic template by which any business in any industry may move toward a more digital business design. Offering all the answers would be an insurmountable task. Instead Slywotzky and Morrison provide the proper questions any businessperson should ask. The book's title, in the form of a question, is an indication that readers will be required to do much thinking to provide their own answers.

According to the authors, the objective of business is to know what the customer wants, rather than guessing and gambling that a set of pre-produced products will strike the customer's fancy. All in all, Slywotzky and Morrison sample companies that: 1. Develop a new DBD without the burden of legacy systems or infrastructure (Cisco, eBay) 2. Form a hybrid model of DBD from a largely virtual organization to one that encompasses virtual and physical facilities (Dell) 3. See the necessity to change from their traditional business model to DBD and have the courage to commit (Schwab, GE, IBM ) 4. May never have considered DBD in the past since their industry did not seem to fit the mold (Cemex)

These four divisions seem to apply to the majority of companies in existence today. In effect, any company can benefit from DBD if their fundamental business model is already sound.

Slywotzky and Morrison focus on successful companies that have adopted DBD. I would have been interested to hear more about companies that tried and failed to change their business. The authors do mention the Schlitz Beer debacle of the mid-1970's in which the company assumed (wrongly) that customers wouldn't notice an unappetizing haze at the bottom of the bottle. But this example doesn't address a failure to implement Digital Business Design. Perhaps in their next book, Slywotzky and Morrison can provide us their in-depth analysis of some specific DBD failures. There are plenty of examples to choose from this year.

An important dimension not addressed in the book is DBD adjustment during bad economic times. How might DBD be beneficial in an economic downturn, such as we are experiencing now? Unfortunately, the book was published just as the crash of 2000 occurred. There weren't many companies to examine in terms of approach to the sudden change of the economy. I presume we will see many such books in the coming year, and I would suggest that the authors of "How Digital..." update their book to include shining icons (if any) of economic survival, thanks, in part, to DBD.

Slywotzky and Morrison are quick to point out that the successful digital innovators did not arrive at their current state without pain. They also do not pretend that the DBD enhancements of these companies are perfect. But the companies are constantly striving to improve their business designs.

Chapter 15, "The Digital Organization", offers a succinct overview of what any business manager would have to do to get to a Digital Business Design. Concepts are laid out clearly and emphatically presented, often to the point of absolutism. For its directness alone, this single chapter should be extruded from the book and re-read occasionally. The authors will have you believing you can work through a transition to DBD.

This book serves as an excellent guide for the businessperson who wants to find better ways to know what the customer wants. It correctly deters thinking along the lines of upgrading current digital tools just because so many other companies are. In fact, due to the book's broad coverage of multiple industries, the authors are reticent to prescribe specific courses of action. This lack of detailed guidance, while intentional, might dismay a CEO in need of information on unique digital business designs.

However, for the novice, who may not fully comprehend the vast array of options in the new digital economy, How Digital is Your Business? is an excellent general tour. One must have a starting point when attempting to change the nature of his business, and this book is a fine first step.

The author credits for this book also include Karl Weber. His credentials indicate he is a business writer and editor. Perhaps his ghost-writing prowess gives the book its logical layout and smooth-flowing language. The narrative is exemplary for its concise delivery.

I heartily recommend this book to both the business manager and the student of business. Whether or not the companies mentioned in the book will continue to succeed in their implementation of DBD remains to be seen; but the soundness of the principals introduced in "How Digital Is Your Business?" should be of great use for years to come.

-S.R. Martin "nav66"

The authors Slywotzky and Morrison are renowned for their inspiring bestseller "Profit Zones" in which they elaborate on 22 different profit models for businesses. In this book on digital business design they explain how to design the 23rd profit model.

Digital Business Design is the art of using digital technologies to expand a company's strategic options. It is not about technology for its own sake; it's about serving customers, creating unique value propositions, leveraging talent, radically improving productivity, and increasing profits. It's about using digital options to craft a business model that is not only superior, but also unique.

Until recently, the probability that any organization would enjoy long-term success was determined by a single factor: the quality of its business design. Today, the multiplication of digital technologies has introduced a second crucial competitive factor: the degree of its relevant digitization.

FOUR-QUADRANT "MAP"
Any organization can be mapped into a four-quadrant "map" based on its level of digitization and its business design:
* Low digitization, bad business design (Southwest quadrant - "Weak Business Designs").
* High digitization, bad business design (Northwest quadrant - "The Dotcoms").
* Low digitization, great business design (Southeast quadrant - "Business Design Reinventors").
* High digitization, great business design (Northeast quadrant - "Digital Business Design").

YOUR DIGITAL RATIO
One important aspect of moving from a conventional to a Digital Business Design involves shifting many of your company's key activities from paper-based processes to digital (usually on-line) processes. To obtain at least a partial measure of how digital your business is, complete a simple exercise referred to as estimating your Digital Ratio. The authors suggest that you measure the following processes [0-100% digital]: selling, delivery, supply chain, customer service, billing, buying, recruiting, training, finance, R&D, manufacturing, and marketing.

Moving towards 100% digital is not an end in itself. Any decision to move a particular activity toward the right, and how far, depends on your key business issues, what is required to improve your value proposition for your customers and employees, and the capital and process efficiencies of your business.

On the surface, Digital Business Design indicates how many of your business processes are conducted on-line. At a deeper level, it tells whether you've transformed the way you do business by taking advantage of the new strategic options enabled by digital technologies.

THE DIGITAL BUSINESS DESIGN BENEFITS SCALE
Figuring your Digital Ratio is a useful exercise; for many companies, it will be a sobering one. But it only scratches the surface of what Digital Business Design really means. The experience of the digital innovators shows that Digital Business Design can fundamentally change the way you do business. It enables you to make a dramatic, positive shift toward implementing the benefits:

1. FROM GUESSING TO KNOWING. The basis of your business decision-making shifts from guessing to knowing.

2. FROM MISMATCH TO A PERFECT FIT. The value proposition you offer to your customers shifts from a mismatch (great or small) to a perfect fit.

3. FROM LAG TIME TO REAL TIME. Information flow within your company shifts from lag time to real time.

4. FROM SUPPLIER SERVICE TO CUSTOMER SELF-SERVICE. Your customer service model shifts from supplier service to customer self-service.

5. FROM LOW VALUE-ADDED WORK TO MAXIMUM TALENT LEVERAGE. The use of your employees' time shifts from predominantly low value-added work to maximum talent leverage.

6. FROM FIXING ERRORS TO PREVENTING ERRORS. Your processes shift from a focus on fixing errors to preventing them.

7. FROM 10% IMPROVEMENT TO 10X PRODUCTIVITY. Your productivity growth pattern shifts from a norm of 10 percent improvement to 10 times productivity.

8. FROM SEPARATE SILOS TO INTEGRATED SYSTEM. Your organization shifts from a collection of separate silos to an integrated system in which information, ideas, and solutions are shared.

The authors make a strong point of emphasizing that being digital is not only about the Internet (e-mail, e-commerce, e-services, etc.), but also all the other great things we do to MOVE FROM ATOMS TO BITS, e.g. empowering people and organizations via PCs, networks, ERP systems, etc.

Beware that Slywotzky in his marvellous business novel "Art of Profitability" (2002) becomes more reluctant to the concept of a "digital business design" as a 23rd profit model. So the verdict is still out on the digital profit model...

Nevertheless, most businesses must continually evaluate which of their business processes that profitably should be transformed from paper-based to digital. But this may just be part of an organization's operational excellence, not necessarily a new profit model ...

In 2005, the cases in the book (Cisco, Schwab, Dell, IBM, GE, etc.) are too well-known to stimulate current readers. That is why I only rate the book three stars.

Being a business development manager, I search for relevant tools to apply the new ideas to my own business. At the website for this book - HowDigitalIsYourBusiness.com -, you'll find excellent "Tours" to two case studies and two presentations on Bit Engine and Choiceboards.

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

I am writing this review as a part of MBA/MSE class participation

Is not a book on Internet or e-commerce, it is a book on Digital Business Design. Digital Business design is a new emerging Business model that would fundamentally change how business is done . The book does justice to this statement by explaining what DBD is, how it has evolved, what are the various components of DBD, what are the benefits of DBD, how it can be used to expand a company's strategic options and by presenting case studies of how the early pioneers of DBD have used it.

The book does not just try to preach something but the theme of the book is how to practice DBD, and to form a strategy to implement it. Through out the book, there are checkpoints to access the reader's company and where it falls in the DBD quadrant, what are its customer issues, what strategy needs to be implemented to move to the reference point in the DBD Matrix.

The author enfolds many techniques used by DBD to implement the classic "Think Atoms and Bits" strategy.

The book differs fundamentally from other Business strategy books like " Digital Darwinism", in the sense where others try to preach ways to survive in the Digital world, this books talks about making a Unique Differentiation. Also "Digital Darwinism" lacks the depth in terms of strategy which this book provides, where the former presents case studies of companies who have successfully implemented the seven breakthrough ideas to survive in the digital world, it does not talk of fundamental business design. Also "Digital Darwinism" talks about using Internet wherever possible, whereas "How Digital is your Business" talks about Business first, Design second and then being digital. "How Digital is your Business" also does not preach to use technology for its own sake, but first to evaluate your business issues and only if DBD is going to solve these issues implement it.

The title of this book is really "How is your business digital?" However, because it is commmonly thought that the more digital strategies that are implemented the better your business will get, the authors have cleverly diguised the title by moving the words around. This is a cunning plot to sell more books.

The Authors are quick to point this out. It is not, they profess, the amount of digitalization of a business that matters, it is whether the manner of digitalization is appropriate for that business.

"How is your business digital?" looks at how digital tools can be used as part of a sound business plan, to be progressively implemented over approximately four years. The first step is to know "How is your business", which involves examining it in the cold light of reality. The digital strategies implemented should help to keep you better informed of how your business is from day to day, or hour to hour, or even minute to minute. The book includes instructions for an internet site tour which gives practical examples of good websites and functional choiceboards.

The authors do a good job of pointing out that digital strategies make it possible to know your customers in ways not possible before, and offers a stern warning that if you do not go out of your way to meet your customers, then they will take their needs elsewhere.

The new economy has also been called the digital economy. One of the most important issues facing companies today is making the transition to the new economy and having a digital business. The authors describe "going digital" as a process where the company creates a great Digital Business Design (DBD) that allows the company to expand its strategic options, thereby crafting a unique and superior business model.
The reader, in learning how to make a company digital, will specifically learn:
· Digital Business Design involves creating a value proposition that is unique to the company for both your employees and your customers. It also involves having a profit model that is designed to protect this new revenue.
· Managing bits not atoms is the key to a successful Digital Business Design. Managing information, referred to as bits, instead of managing physical assets, referred to as atoms, allows the company to sell and service customers faster and cheaper.
· Creating choiceboards allows a company to move away from guessing customers expectations and move toward customers telling the company exactly what is expected. This is all done faster than before.
· Practicing 10X productivity allows for a higher level of work and greater productivity by the company leveraging its digital resources
· Creating a digital organization allows everyone at every level access to information. This organization is fast, accurate, changeable, and shifts the focus externally.
· Continue to develop talent base is done from the top down. This is the only way an organization can continue to compete in the digital age.