8DECEMBER - JANUARYIN MY OPINIONIN MY OPINIONIN MY OPINIONDigital StrategyBy Douglas Duncan, CIO, Columbia Insurance GroupDelivering a product or service competitively and sustainably is the goal of every business. Sustainability means doing more than keeping the lights on.Typically, a business identifies a vision, develops a strategy to achieve that vision, and creates an operating model to execute that strategy. The operating model is evaluated by how well the strategic goals are met and is tweaked over time to optimize value creation as defined by the vision. External factors, such as market conditions, political and regulatory climate, and social trends, should be accounted for, but the focus is on what can be controlled within the strategic framework. This framework defines how to compete effectively. According to Harvard's Michael Porter, this is a choice of either providing a product or service that is very different from all others, less expensive than all others, or more tightly focused on a target market.There is no happy state where all the products/services are unique, everything is cheap to produce, and the needs of every consumer segment are 100% satisfied. Choices must be made.Saying your strategic goal is to transform your organization digitally is like saying your team will succeed by winning more games, or your finances will improve by managing money better. These statements are not helpful as a strategy because they are not focused on specific activities that will drive value within the organization.Behind a business strategy is an operating model customized to generate business success. Incredible efficiencies have been created through now common tools such as word processors, spreadsheets, scanners, and printers. The increase in knowledge sharing and information gathering made possible by email and the Internet is staggering. Recent advances in the use of artificial intelligence, natural language processing, and data analytics are poised to generate a new step-level increase in productivity. In years ahead, we should see this again through harnessing quantum computing, real-time augmented reality, and ubiquitous connectivity to the Internet of Things.Tools enabling operational efficiencies are not the same as digital transformation. Digital transformation is the change necessary to execute a business strategy leveraging appropriate technologies. Let's take this apart and examine what it really means.Digital transformation is the change. Digital transformation focuses on changes in engagement. Writing emails instead of letters was only a technology change. The digital transformation opportunity ofemail was found in contacting ten thousand people as easily as one, customizing the message based on what you know about the person, and providing an easily accessible channel for on-going communication between two people or within a group. Organizations that adopted email technology gained some efficiencies, but organizations that digitally transformed how Digital transformation is not a technology strategy;it is a business strategy that tightly integrates technology
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