17/10/2017 Marketing Technology: Pure Play Vs Digital Factory Some organisations like Amazon have successfully opted for "pure play" digtal transformation. But most opt for a safer "digital factory" approach instead. Since digital transformation is sustainable when digital is melded with traditional IT, "pure play" must be part of the long term plan. The New Digital Capabilities The new digital evolution can be summarised as • Extreme Connectivity • Hyper Automation • Data Integration • Advanced Analytics Using the above, Marketing can build • New customer relationships • Revolutionary new business models • Models with available technology platforms • Integration with 3rd party applications • Better decision making models But all this should be implemented across all marketing functions, and not as separate initiatives. Digital Factory Vs Pure Play Most CMOs adopt the "digital factory" approach to launch their digital programs as it permits them to implement innovations at high speeds, without hindrances. A "digital factory" approach uses digital technology for modelling, communications and to operate (new) processes. This allows managers to configure, evaluate & go live with new processes in parallel to (& as an extension of) existing processes. For this, it is essential that independent teams deliberately work outside the purview of the traditional IT and with minimum restrictions, quickly turn pilot projects into innovative products & customer experiences. The alternate to this approach is "pure play" model which merges digitalization with existing IT. In "pure play", all marketing functions are involved & affected as against an "elite" section in "digital factory". Amazon & Flipkart are just 2 examples of companies who have adopted the "pure play" model. Most business leaders who are not as tech savvy usually take the safer option to stick to the "digital factory" approach - with separate digital and IT units delivering different "KRAs". This is probably because they are not confident of shifting the entire organisation to a “pure play” model. "Pure play" is the only sustainable approach in the long term - even if it seems to be disruptive in the short term. Integrated Digital & IT A common operating model for digital and IT teams is critical for long term success. This means that Marketing must integrate new digital capabilities with existing legacy systems & processes - taking as it were, all the functions forward. Else, the complicated digital initiatives (which involve large investments) may flounder. This is also partly because a divided approach divides teams into 2 sets of people: 1. The new, with a culture of rich data & innovative processes 2. The old, where impact of digitalisation is minimal This bifurcation based on old & new cultures becomes the stumbling block for total digitalisation in the long term. So, no matter how long it takes, "integrated Digital & IT" approach should be the ultimate plan for any organisation. Perpetually Evolving Structure "Integrated Digital & IT" approach is a long term, never-ending plan - decided not only by the starting point but also by Marketing's evolving digital aspirations. It requires both digital & traditional IT teams to constantly review existing ways of working. And collaborate on devising new paths - with margins for “making mistakes/learning”. This means that Marketing will need to operate in flexible, perpetually evolving structures. Also agile practices, data aggregation via automation, data access across the company and advanced analytics. Marketing ROI As Output One simple target is to get Marketing ROI as a standard output. With its myriad definitions & versions (including multiple performance matrices), if MROI is available as output from existing IT systems, it would ensure Integrated Digital & IT as it would have to access data from digitalisation systems as well as traditional IT. Thus ensuring that digitalisation plans are long term!