Why Can’t We Have More Than One Digital Strategy?

In “How to Develop a Great Digital Strategy,” an article published in the winter 2017 issue of MIT Sloan Management Review, authors Jeanne W. Ross, Ina M. Sebastian, and Cynthia M. Beath wrote about the importance of having a digital strategy that helps guide executives as they lead and monitor digital initiatives.

In their article, Ross, who is a principal research scientist at the MIT Center for Information Systems Research (CISR); Sebastian, who is a research associate at CISR; and Beath, who is a professor emerita of information systems at the University of Texas at Austin, argued that executives need to make a clear decision: whether to pursue, as they put it, “a customer engagement strategy or a digitized solutions strategy.” They advised that companies need to select one of those two strategies.

But several readers questioned the notion that executives need to choose one focus or the other (as opposed to pursuing multiple digital strategies in tandem). For instance, Kaiser H. Naseem, the Dubai-based head of banking and digital finance advisory services at International Finance Corp., wondered why customer engagement and digitized solutions strategies couldn’t be combined. In his industry, he argued, it’s difficult to separate digital solutions from customer engagement. “Without a good digital solution,” he wrote, “a financial institution may not be able to create positive personalized experiences that engender customer loyalty.”

Making Choices

In an email conversation, MIT Sloan Management Review raised Naseem’s question with Ross, Sebastian, and Beath. They responded:

“Companies must choose one digital strategy, either customer engagement or digitized solutions. The goal of customer engagement is to address customer needs and generate loyalty through a personalized experience. Like all strategies, developing digital business strategies involves making choices — both what you will do and what you won’t do. If a company doesn’t explicitly prioritize one goal over another, it puts senior management in the position of constantly weighing the trade-offs whenever there are decisions about resource allocation or organization structure. If you don’t make your strategic choice explicit, you will spend too much time debating the priorities.

“Beyond the investment of time, not choosing hinders efforts to integrate a company’s products and services. Invariably, the sales and service people will operate in their own customer engagement silo, while the product people will operate in their own digitized solutions silo. Obviously, there will be communication across the silos, but integration — as seen through the eyes of a customer — will be elusive.

“Finally, when you choose one strategy over the other, you will develop a technology base designed to implement that strategy. Customer engagement strategies often demand exceptional customer data; a digitized solutions strategy, on the other hand, might revolve around core systems targeting product life-cycle management or the sensors and analytics built into solutions involving the internet of things.”