From .ppt to .done: How digitalisation works (0/5)
Although everyone talks “digitalisation”, it still remains a fuzzy term. So, what is “digitalisation” exactly, and how does it work? Where does it start, what are the methods and processes to do it right, and yes! where does it stop?
At Berg Software, because of the very nature of software outsourcing and custom software development, we’ve been supporting clients with their digitalisation projects and digital products/solutions since ages. We have seen trends come and go, with interest for digitalisation at all-times high during last year’s lockdowns.
Our software development expertise means we’re mainly qualified to talk about the technical layers of digitalisation, i.e., everything from software infrastructure to software development, delivery and maintenance. But then, software reaches its full potential when coupled with the right processes on client-side – and this is where, through 30 years of hands-on case studies, we’ve been involved with the birth, growth, success (and sometimes failures) of many digitalisation projects.
In 30 years, we’ve developed a thorough understanding of “digitalisation” beyond just the buzzwords, and we’re now consolidating it into a series of five articles, as follows:
March 03.: How digitalisation starts: the spark
During the recent months, we feel that most digitalisation projects started because of market pressure. No in-person access to most products/services forced companies to offer digital alternatives. Or, as is the case with physical products, firms had to digitalise parts of their value chain (from manufacturing to delivery, with a hard focus on digital distribution channels). Optimisation through digitalisation has been a thing for a long while, now it just gets a boost (e.g., with digitalisation projects running from smart manufacturing and maintenance, to predictive stocks, to dynamic pricing, to real-time delivery tracking etc.)
At the other end of the spectrum, people build digital products/solutions just because they love what they do. Whether in education, healthcare or entertainment, there’s a case to be made that passionate people build resilient (digital) projects.
Somewhere in the middle: context-based digitalisation projects, where owners use technological advancements to bridge market opportunities (and sure! make money along the way).
Therefore, in the first article, we’ll look at the starting points of various digitalisation projects and discuss whether/how company size has an impact on the outcomes. (Think entrepreneurs vs. intrapreneurs, and small vs. large companies.)
Also, we’ll look at how the convergence of various technologies makes digitalisation evolve slowly, then abruptly.
March 24.: First steps: “let’s fire-up this thing”
Regardless of where the spark comes from, a digitalisation project can only be successful if it delivers value to its users/clients.
There are various methods and frameworks to assess value: from directly experiencing one’s needs, to market research/business planning, to value proposition design etc. No matter the method, a digital product/solution usually goes from the idea, to a prototype (e.g. MVP / minimum viable product), to getting product-market fit, and finally to either scaling, pivoting, or shutting down.
Because of unproved value and limited access to resources, the starting team of a digitalisation project is usually small (a “two-pizza team”), and it usually stays small until the project gets traction with users/clients. Depending on the scope and value/growth perspectives, they can either be bootstrapped or start raising capital.
Along the way, to make sure they stay on track, companies will develop a set of metrics/KPIs. They can be about cost targets (e.g., burn rate, CAC/Customer Acquisition Cost), growth (e.g., MoM growth, churn), revenue (e.g., ARR, LTV), or bottom line (e.g., gross profit).
So, the second article will look into how the digitalisation project’s scaffolding is built to support future development and scaling.
April 14.: Software product development/management
The development of a digital product/solution usually starts once its value is clarified/confirmed. Especially for non-bootstrapped projects, it can get quite capital-intensive to build things that are eventually confirmed as value-less.
On top of the actual costs, development depends on getting the right software engineers / enough of them. Especially for startups, hiring can be challenging – but in larger companies, software developers might also be picky about the projects they join.
< Self-plug > This is why software outsourcing and/or custom software development can be an immensely practical solution: you can get all the expertise you need while staying agile/flexible and ready to up-/down-scale depending on what the future brings.
The third article will talk about digitalisation development/management, with a quick look at current techniques and tools, such as CI/CD and DevOps, Git etc.
May 5.: Go to market
The lifecycle of a digital product/solution lifecycle starts with its adoption by first, innovative users/clients. They are usually technology enthusiasts to whom digital products/services have intrinsic because of “gadgetery”; and they have an insight on how your digital product/service could help their business make a unique break-through.
The first separation: digitalisation will have a different story for already-existing, turned-digital products/services, than for full-digital-native ones.
The fourth article will discuss how technological uniqueness, coupled with visionary adopters, could propel your digitalisation project.
May 26.: Scaling
The benefits that got your digital product/service adopted by the first wave of innovative users/clients are not the same that will get you traction with the mainstream market.
At this point, you will most likely face very pragmatic individuals who will prefer to wait, instead of debugging your product – and therefore look for a safer, slower, measurable-benefits adoption. They will want a mature, standardized digital product/service – which in turn, is supposed to boost your growth and profits (through bigger sales volumes at lower development costs).
The fifth (and possibly last) article of the series will look into what your digital product/service needs to deliver in order to win pragmatic users/clients, and some techniques to enter mainstream markets.
Do you think there’s anything we should add to this series, or have a special insight on the topic of digitalisation? Please do let us know!