Digital technologies are transforming not just one aspect of business management but virtually every aspect.

They are rewriting the rules of customers, competition, data, innovation, and value.

Digital technologies change how we connect and create value with our customers.

We may have grown up in a world in which companies broadcast messages and shipped products to customers. But today the relationship is much more two-way: customers’ communications and reviews make them a bigger influencer than advertisements or celebrities, and customers’ dynamic participation has become a critical driver of business success.

Digital technologies transform how we need to think about competition.

More and more, we are competing not just with rival companies from within our industry but also with companies from outside our industry that are stealing customers away with their new digital offerings. We may find ourselves competing fiercely with a long-standing rival in one area while leveraging that company’s capabilities by cooperating in another sector of our business.

Increasingly, our competitive assets may no longer reside in our own organization; rather, they may be in a network of partners that we bring together in looser business relationships.

Digital technologies have changed our world perhaps most significantly in how we think about data.

In traditional businesses, data was expensive to obtain, difficult to store, and utilized in organizational silos. Just managing this data required that massive IT systems be purchased and maintained (think of the enterprise resource planning systems required just to track inventory from a factory in East Java to goods sold at a mall in Jakarta City).

Today, data is being generated at an unprecedented rate—not just by companies but by everyone. Moreover, cloud-based systems for storing data are increasingly cheap, readily available, and easy to use. The biggest challenge today is turning the enormous amount of data we have into valuable information.

Digital technologies are also transforming the ways that businesses innovate.


Traditionally, innovation was expensive, high stakes, and insular. Testing new ideas was difficult and costly, so businesses relied on their managers to guess what to build into a product before launching it in the market.

Today, digital technologies enable continuous testing and experimentation, processes that were inconceivable in the past. Prototypes can be built for pennies and ideas tested quickly with user communities. Constant learning and the rapid iteration of products, before and after their launch date, are becoming the norm.

Finally, digital technologies force us to think differently about how we understand and create value for the customer.



What customers value can change very quickly, and our competitors are constantly uncovering new opportunities that our customers may value. All too often, when a business hits upon success in the marketplace, a dangerous complacency sets in. 

As Andy Grove warned years ago, in the digital age, “only the paranoid survive.” Constantly pushing the envelope to find our next source of customer value is now an imperative.

Taken together, we can see how digital forces are reshaping five key domains of strategy: customers, competition, data, innovation, and value