Description: Within a very short time, the issue of how to become a digital company has become a major headache for the management of every company in every industry. Just about every company has Internet and digital initiatives, but with the exception of a select few, these efforts are more a jumble of activities (setting up web sites, writing the corporation, giving laptops to everyone) than a coherent digital strategy. The end-result is that, despite the expenditure of much time, effort, and money, most companies are not reaping the benefits of digitalization because they haven't thought through the purpose of digitalization from the standpoint of the major issues facing their business.

A digital company uses technology to completely reverse the way business is done. Most companies guess about the demand for their product, even when they use the most modern of market research techniques. They produce it, market it and hope customers buy it. If they don't put on sale at huge discounts to make the way for next season's stuff. A digital company, on the other hand, gives customers exactly what they want. Dell, for example, uses technology -- the web -- so that customers can specify exactly the kind of computer their heart desires. Only then does Dell produce and ship the computer to the customer.

There are tremendous benefits to this reversal: (1) There's no guesswork and risk. If you know what customers want and give it to them, you have no unsold inventory. (2) Customers buy more -- frequently the higher priced, more profitable products -- since they don't have to compromise. (3) Much greater productivity, profit and growth and the beginning of strategic control over your market.

Becoming adigital company is not really about the Internet and the Web. It's about going back to basics. Before any digital initiative, ask first: "What are the top five business issues facing my company?" Only when you know the answers can you digitalize with the objective of improving and redefining the nature of your relationships with customers, creating strategic control, and generating new opportunities for profit and growth. Slywotzky and Morrison provide the clearest thinking and most practical program for meeting the next great revolution in business.

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