Newsletter No. 13 | Winning IT Strategies | What I See Clients Choosing

Let’s talk about horizon 1 innovation. If you’ve been following the 1-1-1 newsletter, you’ll know that horizon 1 innovations are where stable, mature businesses focus their efforts. These innovations aren’t about chasing disruptive ideas—they’re about optimizing what already works, reducing costs, and maximizing efficiency to stay competitive.

Enter digitalization. In today’s market, cost-saving and efficiency-building depend on how effectively you leverage technology. But much like innovation horizons, digital maturity varies widely, and businesses typically progress through four phases:

1 | Digitization – Converting analog processes into digital formats.
2 | Digitalization – Enhancing existing processes with digital tools.
3 | Digital Transformation – Radically transforming operations with new technologies.
4 | Hyper-Digitalization – Fully embedding digital systems into data-driven ecosystems.

The challenge isn’t just implementing tools; it’s about connecting the dots and building cohesive systems. Poorly planned digitalization often leads to costly inefficiencies and disconnected workflows, leaving businesses further behind instead of ahead.

So where do you start? By focusing on the areas that bring immediate gains while building a foundation for future growth. Let’s explore this with real-world examples and actionable insights you can use to navigate your own journey.

One Insight from Me

Walmart vs. Target: A Lesson in Digital Maturity

Both Walmart and Target face similar challenges: shifting consumer behaviors, economic uncertainty, and fierce competition from Amazon. Yet their approaches to digital maturity have yielded dramatically different results.

Walmart, firmly in the digital transformation phase, has achieved a 24% increase in U.S. online sales by strategically investing in:

1 | Automated fulfillment centers and robotics for faster, more cost-efficient delivery.

2 | AI-driven tools to optimize inventory and reduce waste.

3 | E-commerce enhancements, including expanded pickup and delivery options to meet evolving customer needs.

Target, in contrast, remains in the digitalization phase, focusing on smaller improvements like omnichannel services, cloud migration, and mobile app upgrades. These incremental steps haven’t kept pace with market demands, as evidenced by their 3.4% decline in comparable digital sales.

The difference? Walmart’s holistic digital strategy isn’t about reinvention—it’s about aligning investments to optimize core operations and drive cost efficiencies. This approach highlights a critical point for SMEs: patching systems without a broader vision often falls short.

How This Dynamic Mirrors My Current Projects

1 | Automating Accounts Payables for a B2B Wholesaler

I’m currently working with a B2B wholesaler that relies on an old but highly industry-specific ERP system. Together, we’re taking a phased approach to address current inefficiencies by utilizing their existing tools while planning for future upgrades. This strategy minimizes upfront costs and reduces disruption, but as I’ve advised the client, these are patches, not permanent fixes. Without a clear long-term plan, these stopgap measures could create limitations down the line. My role involves helping them define that roadmap and ensuring each step aligns with their broader operational goals.

2 | Digitalizing Patient Forms for a Healthcare Clinic

At a healthcare clinic I’m supporting, we’re developing a tool to digitally measure patient-reported outcomes. This initiative involves creating an MVP (minimum viable product) to test alignment with their larger corporate structures. This cautious strategy makes sense given their need to minimize risk while gathering feedback. However, as I’ve highlighted in our discussions, scaling this solution will require deeper investments to integrate it effectively into their overall operations. I’m guiding the process to ensure that the MVP serves as a strong foundation for future growth and efficiency.

The lesson here? Nothing good comes easy. While small steps can address immediate needs, they must tie into a broader IT roadmap. Thoughtful investments across and within innovation horizons ensure that businesses can scale efficiently, avoid costly mistakes, and stay competitive.

One Question for You

Are your current systems propelling you forward? Or is it time to patch, upgrade, or replace them altogether?

One Opportunity for Us

As the year winds down and many of us shift gears, it’s the perfect time to reflect on what we’ve achieved in 2024 and set goals for 2025—both personal and professional. I’d like to invite you to a special, festive edition of the dawn.friends lunch to celebrate the year, share insights, and explore how we can support each other in reaching our next milestones. Let’s take this opportunity to connect, brainstorm, and toast to the year ahead.

La Fontana, Zurich
December 6, 2024
12:00 PM