Expand Your
Data Sources
to Improve
Forecasting
Digital Quotient:
Weighing the Pros and
Cons of a Tech Upgrade
Advances in digital technology are forcing companies to adapt and integrate
at lightning speeds in order to keep up with demand and competition. Before
adopting the latest technologies, however, evaluate your digital quotient (DQ)—
the measurement that highlights how digital technology can either create
value or increase risk within your business—especially since installing and
implementing new technologies will inevitably disrupt your company's current
operations. Developed by Digital McKinsey (mckinsey.com), DQ assesses the
four primary areas found to drive digital performance:
1. STRATEGY
2. COMPANY CULTURE
3. ORGANIZATION (STRUCTURE, SUPPORT, AND TALENT)
4. CAPABILITIES
When considering a change, be sure to evaluate:
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the value of this change, such as its impact on improved or updated internal
processes, consumer engagement, and decreased expenses
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the risks you face by not investing in new technology and practices, such as
lost sales and decreased loyalty, or the potential effect of process disruption
on performance and morale
Remember: investment in technology may feel risky, and even prohibitive, on
the front-end. Yet by taking a longer-term view, you'll be able to better assess
whether that outlay of time and resources will help you to become the company
you desire to be.
Once you decide to move forward, invest in technology that aligns your
business capabilities with the needs, wants, and behaviors of your customer
base. Adapt too fast and you’ll outpace customers. Adapt too slowly and they’ll
outpace you. But hit it right, and you'll build a loyal customer base that leads to
increased sales and revenue.
As a business owner, forecasting
is something you do naturally.
Your company's past sales
performance can certainly
inform those decisions. Yet it's
just as critical that you collect
additional data when assessing
your company's readiness for
tomorrow.
Expanding beyond your triedand-true sources can help you
stay fresh in your forecasting, and
even drive incremental business
success. The key is