Budgeting
A traditional business strategy focuses on two key components; a long term roadmap and budget forecasting. Unfortunately, both of these elements are hard to replicate in a digital. Technology just moves too fast and accurate budgeting is difficult when the landscape is evolving at such a rapid rate.
Therefore, we have to take a different approach. An effective digital strategy focuses more on creating policies, aligning priorities and developing people. People with experience who can be trusted to make the right decisions as new technologies emerge, rather than defining everything up front. As the saying goes, it’s about “teaching a man to fish”.
A good place to start is by shifting thinking away from a series of fixed cost projects to a program of ongoing development.
This approach recognises that your website and other digital assets are never "finished". With this in mind, it makes little sense to apply a fixed price budget to them. Instead, expenditure on digital should be thought of as an annual, ongoing budget. By doing so, budgeting becomes much easier and digital services become more effective.
Where BMMI Shops needs to outsource some of their digital work, a retainer at an agreed level with a preferred agency, or agencies, will provide the best long term solution.
Rather than the boom/bust cycle as visualised above, an ongoing annual budget allows for continual development and iterative improvement of digital assets. Most importantly, it supports continual knowledge development throughout the organisation as depicted in the graphic below.
Defining a suitable annual budget
With the above said, it's still important to have an idea of what level of investment can be maintained.
According to a Nielsen report, last year, 90% of retail growth in Fast Moving Consumer Goods (FMCG) came from digital, with eCommerce driving growth across product categories. It's worth keeping this stat in mind when considering your budget split.
Costing initiatives
Of course, it's important to have an idea of what that annual budget might look like. What follows, are a number of detailed initiatives that have been identified as priorities for BMMI Shops in order to be competitive in a changing landscape.
Starting by creating a foundation for success with internal, operational initiatives, such as training and development, creating lines of communication within the division and interprofessionally, we then move on to customer facing actions such as email marketing, redesigning websites and so on.
Costing these up will provide a starting point for an annual budget. Remember, digital has the potential to maximise return on investment many times over. But only if it is approached correctly. As an investment, not an expense.