These changes can be induced by new technologies and how they are adopted or leveraged by disruptive newcomers. However, the change can also have a broader context that has nothing to do with technologies. As Sameer Patel points out, disruption often happens in the last mile of the customer experience. We would say that, in general, disruption often happens at the various edges of the business; those same edges we just mentioned : the last mile, the customer, the broader ecosystem, etc.
The fact that digital transformation often focuses on the edges as we mentioned seems obvious when you look at the disruptions and growing expectations at the edges customer expectations, the knowledge worker at the end of a business process, etc. We always say that technologies are never disruptive. Social was a big game changer. Big data, analytics. In fact, all so-called third platform technologies and their accelerators, with a key role for information and artificial intelligence.
The Internet of Things or IoT, whereby we move to the next stage of the Internet is still in its early days however. Yet, at the same time it will be the glue for a majority of transformational evolutions. In consumer applications the Internet of Things so far has offered little tangible value or true innovation. The main value is seen in the Industrial Internet of Things , whereby industrial markets such as manufacturing and logistics are becoming leaders in transformation. The latter is also due to technologies which are starting to show the tip of their disruptive potential, including additive manufacturing and advanced robotics.
Is there a stage after that? There sure is. Scary for many and not for the next few years for sure. Yet at all times the human value and element remains key. And this ecosystem aspect brings us again to this essential aspect of digital transformation: the interdependency and interconnectedness of everything. It all overlaps and is connected; from disruption, business processes and models to business activities and each single activity of the organization and the broader ecosystem in which it operates.
The butterfly effect in action. Think about how virtually all business processes de facto are linked, the interconnectedness of business activities from the customer perspective, the way information runs across all digital transformations and much more. Businesses have always been changing and innovating, technologies always came with challenges and opportunities, regulations and ecosystems have always evolved.
Digital transformation is not just about technology but certainly also not just about companies in technological industries or the tech startup scene. The attention given by media and tech fans to disruptors such as Uber and the other usual suspects is not without danger and hype. Digital transformation leaders can be found in virtually all industries and often are not among these darlings of those fascinated by digital technologies and companies as such. Digital transformation is industry-agnostic and starts with the business goals, challenges, customers and context of the organization.
Last but not least, these so-called disruptive companies can be and will be disrupted as well, by any potential evolution. Their success is not guaranteed on a longer term and digital pure players sooner or later meet the human need for human interaction as well. So, digital transformation hits each industry.
But it can also affect all activities, divisions, functions and processes of the organization as it can impact the very business model as such. CapGemini Consulting was one of the first to come up with the concept of digital transformation and a digital transformation framework as you can see below. The McKinsey chart below shows just aspects where digital transformation can play:. Digital transformation is on the radar of many organizations. Four digital transformation realities we want to emphasize:. With a clear focus on digital customer experience and overall stakeholder experience, while optimizing costs, innovating and creating competitive differentiation, digital transformation is set to become the cornerstone of a digital transformation or DX economy in the words of IDC.
Adding more technologies to the 3rd Platform and, more importantly, witnessing an added layer to the core technologies and innovation accelerators of innovation and transformation, IDC sees a future whereby this layer where the optimization, transformation and innovation as such accelerates.
And this, in turn, will lead to a DX economy.
1. Conduct Customer Segmentation
Again, digital business transformation is not just a technology or IT matter. Taking into account the just mentioned caveat about technology and IT, of course there is a clear link with digital technologies. Regardless of the name: what mattered was that these technologies and, more importantly, their adoption by consumers, workers and businesses, their behavior-changing impact and the ways they were leveraged to achieve various goals were dramatically altering the business reality — a digital business reality.
These include robotics, natural interfaces, 3D Printing, the Internet of Things, cognitive systems and next generation security. So, we are still on a predominantly technological level here but with a clearer focus on business and customer innovation on top of the traditional goals of optimization and so forth. What we see now, at least at companies that have deployed initiatives with a clear maturity in various areas and a longer term vision, is that innovation regarding new business models, ways of engaging customers, building ecosystems of new revenue etc.
With the digital customer experience , innovation, competition, differentiation, automation, cost reduction, optimization, speed and experiences of stakeholders as business drivers, the mentioned technologies and the way they are used lead to that famous next wave or additional layer of innovation and of digital transformation. This in turn, IDC says, led to an innovation stage and information is essential to enable it. Digital transformation requires IT and information excellence in an end-to-end approach.
This stage of innovation and further challenges brought by disruptive business models will accelerate in the next years. Digital — and technologies in general — always had a deep impact on business and society. The technological evolutions and changes they bring upon us are accelerating fast, displaying exponential growth — and consequences. This speed is contextual and felt differently across various industries.
Still, speed is crucial in more than one way. Finally, exponential growth or speed of change in any area whatsoever customer behavior, regulatory frameworks, technologies etc. Creating the conditions to be ready for rapid evolutions and ideally pro-dapt and take the lead, changing the status quo, is part of business transformation. While a range of technologies have accelerated disruption, business innovation and changes in human behavior, the exponential growth and pace of change is just a fraction of what is yet to come.
Although digital business transformation is not about digital technologies as such, it is clear that the adoption and opportunities of technologies under the umbrellas of social business, cloud, mobility, Big Data analytics , cognitive computing and the Internet of Things and more will always speed up changes across society.
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However, the real acceleration happens when the acceleration of innovation and transformation as such goes exponential. And that is what analysts mean when they talk about the digital transformation economy or DX economy: not just acceleration of disruption and changes but acceleration of the actual digital transformations and innovations leading organizations will go through, making the gap with laggards even bigger. A dimension of being the disrupter instead of disrupted. Of forward-thinking change, anticipation, innovation and simply thinking and working out of the box of the usual, the past and the present.
To achieve them, however, many conditions need to be fulfilled in an often staged approach and always involving people, processes and technologies. Again three usual suspects indeed. Historically, digital transformation was also used in another sense: namely the digitization of paper into digital formats into processes.
These digitization dimensions of turning paper into digital information into processes in a more ad hoc way are obviously necessary in digital transformation in the broad sense.
Digital transformation projects requires several elements to succeed and digitization is a part of it. As it is the case in virtually all impactful changes that affect multiple stakeholders, divisions, processes and technologies including implementing an enterprise-wide marketing ROI approach, a content marketing strategy or any integrated marketing approach with CRM, marketing automation , etc. Knowing the role of data and analytics in digital transformation, there are even more opportunities for change and needs for change management. Grasp those opportunities and tackle the challenges.https://searchmemandtihenc.tk
IT strategy (information technology strategy)
People and processes. However, change management first and foremost obviously is about the human dimension: internal customers, stakeholders, the broader ecosystem within which organizations reside. No organization, business, governent or NGO, can realize a profound digital transformation without putting people first and having people on board.
If things change too fast for people or we are not taking into account the individuals that are touched, as well as their concerns, this can be a recipe for failure and at broader scale even resistance. The world is full of roadmaps for virtually any digital transformation project. However, roadmaps are what they are and the intent, priorities, pain points and actual needs for the individual business and the people in its ecosystem, within a broader reality, matters more. There is never a one size fits all solution and intent, outcomes and priorities steer the digital transformation efforts, on top of changing parameters in the ecosystem.
Priorities also means prioritization, often including looking at the low hanging fruit but always with the next steps and ultimate goals in mind, knowing these goals — and the context within which they were set — will evolve. There are still far too many gaps in regards to the digitization and automation of existing processes and the digitization of data from paper carriers.
You need digitization in order to optimize in a digital transformation context but digitization does not equal digital transformation.
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What matters is the combination, strategic and prioritized interconnecting and the actions you take to achieve business goals throug digitization and combining data. Furthermore, there is an even bigger gap between back-office processes and the front end. An example of this phenomenon can be seen in the financial industry, where there are extremely strong disconnects between the back-office and front end.
Digital transformation — just as social business, digital business and any form of customer-centric marketing and business processes, requires the ability to work across silos. In many cases, digital transformation even is about totally reworking organizational structures, which can be as much about collaborative methods, Centers of Excellence as removing specific silos.
The debate about the responsibility over digital transformation as a whole and within specific functions and processes in that sense of genuine transformation is archaic, even if it needs to be held as Chief Digital Officers, CIOs and other CxOs all play a role. Here again, there is no ideal solution regarding responsibility: context does matter. Marketing should learn from IT and IT from marketing.
Sales from customer service, the contact center from sales, the list goes on. Enterprise-wide digital transformation in the true sense as we defined it previously, requires a strategic approach. Knowing the many components, technologies, processes, people, goals and integrations that are required, it seems virtually impossible to design a digital transformation strategy. Still, as each business is different how do you start with a digital transformation strategy that works for your future, your goals, your potential disruptions, your workers, your market and your customers? Complex challenges and complex questions can rarely be answered by easy answers and frameworks.
However, in practice we see that easy answers are also lacking because easy questions are not asked to begin with. It is a recurring theme we see in many areas of business and technology. In digital transformation, in Internet of Things projects, in marketing, you name it: when technology is involved we seem to forget the basics.
Digital maturity frameworks and benchmarks do have value. They indicate that digital transformation is a journey towards acquiring a set of capabilities and changing a range of processes, functions, models and more with the purpose to be able to leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way, as we defined digital transformation earlier.
Digital transformation is not just about a specific project, process or optimization exercise. There are many components and intermediate goals. It happens in incremental steps, hence the digital maturity views. The various stages, steps, projects and so on in the context of digital transformation have one or more goals as such, yet at the same time fit within the broader purpose which we just established by referring to part of our definition. In other words: you have a roadmap and an end goal in mind. Although it might sound like a contradictio in terminis, the end goal of digital transformation changes, making it a journey.
New technologies will offer new opportunities and challenges, as will changing market conditions, competitive landscapes and so forth. While digital transformation has a goal of preparing us for those, at the same time that goal as such is subject to change. Change is a constant. Those previously mentioned basics are about the first steps in defining and deploying a digital transformation strategy. And, as always they are about the what, why and how. Yet, we need to make a distinction here. As you know people look at digital transformation in various ways. In most digital transformation projects the customer experience and the user experience remember both are not the same take center stage.
The customer experience, however, is a catalyst and driver of many digital transformation efforts. While technologies have affected customer behavior and expectations on one hand and enable transformations on the other, the focus is on people and processes. To truly enhance the customer experience in an enterprise-wide and holistic way, several elements, divisions, caveats, processes and technologies need to be taken into account. However, the people dimension is probably — and obviously — the most crucial of all in the customer and customer experience context.
The customer experience is probably also one of the key areas where business meets IT in a transformational perspective. Just as the customer experience is a catalyst in many digital transformation projects, it also has become pivotal in marketing, service and customer-facing processes. Marketing is one of many areas where digital transformations take place even leading to confusions whereby digital marketing transformation is used interchangeably with digital transformation.
The digital customer journey, data and data-driven marketing, social CRM, the contact center and — again — the customer experience are important elements in this regard. The digital marketing transformation imperative is driven by changing customer behavior and expectations before anything else. With the end of the sales funnel and ongoing fragmentation in an increasingly digital customer reality whereby control has shifted in mind, marketing has no choice than to transform and to work closer together with other divisions such as IT and customer service, to name just two.
This also has consequences for the marketing function and changing role of the CMO. Last but not least, the need for digital marketing transformation goes hand in hand with the connected optimization goals. This focus on optimization through digital transformation is directly linked with the goals of customer experience enhancement and stakeholder engagement. It goes hand in hand with process optimization, often automation and cost efficiencies.
Even if information is at the very center of digital transformation, the link between information management and digital transformation is not made often enough. If we look at other elements at the center of digital transformation this is a pity. After all, whatever the form of optimization, communication, collaboration, interaction, experiences, innovation and so on: information or content or data is a key success factor to make it happen on top of human factors, leadership, processes, organization etc.
There are four so-called information chaos challenges according to John Mancini of AIIM association of information management professionals :. No, says Erik Brynjolfsson. Karel Lodewyck L: I very much enjoyed this first online education experience. DBS is a must for all professionals. Abdul Salam K: Amazing course, it offers the necessary knowledge for executives to thrive in the digital age.
The course content, level, facilitation are all of top quality. Kashif P: It was a pleasure attending this program and I recommend it to anyone looking to improve their knowledge in this field. It is led by Erik Brynjolfsson and Andrew McAfee from MIT and the way they structured the lectures meant you get a very good understanding of all principles around Digital Transformation.
Unless you are working in a digital organization already, I would also recommend using Kodak as the case study and let your imagination loose on how they could have transformed to stay relevant. It really helped me grasp a good understanding of all the content. Jonas F: Good program with very good insights into different topics. Petr S: Just brilliant. I would reccomend it to all! Vasilii L: Interesting program on Digital strategy. Cesar Y: It is highly recommend.
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A roadmap for a digital transformation | McKinsey
Upon completion of this program, participants will be able to: Explore the ways in which the strategies for new or existing businesses can be improved with transformative technologies like artificial intelligence AI Understand the need to rebalance the three key relationships: human minds and machines; physical products and digital platforms; and the core and the crowd Identify transformative principles that have worked for real-world companies as you explore ways to implement them in your own context Develop a review of how transformational technologies could fit into a business of your choice "We want the participants in this program to do work that is relevant for their businesses; for their organizations.
Please note that faculty are subject to change and not all faculty teach in each session of the program. How The iPhone Helped Save the Planet In this Wired editorial, Andrew McAfee discusses how over the last 12 years, smartphones have helped dematerialize our consumption of countless other products. Race with the Machines As machines take on more jobs, many find themselves out of work or with raises indefinitely postponed. Erik Brynjolfsson, Scott Stern, and others weigh in. Read more about our ratings and reviews. Apply Now Register for this program on the GetSmarter website.
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