Digital transformation has much more to do with strategy and new ways of thinking. > Technological Ambition — Firm’s Approach to New Digital Technologies: Innovator, Early Adopter or Follower , Article 6. https://aisel.aisnet.org/misqe/vol15/iss2/6, Home FAQ Our approach is a collaborative, action-driven and ongoing planning process ignites collective decisions and real-time implementation, empowering our clients to put their business strategy into actions, activating real and immediate change. To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital transformation. Executive Summary. AIS Journals Organizational Positioning of New Activities — Integrated Operations into Existing Structures or Create Separate Entities For media companies the choice is either: content creation, content aggregation, content distribution, management of content platforms, etc. Firms that are already financially struggling will find their options limited and the business model might not evolve fast enough to sustain the business. 11. Financing of New Digital Activities — Internal or External > Digital transformation projects should aim end-to-end transformation that’s why digital maturity of your business decides your next move in the digital transformation journey. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Options for Formulating a Digital Transformation Strategy. 3. Changes in culture, leadership, processes, products, organizational structures are always fraught with resistance and require a clear agenda to help align everyone on the coordination, prioritization and implementation efforts of a firm’s transformation efforts. Thomas Hess, University of North Carolina at GreensboroFollow Financial Pressure on Core Business — Low, Medium, High [CDATA[ 15, №2 pp.103–119 Executive Summary In this paper, the authors argue that to remain competitive, businesses must “formulate and execute strategies that embrace the implications of digital transformation and drive better operational performance.” A weekly round up of our favorite articles, research and insights about corporate strategy. Thomas Hess, Christian Matt, Alexander Benlian and Florian Wiesböck. Some people argue that a digital strategy should be part of a firm’s IT strategy. | CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. But undergoing a digital transformation is about more than simply adopting new technology, investing in fancy gadgets, or upgrading current systems. How do I set a reading intention. For example, in the case of General Electric which sold off most parts of GE Capital and decided to focus on the Industrial Internet)questions could have been: Do we sell all assets of GE financials, do we spin it off or do we keep some assets like GE Healthcare Equipment Finance. Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL) Date: 2016-06 The ideal situation is when the CEO of the group or business unit is in charge. The revenue creation is highly dependent on the individual firm and the context they are in. : Research Teaching Publications ... Options for Formulating a Digital Transformation Strategy. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. 7. Digital has become increasingly integrated into who an organization is, what it does and how it grows. In their Digital Transformation Framework (DTF), the authors structure the digital transformation strategy around four key dimensions: 1. And incredible as it may seem, changing technology is not enough, you have to know how to choose the right new technologies, and use them in the right way to generate innovation and sustainable competitive advantage. If the transformation is focused on internal business processes, the CIO/COO can lead. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Journals In this paper, the authors argue that to remain competitive, businesses must “formulate and execute strategies that embrace the implications of digital transformation and drive better operational performance.” As we see in our day to day at PNR and as the authors rightly point out, this is not an easy task and many organizations are unable to keep pace with the digital reality. The aim of this paper is to provide insights regarding the state of the art of Digital Transformation, ... an overview of the literature. An SME perspective on this Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy. Enabler: Is IT an enabler of new business opportunities. Formulate a digital transformation strategy. Future Main Business Scope — Focused or Not Published: 2016: Type: In 20112, Adobe changed their own business model from packaged software to subscription. It’s a rare transition, but one that has paid off for Adobe: the stock is now around $127 per share and was around $30 at the beginning of 2012. On top of that, digital transformation may look different across industries and business sizes. Either emphasis on stability of the core businesses or diversify the traditional businesses and actively leverage the possibilities offered by digital technologies. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy.Click here for podcast summary (mp3)Click here for free 2-page executive summary (pdf)Click here for free presentation slides (pptx), Matt, Christian; Hess, Thomas; Benlian, Alexander; and Wiesbock, Florian Survival in the digital age – A framework for formulating a Digital Transformation Strategy in SME (Full Paper) Johannes Trenkle, Technical University of Munich, Munich, Germany, j.trenkle@tum.de ABSTRACT Many digitally successful companies have established a dedicated digital transformation strategy. Home | Iss. According to a 2017 survey on digital transformation by Constellation Research, 64% of respondents said a digital transformation strategy was essential to driving profits, 70% said they had an IoT (Internet of Things) strategy, and a whopping 75% said they have a Big Data strategy.. IoT, artificial intelligence (AI), and Big Data are all driving businesses to transform how they work and operate. However, if there is a big culture clash or a dramatic change in business models, firms can create a separate business unit or a newly formed subsidiary. That’s PNR. If the transformation is focused on the interface with customers (external business processes), the CDO/CTO can lead in collaboration with the CIO/COO. 6. document.write("" + "If you discover any data inconsistencies, or have any questions with regard to content and/or your AIS membership, please contact us via email." One example that I like is the Adobe transition from a licence model to a SaaS model. Available at: Business Processes: Operational changes internally at the business processes. Based on how three German media companies successfully approached digital transformation, this paper presents a framework and provide strategic questions to help handle the opportunities and risks of digital transformation. Conservative (Follower): Firms adopt established and widely used technology solutions. Options for Formulating a Digital Transformation Strategy Main Navigation. The usual structure is firm that integrate the new digital operations into their current structure. > To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. //]]>, Click here for free 2-page executive summary (pdf), Click here for free presentation slides (pptx). External Sourcing: Firms can hire consulting firms like us or outsourcing firms for their digital capabilities. However, even in these digital times, it would be a mistake to not also plan for digital as its own separate entity. + "<\/a>") > To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Authors/Editors: Hess, T. Matt, C. Benlian, A. To set a reading intention, click through to any list item, and look for the panel on the left hand side: Internally: Firms can restructure the organization and/or train existing resources and/or hire new resources. Our mission is to change the way companies think, plan and grow. Depending on the level of competitiveness of the business and on the willingness of the management to take risk, this will impact if they decide to participate in digital transformation or not. Usually firms will couple these techniques either by training/shifting resources internally coupled with partnerships/acqui-hires and/or external sourcing. In our practice we have seen more business where the financial pressure on the core business was high. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy. Copyright, // I have read cases such as the previously mentioned Adobe or GE where the pressure was low to medium, but management was willing to take risks and change the model, push to digitize the business model further. 15 Digital Transformation is probably one of the most used buzzwords in management consulting right now. About Alexander Benlian, LMU MunichFollow It will also depend on the opportunities, the resources of the firms and on the risk appetite of the top management. Options for Formulating a Digital Transformation Strategy. (2016) Options for Formulating a Digital Transformation Strategy CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. To achieve a successful digital transformation, broadcast a company-wide commitment, establish strong support for experimentation, and appoint a senior leader with four specific strengths, as described in the Apigee Institute Survey Results.. Articulating a clear digital transformation vision statement is a critical component. "Options for Formulating a Digital Transformation Strategy," However, for most companies, this is not an easy task because of the interactions between many different components of the business. The business scope is highly dependent on the individual firm and the context they are in. 2. Without defining what a term means it’s hard to know what it entails and how it will impact the business. Companies that want to keep up have to be prepared to adapt to this new digital landscape.. Focus of Operational Changes — Products & Services, Business Processes or Skills Products & Services: Operational changes externally at the customer interface. The authors define digital transformation as “the changes digital technologies can bring about in a company’s business model, which result in changed products or organizational structures or in the automation of processes” with the main benefits of increasing productivity and innovations while also reducing costs. After deciding on your digital transformation objectives, it is time to plan your path to achieve those goals. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Skills: Operational changes may occur because of the new skill sets needed. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. Strategic Role of IT — IT as an Enabler or Supporter 9. For media companies the choices are: electronic sales channels, cross-media, enriched media, content platforms and extended business. The following chart shows the process of how we formulate a digital transformation strategy. 15, №2 pp.103–119. Florian Wiesbock, TU DarmstadtFollow, CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Options for Formulating a Digital Transformation Strategy. The goal is to adapt companies to an ideal way of competing in the midst of a digital economy. As a result, a digital transformation strategy becomes more interwoven in a company’s marketing approach. Options for Formulating a Digital Transformation Strategy @article{Hess2016OptionsFF, title={Options for Formulating a Digital Transformation Strategy}, author={Thomas Hess and C. Matt and Alexander Benlian and Florian Wiesb{\"o}ck}, journal={MIS Q. 2, Options for Formulating a Digital Transformation Strategy, Christian Matt, LMU MunichFollow Developing a digital transformation strategy isn't easy. 4. | "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 81032, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL). Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use … PNR is a management consulting firm about helping people move their business forward. That’s the Point of No Return. For media companies four options are available: paid content, a freemium model, advertising and complementary products (selling products on e-commerce is a frequent example). To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital Why you need a digital transformation strategy. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. In the end, they sold most of the assets to focus on their core business. The optimal situation is when you can finance the transformation internally and that your business model/revenue streams can evolve fast enough. As the authors argue, “the accumulated knowledge from previous research and best practice on IT strategies cannot be simply transferred to digital transformation on strategies.” At PNR, the angle we usually take is to integrate the digital strategy in the business strategy with the goal of not having the technology in isolation of the business strategy. Building of Competencies — How Do You Plan to Acquire Competencies: Internally, Partnerships, Company Takeovers or External Sourcing 8. Digital transformation can be costly: spending on new capabilities, training and/or restructuring the existing resources, changing the culture, etc. MIS Quarterly Executive: Vol. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. Options for Formulating a Digital Transformation Strategy With Thomas Hess, Christian Matt, Alexander Benlian, Florian Wiesböck CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. MISQE 2 5. Aggressive (Innovator): Firms create and introduce new technology solutions. Yahoo was well known for doing this kind of acquisition in their shift to mobile. Editor Login | Supporter: Is IT a way of supporting business changes. Iss. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy. 10. Degree of Digital Diversification — How “Digital” Is Your Interface to the Customer A company ’ s marketing approach business sizes pressure on the risk appetite of the management... Evolution, innovation, and disruption in a company ’ s hard know! 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