//]]>, Click here for free 2-page executive summary (pdf), Click here for free presentation slides (pptx). 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. 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. 15, №2 pp.103–119, Building Blocks of Digital Transformation, Guidelines for Formulating a Digital Transformation Strategy, Adobe transition from a licence model to a SaaS model, General Electric which sold off most parts of GE Capital and decided to focus on the Industrial Internet), Making Fast Strategic Decisions in High-Velocity Environments, Digital innovation strategy: A framework for diagnosing and improving digital product and service innovation, The Positive Impact of Strategic Planning on Small Firm Growth, PNR Podcast Episode 23: Jeremi Lavoie, Managing Director @ car2go Montreal ». 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. To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital On top of that, digital transformation may look different across industries and business sizes. A weekly round up of our favorite articles, research and insights about corporate strategy. 11. Financing of New Digital Activities — Internal or External Published: 2016: Type: 2. 4. Usually firms will couple these techniques either by training/shifting resources internally coupled with partnerships/acqui-hires and/or external sourcing. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. > 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. Developing a digital transformation strategy isn't easy. The ideal situation is when the CEO of the group or business unit is in charge. 2, Options for Formulating a Digital Transformation Strategy, Christian Matt, LMU MunichFollow + "<\/a>") Home Enabler: Is IT an enabler of new business opportunities. > The following chart shows the process of how we formulate a digital transformation strategy. Alexander Benlian, LMU MunichFollow How do I set a reading intention. > https://aisel.aisnet.org/misqe/vol15/iss2/6, Home However, for most companies, this is not an easy task because of the interactions between many different components of the business. Some people argue that a digital strategy should be part of a firm’s IT strategy. Company Takeovers: More popular in the US, firms can acquire companies for their capabilities (acqui-hire). Internally: Firms can restructure the organization and/or train existing resources and/or hire new resources. Thomas Hess, University of North Carolina at GreensboroFollow Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use … To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. : 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. If the transformation is focused on the interface with customers (external business processes), the CDO/CTO can lead in collaboration with the CIO/COO. Moderate (Early Adopter): Firms deploy technology solutions at the early stages of their development. Why you need a digital transformation strategy. 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 Executive Summary. 5. 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 Strategic Role of IT — IT as an Enabler or Supporter Skills: Operational changes may occur because of the new skill sets needed. Products & Services: Operational changes externally at the customer interface. In 20112, Adobe changed their own business model from packaged software to subscription. (2016) Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. Digital transformation can be tough, particularly for well-established enterprises.Many businesses have success, but few have undergone a full transformation that prepares them for the future. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Vol. Partnerships: Firms can partner with other firms and share resources/capabilities. > The optimal situation is when you can finance the transformation internally and that your business model/revenue streams can evolve fast enough. "Options for Formulating a Digital Transformation Strategy," Our mission is to change the way companies think, plan and grow. For media companies the choices are: electronic sales channels, cross-media, enriched media, content platforms and extended business. In their Digital Transformation Framework (DTF), the authors structure the digital transformation strategy around four key dimensions: 1. But undergoing a digital transformation is about more than simply adopting new technology, investing in fancy gadgets, or upgrading current systems. As a result, a digital transformation strategy becomes more interwoven in a company’s marketing approach. Digital transformation can be costly: spending on new capabilities, training and/or restructuring the existing resources, changing the culture, etc. Options for Formulating a Digital Transformation Strategy. Digital Transformation is probably one of the most used buzzwords in management consulting right now. 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. 15 (2016) Options for Formulating a Digital Transformation Strategy Main Navigation. Without defining what a term means it’s hard to know what it entails and how it will impact the business. Aggressive (Innovator): Firms create and introduce new technology solutions. 8. | FAQ 2 | 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. Focus of Operational Changes — Products & Services, Business Processes or Skills Journals Digital transformation has much more to do with strategy and new ways of thinking. Business Processes: Operational changes internally at the business processes. The digital economy is marked by rapid development, evolution, innovation, and disruption. Available at: Research Teaching Publications ... Options for Formulating a Digital Transformation Strategy. 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." Iss. One example that I like is the Adobe transition from a licence model to a SaaS model. To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital transformation. The revenue creation is highly dependent on the individual firm and the context they are in. 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. | 7. 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. Yahoo was well known for doing this kind of acquisition in their shift to mobile. The usual structure is firm that integrate the new digital operations into their current structure. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. MISQE Executive}, year={2016}, volume={15} } 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. 6. Responsibility for Digital Transformation Strategy — Who Is in Charge: Group CEO, CEO of Business Unit, Group CDO/CTO, Group CIO/COO Editor Login | Companies that want to keep up have to be prepared to adapt to this new digital landscape.. Conservative (Follower): Firms adopt established and widely used technology solutions. Options for Formulating a Digital Transformation Strategy. Revenue Creation — How You Will Create Revenue from Future Business Operations Technological Ambition — Firm’s Approach to New Digital Technologies: Innovator, Early Adopter or Follower It will also depend on the opportunities, the resources of the firms and on the risk appetite of the top management. External Sourcing: Firms can hire consulting firms like us or outsourcing firms for their digital capabilities. 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. [CDATA[ If the transformation is focused on internal business processes, the CIO/COO can lead. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. That’s the Point of No Return. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. Formulate a digital transformation strategy. PNR is a management consulting firm about helping people move their business forward. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. In the end, they sold most of the assets to focus on their core business. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. 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. 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. Degree of Digital Diversification — How “Digital” Is Your Interface to the Customer 9. Thomas Hess, Christian Matt, Alexander Benlian and Florian Wiesböck. To set a reading intention, click through to any list item, and look for the panel on the left hand side: 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. Iss. About In our practice we have seen more business where the financial pressure on the core business was high. Florian Wiesbock, TU DarmstadtFollow, CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. 15 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. 15, №2 pp.103–119. After deciding on your digital transformation objectives, it is time to plan your path to achieve those goals. Organizational Positioning of New Activities — Integrated Operations into Existing Structures or Create Separate Entities "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). That’s PNR. Digital has become increasingly integrated into who an organization is, what it does and how it grows. The business scope is highly dependent on the individual firm and the context they are in. However, even in these digital times, it would be a mistake to not also plan for digital as its own separate entity. For media companies the choice is either: content creation, content aggregation, content distribution, management of content platforms, etc. , Article 6. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Copyright, // The goal is to adapt companies to an ideal way of competing in the midst of a digital economy. Request PDF | On Apr 6, 2020, Thomas Hess and others published Options for Formulating a Digital Transformation Strategy | Find, read and cite all the research you need on ResearchGate Building of Competencies — How Do You Plan to Acquire Competencies: Internally, Partnerships, Company Takeovers or External Sourcing And/Or external Sourcing: firms can partner with other firms and on the risk of. 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