options for formulating a digital transformation strategy

The aim of this paper is to provide insights regarding the state of the art of Digital Transformation, ... an overview of the literature. Company Takeovers: More popular in the US, firms can acquire companies for their capabilities (acqui-hire). To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. The goal is to adapt companies to an ideal way of competing in the midst of a digital economy. Responsibility for Digital Transformation Strategy — Who Is in Charge: Group CEO, CEO of Business Unit, Group CDO/CTO, Group CIO/COO | 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. 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." + "<\/a>") Revenue Creation — How You Will Create Revenue from Future Business Operations 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. 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.” Digital Transformation is probably one of the most used buzzwords in management consulting right now. Moderate (Early Adopter): Firms deploy technology solutions at the early stages of their development. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Iss. That’s PNR. Internally: Firms can restructure the organization and/or train existing resources and/or hire new resources. //]]>, Click here for free 2-page executive summary (pdf), Click here for free presentation slides (pptx). Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. | Organizational Positioning of New Activities — Integrated Operations into Existing Structures or Create Separate Entities 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. Editor Login | In our practice we have seen more business where the financial pressure on the core business was high. About Options for Formulating a Digital Transformation Strategy. 2 > Conservative (Follower): Firms adopt established and widely used technology solutions. Business Processes: Operational changes internally at the business processes. Firms that are already financially struggling will find their options limited and the business model might not evolve fast enough to sustain the business. Skills: Operational changes may occur because of the new skill sets needed. [CDATA[ CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Supporter: Is IT a way of supporting business changes. Enabler: Is IT an enabler of new business opportunities. > 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. 5. The business scope is highly dependent on the individual firm and the context they are in. An SME perspective on this MIS Quarterly Executive: Vol. Financial Pressure on Core Business — Low, Medium, High > 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. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Executive Summary. 2, Options for Formulating a Digital Transformation Strategy, Christian Matt, LMU MunichFollow Without defining what a term means it’s hard to know what it entails and how it will impact the business. 15 Future Main Business Scope — Focused or Not Digital transformation can be costly: spending on new capabilities, training and/or restructuring the existing resources, changing the culture, etc. 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. 15 (2016) In their Digital Transformation Framework (DTF), the authors structure the digital transformation strategy around four key dimensions: 1. Why you need a digital transformation strategy. Some people argue that a digital strategy should be part of a firm’s IT strategy. 2. 9. For media companies the choice is either: content creation, content aggregation, content distribution, management of content platforms, etc. Digital transformation has much more to do with strategy and new ways of thinking. Digital has become increasingly integrated into who an organization is, what it does and how it grows. "Options for Formulating a Digital Transformation Strategy," PNR is a management consulting firm about helping people move their business forward. (2016) In 20112, Adobe changed their own business model from packaged software to subscription. To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital 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. 10. Developing a digital transformation strategy isn't easy. One example that I like is the Adobe transition from a licence model to a SaaS model. 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. 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). 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 Technological Ambition — Firm’s Approach to New Digital Technologies: Innovator, Early Adopter or Follower On top of that, digital transformation may look different across industries and business sizes. 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. Building of Competencies — How Do You Plan to Acquire Competencies: Internally, Partnerships, Company Takeovers or External Sourcing 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. 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 ». Journals FAQ The digital economy is marked by rapid development, evolution, innovation, and disruption. 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 by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. As a result, a digital transformation strategy becomes more interwoven in a company’s marketing approach. Alexander Benlian, LMU MunichFollow Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. 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. External Sourcing: Firms can hire consulting firms like us or outsourcing firms for their digital capabilities. Vol. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use … 11. Financing of New Digital Activities — Internal or External > Home 8. 6. Our mission is to change the way companies think, plan and grow. 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. However, for most companies, this is not an easy task because of the interactions between many different components of the business. Usually firms will couple these techniques either by training/shifting resources internally coupled with partnerships/acqui-hires and/or external sourcing. 4. Thomas Hess, University of North Carolina at GreensboroFollow 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. https://aisel.aisnet.org/misqe/vol15/iss2/6, Home A weekly round up of our favorite articles, research and insights about corporate 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. Florian Wiesbock, TU DarmstadtFollow, CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. 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. > Research Teaching Publications ... Options for Formulating a Digital Transformation Strategy. Copyright, // Vol is the Adobe transition from a licence model to a SaaS.... Coupled with partnerships/acqui-hires and/or external Sourcing firms create and introduce new technology, investing in gadgets! Example that I like is the Adobe transition from a licence model to a model... Core business was high these digital times, it is time to your... Technology, investing in fancy gadgets, or upgrading current systems strategy and new ways thinking! Is about more than simply adopting new technology, investing in fancy gadgets, or upgrading systems. 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Your business model/revenue streams can evolve fast enough to sustain the business corporate strategy to be prepared to adapt to!

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