DTS - Week 1 (Articles and Lecture)

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Questions and Answers

What is the primary difference between digitization and digitalization?

Digitization focuses on value delivery, while digitalization focuses on data collection.

Digitization and digitalization are interchangeable terms.

Digitalization precedes digitization in all business processes.

Digitization involves converting physical information into digital form, while digitalization leverages digital information to improve operations. (correct)

What is the role of aggregation in digital transformation?

It focuses on data storage optimization.

It combines diverse data sets to derive new insights and solve previously unattainable problems. (correct)

It eliminates the need for connectivity in digital platforms.

It ensures all data is converted into a single format.

Which of the following is NOT a foundational process in digital transformation as per the "Articles - Week 1"?

Automation (correct)

Representation

Aggregation

Connectivity

Which of the following best defines a business model in the context of digital transformation?

The combination of value creation, value capture, and value delivery. Signup and view all the answers

What is the focus of connectivity in digital transformation?

Expanding network density and relevance for enhanced decision-making. Signup and view all the answers

Why are traditional and digital business models fundamentally different?

Digital models prioritize user engagement and ecosystem health, whereas traditional models emphasize product-level profitability. Signup and view all the answers

What KPI would a digital business prioritize over a traditional business?

Data quality and completeness Signup and view all the answers

In transitioning to digital business logic, what is the primary role of APIs?

They facilitate agile development and internal/external integration. Signup and view all the answers

Which of the following is an example of a qualitative shift in digital transformation?

Enhanced algorithmic representation for predictive modeling. Signup and view all the answers

How does digital transformation redefine firm scope?

By leveraging digital assets like software to enter multiple markets, blurring industry boundaries. Signup and view all the answers

What is a significant ethical concern raised by algorithmic management?

Risks of discrimination and coercion in decision-making processes. Signup and view all the answers

Which scenario exemplifies bounded rationality in digital representation?

A manager struggling to interpret algorithmically represented data for strategic decisions. Signup and view all the answers

Who should own data generated by digital devices according to "Articles - Week 1"?

There is no clear consensus. Signup and view all the answers

Why is hierarchy less effective in digitally transformed firms?

Connectivity reduces reliance on information asymmetry for authority. Signup and view all the answers

What approach best embodies agile development in digital transformation?

Iterative, sprint-based app development with open APIs. Signup and view all the answers

How does data fungibility impact firm strategies?

It enhances scalability by allowing data to be repurposed across applications. Signup and view all the answers

Which of the following best represents a digital firm's operational model?

Centralized data hubs supporting distributed applications. Signup and view all the answers

What is a primary driver of value in digital transformation?

Leveraging the interplay of representation, connectivity, and aggregation. Signup and view all the answers

What does the resource-based view (RBV) suggest about data and algorithms?

They are ultimate scale-free resources that generate additional value through interaction. Signup and view all the answers

What is the overarching implication of digital transformation for firms?

A novel framework is required to navigate the interaction of representation, connectivity, and aggregation. Signup and view all the answers

Study Notes

Concepts and Definitions

Digitization converts physical information to digital form, while digitalization leverages digital information to improve operations; the primary difference is focus.
Digitalization combines diverse data sets to derive new insights and solve previously unattainable problems through aggregation.
Representation, connectivity, and automation are foundational processes in digital transformation.
A business model in digital transformation combines value creation, value capture, and value delivery.
Connectivity in digital transformation enhances decision-making through expanded network density and relevance by reducing human intervention through data interpretation.

Strategic Shifts

Traditional and digital business models differ fundamentally; digital models prioritize user engagement and ecosystem health, whereas traditional models emphasize product-level profitability.
A digital business prioritizes data quality and completeness over profit margin.

Challenges and Ethical Considerations

Algorithmic management raises ethical concerns about discrimination and coercion in decision-making processes.
Bounded rationality in digital representation emerges when algorithms predict employee performance without human oversight.
Data generated by digital devices should ideally be owned by the firm operating the devices.
Digital transformation often replaces hierarchical structures with flat organizational structures reducing reliance on information asymmetry as a source of authority.

Critical Applications

Agile development, using iterative sprints and open APIs, embodies agile development in digital transformation.
Data fungibility enhances scalability by allowing data to be repurposed across applications.
Digital firms often utilize a centralized data hubs that support distributed applications.
Digital transformation emphasizes the interplay of representation, connectivity, and aggregation as a primary driver of value.

Conclusions

Data and algorithms are valuable, and their ability to be substituted is relatively low; this is a key implication from the Resource-Based View.
Digital transformation requires a new perspective on strategic leadership; traditional competitive principles may no longer be relevant.

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Description

Explore the key concepts and definitions related to digital transformation, including the distinctions between digitization and digitalization. Understand the strategic shifts in business models and how connectivity impacts decision-making in a digital economy.