Unit 06 Digital Transformation PDF

Emerging Issues of Unit 06 Management Unit 07 DIGITAL TRANSFORMATION THE DIGIT AL TRAN SFOR MATI ON CONTENTS Digital transformation explaination Elements of DigitalTransformation Model of DigitalTransformation Process of DigitalTransformation  In the digital er...

Emerging Issues of Unit 06 Management Unit 07 DIGITAL TRANSFORMATION THE DIGIT AL TRAN SFOR MATI ON CONTENTS Digital transformation explaination Elements of DigitalTransformation Model of DigitalTransformation Process of DigitalTransformation  In the digital era… 0 New employee 1 expectations 0 New societal 2 expectations 0 New societal 3 expectations Source: Harvard Business School (2022) Leadership in the Digital Era survey, n=1,500 THE DIGITAL TRANSFORMATION IMPERATIVE 97% 60% 47% Companies won’t remain Organizations have competitive unless they Organizations have the been on the digital embark on a digital right talent to transformation transformation compete in the digital journey for 1-5 era years. Source: Harvard Business School (2022) Leadership in the Digital Era survey, n=1,500 What companies need to compete in Digital Era Data- informed decision 55% Customer 61 focus making % Cross- function Continu 51% 44 collaborati ous on % learning Source: Harvard Business School (2022) Leadership in the Digital Era survey, n=1,500 Digitizati on, Unit 06 Digitaliza tion Digitization: DIGITAL is the process TRANSFORMATION Digital of converting analog information into digital Transfor form using an analog-to- mation digital converter, such as in an image scanner or for digital audio recordings. Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” Gartner’s glossary. s WHAT Digital IS Transformation? Digital transformation involves  a change in leadership,  different thinking,  the encouragement of innovation and new business models,  incorporating digitisation of assets and an increased use of technology to improve the experience of the organisation’s employees, customers, suppliers, partners and stakeholders.”  WHAT Digital IS Transformation? “Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers... ….it's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure. ” TRANSFORMATI Increa s ed revenue BENEFITS OF 01 DIGITAL 03 02 Getting Increased more done com petitive faster and advantage ON with less Excerpt From: Lindsay Herbert. “Digital Transformation.”  COMMON DIGITAL CHALLENGES AND THEIR TYPICAL ROOT CAUSES Fears from staff Decreases in business- ….most often is a fear the as- usual productivity business is moving away from Digital …the biggest overlooked areas is ‘the existing employees’ core Challenge the loss of time and resource a skills. s business will incur, while those assets are diverted to the DT Resistance from programme management ….a perceived threat to their “Inconsistencies in the autonomy and area of responsibility quality of customer and staff experiences” Loss of revenue from non- some areas of the business are lagging behind once digital digital customer transformation has already segments taken place in some parts of ….the potential loss of revenue/value from the organization customers who currently rely on traditional channels to transact, access Excerpt From: Lindsay Herbert. “Digital Transformation.” services, and engage with your organization. What are elements of digital transformation? NEW ELEMENTS OF DIGITAL TRANSFORMATION Source: Didier Bonnet, George Westerman (2021) ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING CUSTOMER EXPERIENCE CUSTOM ER EXPERIENC E DESIGN INTELLIGENCE Design and deliver compelling Integrating customer customer experiences requires: data across silos & - Tools and practices to provide an understanding intimate understanding of human customer behavior behaviors and the ability to surface customer insights Technology: - Ability to digitally reengineer machine customer experiences EMOTIONA L ENGA GEMENT learning can do Emotionally engaged customers are 52% more valuable than highly satisfied customers. Use digital technology to solicit and enable customer participation across their value chains  ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING OPERATIONS CORE PROCESS CONNECTED & DYNAMIC DATA-DRIVEN AUTOMATION OPERATIONS DECISION MAKING Digitally reinvent Use sensors, cloud Taking advantage of operations: infrastructure, and connected devices, new Establishing a core of machine learning (digital machine learning digitized processes threads) connecting algorithms, smarter Incorporates machine machines, models, and experimentation, and learning, robotics, processes provide a single plentiful data to make augmented reality, and source of truth to manage, strategic and other technologies to optimize, and enhance operational decisions. digitally enable its processes expansion  ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING EMPLOYEE EXPERIENCE PERFORMANCE ENHANCEMENT FUTURE READYING FLEXFORCING Companies are considering Transforming the Companies need to build how robotics and other learning and agility into their talent digital technologies can development function  sourcing systems  To increase employee Providing employees respond to fast- paced productivity and with the skills they digital opportunities and performance — enabling threats. need to keep up with Multiskilling employee people to work faster, the pace of change. Using contingent smarter, and more safely. workers Outsourcing (old) ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING BUSINESS MODEL A business model describes the rationale of how an organization creates, delivers, and captures value ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING BUSINESS MODEL  ELEMENTS OF DIGITAL TRANSFORMATION TRANSFORMING BUSINESS MODEL DIGITAL ENHANCEMENTS Digitally enhance their INFORMATION BASED existing business models SERVICE EXTENSIONS without requiring major Companies are expanding changes to the business. their product based Turning product sales into business models with service offerings 1 information-based services, combining MULTISIDED PLATFORM 3 2 sensors, communication BUSINESS networks, apps, and analytics to create value Launching a successful for customers and new multisided platform sources of revenue for ecosystem requires themselves. specific economic This requires advanced conditions, heavy analytic capabilities, investment, and luck to end-to-end service reach profitable scale. design, and tight integration with customers’ devices and  ELEMENTS OF DIGITAL TRANSFORMATION DIGITAL PLATFORMS EXTERNALLY CORE FACING PLATFORM PLATFORM - The technology Platform that powers the backbone that websites, apps, and other power a company’s processes that connect to key processes is a customers and ecosystem strong foundation for operational and DATA PLATFORM partners. - Should be well transactional structured, well Platform that provides the systems. ability to perform intense managed, and only as complex as it analytics, build and test really needs to be. algorithms, without disrupting the company’s operational systems.  FOUR CATEGORIES OF DT ENABLERS The collection, The combination of AI processing, and 1 technologies that enable autonomous data to facilitate analysis of and improve digitized predictions 2 work and self- and decisions. organizing systems. DIGITAL This reduces error DATA rates, increases speed, AUTOMATI and makes it possible Using broadband ON to reduce operating telecommunications 4 costs. for the mobile or 3 The mobile internet wired networking of provides direct access the entire value-added to the client, who in chain allows for the NETWORK turn is provided with synchronization of ING DIGITA higher levels of supply chains, which L CUSOM transparency and new leads to a reduction ER services. in production times ACCES and shorter S (Source: Boue´e and innovation cycles Schaible 2015: 19) TOP AREAS OF FOCUS IN DIGITAL TRANSFORMATION 03 04 (2022) 16% Proces 14% Data s Managem Efficie ent 02 ncy 05 17% 10% Technology Corpor ate Infrastruct Culture ure 01 06 23% 5% Custome Employe r e Experie Experie nce nce Source: Leadership in the Digital Era survey, n=1,500, HBS THE DIGITAL TRANSFORMATION PYRAMID Roadmap for the Digital Transformation of Business Models  Roadmap for the Digital Transformation of Business Models 1. 2. 3. 4. 5. Digital Digita Digital Digital Digit Implementat l Ambiti Potenti al ion Knowledge Realit Development on of Identification al of Evaluation Fit of the Implementatio Objecti acquisition y a Digital the Digital digital business n of the digital about Digital Ambition for Potential for model suitability business ves Reality the business the business model - Analysis of value Set model Collection of model - Determine the - Finalize & implement chain and action objectives best combination of the digital BM - Collection of regarding practices for options. -Design of the customer the DT DT -Evaluate the digital customer Activit requirements Prioritize Collection of combinations in experience - Sketch the business enablers for DT terms of -Design the digital ies existing BM model Design of BM fit, fulfillment value creation dimensions options for of the customer’s network & partner future BM requirements and integration -Value chains - Objective per - Best practices for Evaluate achievement -Finalized and with actors category for the DT combinations objectives implemented DT Resu - Customer DT (own industry/ other of the digital model lts requirements - Relevant business -Digital - Uniform BM industries) model which serve customer description of dimensions as experience existing - Enablers for the DT the basis for the -Digital value business - Option space for DT finalization creation network model with partners In the digital era In the digital era, companies face a more dynamic competitive environment: key competitors are no longer the usual suspects, customer and stakeholder expectations continue to evolve. The speed and complexity of technological change require digital transformations to be more iterative than other forms of corporate change.  THE LEADERSHIP TRAITS MOST CRITICAL TO SUCCESS IN DIGITAL TRANSFORMATION. 71% 48 47% 43% Adaptability % Creativity Comfort with ambiguity Curiosity Source: Harvard Business School (2022) Leadership in the Digital Era survey, n=1,500