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How companies use digital technologies to enhance customer offerings - summary of survey findings
(2019)
Digital technologies are transforming how companies do business. Social, mobile, analytics, cloud, and the Internet of Things - which together we refer to as SMACIT - along with artificial intelligence, blockchain, and an ongoing procession of new technologies create new capabilities : specifically, ubiquitous data, unlimited connectivity, and massive, affordable processing power.
Established companies are facing two transformations involving digital technologies: becoming digitized and becoming digital. The platforms enabling these transformations are fundamentally different in their purpose, target state, success metrics — and especially, in the key responsibilities of senior leaders. Because of these differences, companies will need to apply new rules new roles, processes, metrics, and norms — to the new digital platform. To develop new rules leaders should (1) separate the teams working on the digital platform, (2) allow digital platform leaders to experiment with new rules, and (3) identify new leaders and coach them to succeed with new rules. Given the time it takes to establish new rules, companies need to start breaking old rules now.
Successful digital business strategies rely less on strategic analysis and big bets than on experiments and learning. Consider, for example, that Airbnb grew out of the belief that people would pay to sleep on air mattress on a stranger's floor. Similarly, Instagram started as an app for checking in and hanging out with friends (and sharing pictures) that proved complicated to use. Twitter's founders had first tried a podcasting platform, Odeo, which Apple made obsolete with iTunes. AUDI AG had to kill of its "share a car with five friends" app before rolling out more successful mobility services in a number of countries. The digital successes did not grow out of a comprehensive upfront analysis. Digital strategy emerges from an idea - often, not a particularly good idea.
Royal Philip's goal was to use innovation to improve the lives of three billion people a year by 2025. To reach that goal, the company was shifting from selling medical products in a transactional manner to providing integrated healthcare solutions based on digital health technology ("HealthTech").
This shift required a dual transformation. On one hand, the company needed to transform how healthcare was conducted. Healthcare professionals would have to change the way they worked and reimbursement schemes needed to change to incentivize payers, providers, and patients in vastly different ways. On the other hand, Philips needed to redesign how it worked internally. The company componentized its business, introduced digital platforms, and co-created solutions with the various stakeholders of the healthcare industry.
In other words: Royal Philips was transforming itself in order to reinvent healthcare in the digital age.
To deliver on a digital value proposition, companies must fundamentally re-architect. In other words, they must redesign their processes, systems, roles, data, and habits to allow them to iteratively create, enhance, an replace digital offerings. This briefing examines how Royal Philips is transforming its value proposition - and its entire company - to seize the opportunities presented by digital technologies.
New digital technologies present both game-changing opportunities for—and existential threats to—companies whose success was built in the pre-digital economy. This article describes our findings from a study of 25 companies that were embarking on digital transformation journeys. We identified two digital strategies—customer engagement and digitized solutions—that provide direction for a digital transformation. Two technology-enabled assets are essential for executing those strategies: an operational backbone and a digital services platform. We describe how a big old company can combine these elements to navigate its digital transformation.
THE PROBLEM: Companies create problems for customers and employees when product innovation goes unmanaged. Eventually, excessive operational complexity hurts the bottom line.
THREE SOLUTIONS: Focus on product integration, not product proliferation. Make sure your product developers work closely with customerfacing and operational employees. And settle on a high-level purpose that can guide decision making.
The digital economy poses existential threats to — and game-changing opportunities for — companies that were successful in the pre-digital economy. What will distinguish those companies that successfully transform from those that become historical footnotes? This is the question a group of six researchers and consultants from Boston Consulting Group set out to examine. The team conducted in-depth interviews with senior executives at twenty-seven companies in different industries to explore the strategies and organizational initiatives they relied on to seize the opportunities associated with new, readily accessible digital technologies. This paper summarizes findings from this research and offers recommendations to business leaders responsible for digital business success.
In its 100+ years of company history, IBM reinvented itself multiple times. In the last 20 years, IBM had shifted from individual products to integrated solutions and moved to become a globally integrated enterprise with standardized processes. In 2014, the expanding adoption of social, mobile, analytics, and cloud (SMAC) technologies generated excitement in the industry. IBM believed these technologies presented a huge growth opportunity. Simultaneously, management viewed SMAC technologies as disruptive forces demanding transformative changes to how IBM worked. And introducing new ways of working to 400,000 employees in 175 countries was a daunting task.
Based on personal interviews with 17 IBM business and IT executives, the case illustrates organizational challenges of introducing current technologies that even providers of these technologies face – in other words, when they “eat their own cooking.” It demonstrates the difficulties large companies face when implementing technologies that students use daily and take for granted.