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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.
In 2016, German car manufacturer the Audi Group (AUDI AG) was working on an expanding array of digital innovations. The goals of these innovations varied, and included strengthening customer- and employee-facing processes, digitally enhancing existing products, and developing new, potentially disruptive business models. Audi's IT unit was critical to each of these efforts. This case examines the different ways in which digitization can help to enhance and transform an organization's processes, products, and business models. The case also highlights the challenges that may arise as organizations attempt to expand and diversify their portfolio of digital innovations.
The proliferation of convergence of digital technologies SMACIT (social, mobile, analytics, cloud, and Internet of Things) has created significant threats and opportunities to established companies. Business leaders must rethink their business strategies and develop what we refer to as a digital strategy. Our research shows four keys to successfully defining and executing a digital strategy:
1. zeroing in on a customer engagement or digitized solutions strategy to guide the transformation, 2. building operational excellence, 3. creating a powerful digital services backbone to facilitate rapid innovation and responsiveness, and 4. ensuring ongoing organizational redesign. A list of publications from the research is provided at the end of this document.
The MIT Center for Information Systems Research surveyed 255 executives in 2015 to investigate how companies are managing business complexity. This report details the findings from our analysis of the survey data:
1. Some product complexity adds value, some does not. Specifically, companies with more links (aka integration) in their product and service portfolio are higher performing. - 2. Product variety makes it more difficult for costumers and employees to get things done. These customers and employee difficulties impair a company's performance. - 3. Companies that excel at making it easy for employees and customers to get things done differentiate themselves by applying a set of complexity management practices around enterprise architecture, role reconfiguration, and the use of metrics and incentive systems.
Based on these findings, we recommend that companies make product complexity a strategic chois, invest in the abovementioned complexity management practices, and use costumer and employee dfficulties as key metrics for product innovation.
Recent MIT CISR research found that an obsessive focus on innovation is a characteristic of CIOs of top-performing firms. There are now more ways than ever that a firm can be disrupted by and disruptive with digital innovations. Indeed, a growing number of firms and individuals are using increasingly powerful digital technologies and figuring out ways to develop better products and services, better customer and employee experiences, and new business models. The new digital imperative is to compete with more types of digital innovations - and IT units must refine approaches to producing them. Based on an in-depth caste study, this briefing takes a look at how German car manufacturer AUDI AG has expanded its portfolio of digital innovations.
The digital economy has created intense demands for innovations. Companies are responding in part by creating new digital products and services to meet increasing customer expectations.
MIT CISR findings indicate that product variety is NOT directly related to firm performance, and IS related to increased difficulties for costumers and employees.
The use of digital, IT-based components in physical products is becoming increasingly relevant in practice. Surprisingly, the strategic impact of these "digitized products" has not received a lot of attention in IS research so far. Extant papers on the topic rely on ambiguous terminology (e.g., "smart products", "cyber-physical systems", "digital product-service systems") and underlying concepts differ widely. Based on an extensive literature review, this article provides an overview of the different terms and identifies five conceptual elements that form the building blocks of digitized products in research: "hybridity" (i.e., the combination of digital and physical components), connectivity, smartness, digitized product-service bundles (servitization of digitized products), and digitized product ecosystems. The implication for practitioners is that each element comes with different managerial challenges that companies need to address when incorporating the respective element in their products. The research implication is that each conceptual element is supported by different theoretical streams.