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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.
Digital technologies are moving into physical products. Smart cars, connected lightbulbs and data-generating tennis rackets are examples of previously “pure” physical products that turned into “digitized products”. Digitizing products offers many use cases for consumers that will hopefully persuade them to buy these products. Yet, as revenues from selling digitized products will remain small in the near future, digitized product manufacturers have to look for other sources of benefits. Producer-side use cases describe how manufacturers can benefit internally from the digitized products they produce. Our article identifies three categories of such use cases: product-, service-, and process-related ones.
To remain relevant and mitigate disruption, traditional companies have to engage in multiple fast-paced experiments in digital offerings—revenue-generating solutions to what customers want and are willing to pay for, inspired by what is possible with digital technologies. After launching several digital offering initiatives, reinsurance giant Munich Re noticed that many experienced similar challenges. This case describes how Munich Re addressed these common challenges by building a foundation to help its digital offerings succeed. The foundation provided prioritized and staged funding; dedicated, hands-on expertise; and a digital platform of shared services. By 2020, this foundation was helping to support over seventy initiatives, including several that were in the market generating new sources of revenue for the company by enabling its clients—insurance companies—to better service their own customers.
Executive education in IS is under the scrutiny of many institution for the potential to bring in financial revenues. However teaching executives can be a very challenging task because of the previous experiences, variation in their previous education, and multiplicity of motivations for pursuing a continuous education. The panel aims at sharing successful experiences and highlighting challenges of dealing with executive audiences. The panel will present the results of a large survey among executive students and identify the three most significant elements emerged from the survey: the importance of theory that is actionable, the importance of varied pedagogical tools and practices, and the importance of relevance beyond practical tools. Based on a survey that will be distributed to the audience at the beginning of the panel, the audience will be actively engaged in sharing their experiences on the three topics aiming at capitalize and sum up the collective knowledge of the room.
By integrating its previously separate insurance, banking and investment products around customer life events (e.g., buying a car, getting married or buying a house), USAA is able to deliver a superior customer experience. To achieve the integration, USAA had to re-architect its business by redesigning structures, roles, incentives, processes and IT systems. The USAA case provides four principles for architecting a business to provide superior customer experience, which will become increasingly important in the digital economy.
The variety and interdependencies of enterprise systems that digitize large organizations’ processes have grown significantly, resulting in complex enterprise systems landscapes. Avoiding such complexity requires addressing the IT-business engagement gap between (inadvertent) producers of complexity in the business and those in IT who have to manage it. We identify mechanisms for tackling three components of this gap: 1) bridging the awareness gap through information sharing, 2) narrowing the incentive gap through shared goals, and 3) closing the authority gap by evening out power differentials through empowerment.
Recent digital technologies like the Internet of Things and Augmented Reality have brought IT into companies’ core products. What were previously purely physical products are becoming hybrid or digitized. Despite receiving a lot of recent attention, digitized products have only seen a slow uptake in businesses so far. In this paper, we study the challenges that keep companies from realizing the desired impacts of digitized products and the practices they employ to address these challenges. To do so, we looked at companies from a set of industries that are highly affected by digital transformation, but at the same time hesitant to move to a more digitized world: the creative industries. Based on a literature review and twelve interviews in creative industries, we developed a conceptual model that can serve as a basis for formulating testable hypotheses for further research in this area.
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.
The modern industrial corporation encompasses a myriad of different software applications, each of which must work in concert to deliver functionality to end-users. However, the increasingly complex and dynamic nature of competition in today’s product-markets dictates that this software portfolio be continually evolved and adapted, in order to meet new business challenges. This ability – to rapidly update, improve, remove, replace, and reimagine the software applications that underpin a firm’s competitive position – is at the heart of what has been called IT agility. Unfortunately, little work has examined the antecedents of IT agility, with respect to the choices a firm makes when designing its “Software Portfolio Architecture.”
We address this gap in the literature by exploring the relationship between software portfolio architecture and IT agility at the level of the individual applications in the architecture. In particular, we draw from modular systems theory to develop a series of hypotheses about how different types of coupling impact the ability to update, remove or replace the software applications in a firm’s portfolio. We test our hypotheses using longitudinal data from a large financial services firm, comprising over 1,000 applications and over 3,000 dependencies between them. Our methods allow us to disentangle the effects of different types and levels of coupling.
Our analysis reveals that applications with higher levels of coupling cost more to update, are harder to remove, and are harder to replace, than those with lower coupling. The measures of coupling that best explain differences in IT agility include all indirect dependencies between software applications (i.e., they include coupling and dependency relationships that are not easily visible to the system architect). Our results reveal the critical importance of software portfolio design decisions, in developing a portfolio of applications that can evolve and adapt over time.
In 2013, Royal Philips was two years into a daunting transformation. Following declining financial performance, CEO Frans van Houten aimed to turn the Dutch icon into a "high-performing Company" by 2017. This case study examines the challenges of the business-driven IT transformation at Royal Philips, a diversified technology company. The case discusses three crucial issues. First, the case reflects on Philips’ aim at creating value from combining locally relevant products and services while also leveraging its global scale and scope. Rewarded and unrewarded business complexity is analyzed. Second, the case identifies the need to design and align multiple elements of an enterprise (organizational, cultural, technical) to balance local responsiveness with global scale. Third, the case explains the role of IT (as an asset instead of a liability) in Philips’ transformation and discusses the new IT landscape with its digital platforms, and the new practices to create effective business-IT partnerships.
To remain relevant and mitigate disruption, traditional companies have to engage in multiple fast-paced experiments in digital offerings: revenue-generating solutions that leverage digital technologies to address customer needs. After launching several digital offering initiatives, reinsurance giant Munich Re noticed that many experienced similar challenges. This briefing describes how Munich Re addressed these common challenges by building a foundation for experimenting more systematically and successfully with digital offerings. The foundation has enabled Munich Re to become a serial innovator of digital offerings.