To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital Accessibility Statement, Privacy 4. Enabler: Is IT an enabler of new business opportunities. Thomas Hess, Christian Matt, Alexander Benlian and Florian Wiesböck. | Options for Formulating a Digital Transformation Strategy. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use … Research Teaching Publications ... Options for Formulating a Digital Transformation Strategy. Digital transformation can be tough, particularly for well-established enterprises.Many businesses have success, but few have undergone a full transformation that prepares them for the future. Partnerships: Firms can partner with other firms and share resources/capabilities. 15, №2 pp.103–119 Executive Summary In this paper, the authors argue that to remain competitive, businesses must “formulate and execute strategies that embrace the implications of digital transformation and drive better operational performance.” The authors define digital transformation as “the changes digital technologies can bring about in a company’s business model, which result in changed products or organizational structures or in the automation of processes” with the main benefits of increasing productivity and innovations while also reducing costs. Executive Summary. Digital Transformation is probably one of the most used buzzwords in management consulting right now. 6. Firms that are already financially struggling will find their options limited and the business model might not evolve fast enough to sustain the business. Focus of Operational Changes — Products & Services, Business Processes or Skills The aim of this paper is to provide insights regarding the state of the art of Digital Transformation, ... an overview of the literature. 10. Technological Ambition — Firm’s Approach to New Digital Technologies: Innovator, Early Adopter or Follower Usually firms will couple these techniques either by training/shifting resources internally coupled with partnerships/acqui-hires and/or external sourcing. (2016) Thomas Hess, University of North Carolina at GreensboroFollow That’s the Point of No Return. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. A weekly round up of our favorite articles, research and insights about corporate strategy. In the end, they sold most of the assets to focus on their core business. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy.Click here for podcast summary (mp3)Click here for free 2-page executive summary (pdf)Click here for free presentation slides (pptx), Matt, Christian; Hess, Thomas; Benlian, Alexander; and Wiesbock, Florian However, even in these digital times, it would be a mistake to not also plan for digital as its own separate entity. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. document.write("" + "If you discover any data inconsistencies, or have any questions with regard to content and/or your AIS membership, please contact us via email." For media companies the choice is either: content creation, content aggregation, content distribution, management of content platforms, etc. Options for Formulating a Digital Transformation Strategy Main Navigation. Revenue Creation — How You Will Create Revenue from Future Business Operations To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. 3. AIS Journals Some people argue that a digital strategy should be part of a firm’s IT strategy. Yahoo was well known for doing this kind of acquisition in their shift to mobile. Changes in culture, leadership, processes, products, organizational structures are always fraught with resistance and require a clear agenda to help align everyone on the coordination, prioritization and implementation efforts of a firm’s transformation efforts. Request PDF | On Apr 6, 2020, Thomas Hess and others published Options for Formulating a Digital Transformation Strategy | Find, read and cite all the research you need on ResearchGate Executive}, year={2016}, volume={15} } Iss. The authors define digital transformation as “the changes digital technologies can bring about in a company’s business model, which result in changed products or organizational structures or in the automation of processes” with the main benefits of increasing productivity and innovations while also reducing costs. The optimal situation is when you can finance the transformation internally and that your business model/revenue streams can evolve fast enough. If the transformation is focused on the interface with customers (external business processes), the CDO/CTO can lead in collaboration with the CIO/COO. Developing a digital transformation strategy isn't easy. And incredible as it may seem, changing technology is not enough, you have to know how to choose the right new technologies, and use them in the right way to generate innovation and sustainable competitive advantage. Companies that want to keep up have to be prepared to adapt to this new digital landscape.. On top of that, digital transformation may look different across industries and business sizes. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. How do I set a reading intention. For example, in the case of General Electric which sold off most parts of GE Capital and decided to focus on the Industrial Internet)questions could have been: Do we sell all assets of GE financials, do we spin it off or do we keep some assets like GE Healthcare Equipment Finance. , Article 6. External Sourcing: Firms can hire consulting firms like us or outsourcing firms for their digital capabilities. In their Digital Transformation Framework (DTF), the authors structure the digital transformation strategy around four key dimensions: 1. Building of Competencies — How Do You Plan to Acquire Competencies: Internally, Partnerships, Company Takeovers or External Sourcing Options for Formulating a Digital Transformation Strategy With Thomas Hess, Christian Matt, Alexander Benlian, Florian Wiesböck CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. | However, for most companies, this is not an easy task because of the interactions between many different components of the business. It’s a rare transition, but one that has paid off for Adobe: the stock is now around $127 per share and was around $30 at the beginning of 2012. As the authors argue, “the accumulated knowledge from previous research and best practice on IT strategies cannot be simply transferred to digital transformation on strategies.” At PNR, the angle we usually take is to integrate the digital strategy in the business strategy with the goal of not having the technology in isolation of the business strategy. To set a reading intention, click through to any list item, and look for the panel on the left hand side: Responsibility for Digital Transformation Strategy — Who Is in Charge: Group CEO, CEO of Business Unit, Group CDO/CTO, Group CIO/COO Strategic Role of IT — IT as an Enabler or Supporter Vol. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. However, if there is a big culture clash or a dramatic change in business models, firms can create a separate business unit or a newly formed subsidiary. 2 One example that I like is the Adobe transition from a licence model to a SaaS model. Business Processes: Operational changes internally at the business processes. Authors/Editors: Hess, T. Matt, C. Benlian, A. FAQ "Options for Formulating a Digital Transformation Strategy," 15, №2 pp.103–119, Building Blocks of Digital Transformation, Guidelines for Formulating a Digital Transformation Strategy, Adobe transition from a licence model to a SaaS model, General Electric which sold off most parts of GE Capital and decided to focus on the Industrial Internet), Making Fast Strategic Decisions in High-Velocity Environments, Digital innovation strategy: A framework for diagnosing and improving digital product and service innovation, The Positive Impact of Strategic Planning on Small Firm Growth, PNR Podcast Episode 23: Jeremi Lavoie, Managing Director @ car2go Montreal ». Organizational Positioning of New Activities — Integrated Operations into Existing Structures or Create Separate Entities 2, Options for Formulating a Digital Transformation Strategy, Christian Matt, LMU MunichFollow https://aisel.aisnet.org/misqe/vol15/iss2/6, Home The digital economy is marked by rapid development, evolution, innovation, and disruption. PNR is a management consulting firm about helping people move their business forward. Moderate (Early Adopter): Firms deploy technology solutions at the early stages of their development. That’s PNR. Survival in the digital age – A framework for formulating a Digital Transformation Strategy in SME (Full Paper) Johannes Trenkle, Technical University of Munich, Munich, Germany, j.trenkle@tum.de ABSTRACT Many digitally successful companies have established a dedicated digital transformation strategy. Alexander Benlian, LMU MunichFollow Digital transformation projects should aim end-to-end transformation that’s why digital maturity of your business decides your next move in the digital transformation journey. About Products & Services: Operational changes externally at the customer interface. //]]>, Click here for free 2-page executive summary (pdf), Click here for free presentation slides (pptx). Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy. Conservative (Follower): Firms adopt established and widely used technology solutions. MIS Quarterly Executive: Vol. As a result, a digital transformation strategy becomes more interwoven in a company’s marketing approach. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Why you need a digital transformation strategy. > Depending on the level of competitiveness of the business and on the willingness of the management to take risk, this will impact if they decide to participate in digital transformation or not. Home 5. In our practice we have seen more business where the financial pressure on the core business was high. > Company Takeovers: More popular in the US, firms can acquire companies for their capabilities (acqui-hire). An SME perspective on this I have read cases such as the previously mentioned Adobe or GE where the pressure was low to medium, but management was willing to take risks and change the model, push to digitize the business model further. Editor Login | Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL) Date: 2016-06 To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. The goal is to adapt companies to an ideal way of competing in the midst of a digital economy. For media companies four options are available: paid content, a freemium model, advertising and complementary products (selling products on e-commerce is a frequent example). > For media companies the choices are: electronic sales channels, cross-media, enriched media, content platforms and extended business. Digital transformation can be costly: spending on new capabilities, training and/or restructuring the existing resources, changing the culture, etc. Our mission is to change the way companies think, plan and grow. It will also depend on the opportunities, the resources of the firms and on the risk appetite of the top management. To help managers address this challenge more sys-tematically, we describe how three German media companies successfully approached digital transformation. > Supporter: Is IT a way of supporting business changes. 7. 11. Financing of New Digital Activities — Internal or External 2. Florian Wiesbock, TU DarmstadtFollow, CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. 8. Iss. Financial Pressure on Core Business — Low, Medium, High The business scope is highly dependent on the individual firm and the context they are in. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Options for Formulating a Digital Transformation Strategy by Hess, T.; Matt, C.; Benlian, A.; Wiesbock, F. (2016) — MIS Quarterly Executive, Vol. + "<\/a>") Aggressive (Innovator): Firms create and introduce new technology solutions. Without defining what a term means it’s hard to know what it entails and how it will impact the business. "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 81032, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL). 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