Part 3: How to Become a Digital Enterprise
Digitalisation requires nothing less than a comprehensive transformation of the business model. From the outset, the digitalisation initiative must be launched and governed from the top due its all-encompassing impact on the enterprise. The digital transformation is then getting shaped strategically.
Part 3
The first two parts of this book explored the promises of digitalisation as well as the strong necessity
for enterprises to meet this challenge and act accordingly. Now assume that the top management of
the enterprise has developed a thorough understanding of the merits of digitalisation in their
business context, has a sound high-level business idea as to which direction digitalisation should be
taking and has decided to embark on a digitalisation initiative. As we have seen, such an undertaking
typically requires nothing less than the substantial adaptation and sometimes the comprehensive
transformation of the enterprise’s business model.
Part 3
Recently, there was an extraordinary article in an ordinary in-flight magazine on how women from
remote villages in India were succeeding as community leaders and business entrepreneurs. Those
who have some familiarity with how difficult it is for a village woman in India to step outside her
household chores will immediately recognise these achievements as extraordinary. Interestingly,
these achievements were made possible largely due to the success of ‘Digital India’, launched in 2015
by the Indian government.
Part 3
‘A picture without a frame is like a soul without a body.’ This quote from the famous painter Van Gogh relays the importance of frames in the context of presenting and viewing a picture. Frames are used to better define and protect the framed object (e.g., a piece of artwork) amidst its surroundings, to provide focus onto the object and, often, to enhance certain characteristics of the object. We are, of course, quite familiar with the relevance of frames in the context of pictures. However, the act of ‘framing’ is not only relevant but also critical to achieving the optimal solution to non-trivial challenges.
Part 3
Within the concept of digitalisation, an obvious question arises: where do we stand as an organisation with respect to our ability to take on a digital transformation? This is especially interesting as digitalisation not only shifts core competencies towards information technology (IT) and data analytics-enabled products, services or business models, but it also changes the entire operating sphere of a firm (e.g., customers, competitors and markets). Moreover, in the digital age disruptive innovations can cannibalise existing products and services more easily than ever.
Part 3
The digitalisation of the business entails a fundamental change of the enterprise’s business model based upon the extensive and pervasive use of digital technology. Digitalisation will require the comprehensive transformation of the business, which typically leads to change, conflict and resistance in the organisation. The balance of the old business model will be shaken up and structurally adapted to reap the promises of digitalisation. The role of technology changes massively from a support function to an inherent driver of the products and services offered.
Part 3
We introduced the role of the Chief Digital Officer, the CDO, as the main agent for the transformation in a company transitioning from a traditional business model to a digital one. Once the initial transformation is achieved, lasting potentially several years, the CDO role might be assumed by another CxO role on the Executive Board, maybe even evolving up to the new CEO role in a digitalised business. In this section, the transient nature of the CDO role is described further. It is the core responsibility of the CDO to build the digital capabilities of the company. He or she needs to shape the digital transformation and drive it within the enterprise’s organisation.
Part 3
The CDO is driving comprehensive change across the organisation. While he or she is directly responsible for a number of key tasks crucial for the success of this transformation, the CDO also needs to interact effectively with almost all other departments of the organisation, typically in a matrix-style approach. In order to drive forward the digitalisation agenda, the CDO and the CDO Office will work with the other CxO functions for highlights of those interactions). Given the number and variety of necessary interactions with other departments in the enterprise, the CDO needs to act from a position of strength as regards the ability to influence the enterprise.
Part 3
The term ‘mobilisation’ was first used around 1850 to describe the preparation of the Prussian Army for deployment. ‘Mobilisation is the process of assembling and organising troops, material, and equipment for active military service in time of war or national emergency. As such, it brings together the military and civilian sectors of society to harness the total power of the nation. It is the mechanism that facilitates successful prosecution of any conflict […]’ Nations, kingdoms and dynasties have been mobilising the military for millennia, often including large numbers of personnel and a wide variety of logistics support. Military mobilisation by the US during World War II was one of the largest and best-organised in the history of warfare.
Part 3
The role of the CDO has been created in the organisation to take full responsibility for the digital
transformation. Leadership has therefore been established for this profound and comprehensive
undertaking. As the first step, the digital transformation now needs to be shaped, which is a core responsibility of the CDO. Given its comprehensive nature, shaping the digital future and the transformation
necessary to reach the target is an exercise that will involve the whole company.
Part 3
As the first step to meet the enterprise’s digital challenge, its digital future must be shaped alongside an understanding of the necessary transformation, which we know is all-encompassing and involves the whole company. The CDO must determine the target state in cooperation with all stakeholders, both to gather the broadest possible input for the description of the digital transformation and also to create buy-in across the organisation from the outset. In order to mobilise truly strategic and creative thinking, intense workshops will be necessary, joining the Executive Board including the CEO, business owners and innovative internal employees, and external methodological and content experts.
