Organizing for digital transformation - Empirical Cases

Abstract

The biggest challenge business leaders are facing today is to survive to the new digital economy. De facto, start-ups are disrupting established business models in every industry on a daily basis. They are not only setting the new market rules, they are creating a completely new game. Therefore, incumbents should take the opportunities that the digital revolution is offering and reinvent themselves by disrupting their own traditional businesses and practices in order to remain competitive and succeed in the new market. This research defines how established companies should organize themselves in order to successfully transform their own business and practices. Above all, it defines a roadmap that can be followed by any organization that seeks to gain competitive advantage and exploit new opportunities and solutions. Specifically, it demonstrates that the transformation journey should consider two separate but profoundly connected elements: (1) The new approach to the external market as the base of a (2) deep internal strategic re-organization. The new approach to the external market requires companies to communicate with it as well as analyse it on a regular basis. In order to do so companies have to constantly: Study the competition (both direct and indirect); Analyse the new technologies in the market; Monitoring the changes in the customer preferences and behaviours and seek new talents that can help the transformation success. These elements constitute the foundation of the overall internal re-organization that recognize in its non self-referential approach its major critical success factor. The Internal re-organization most important element is the IT repositioning within the organization that have to become to all effects a strategic partner for the business. Once the enabler has been pushed to the center it is the time to engage the Human resource department that will help the organization to decrease the change management costs and will help to create a new transformation culture. The Human resource department as well as the IT and the other functions have to define clearly who is the person that will be practically in charge of the organization transformation, or, in other words the transformation leader. He will practically manage and define the transformations streams and projects he will also orchestrate the overall process and determine the company’ fate. In the overall re-organization a new modality of work is required. For this reason, the organization should develop projects and solutions by using multifunctional teams that are composed by people coming from different functions and that can give different perspectives and ideas regarding a specific project or issue. To ensure that the different multifunctional teams are respecting the organization constraints and strategy a new role has to be defined: The Enterprise Project Manager Officer that coordinates the teams and reports the activities to the transformation leader. As the main characteristic of today economy is the speed at which changes occurs, companies will be asked to go through the transformation process several times in their life. To do so, they have to be audacious and exploit different ideas and possible solutions fast in order to rapidly decide the new vision and adjust the process to it. Thus, no process can be generalized, at the base there must be a deep knowledge of the company structure and characteristics and then a custom, more detail plan, can be design. And every time something change the process should be carefully reviewed. By following the different steps incumbents can effectively innovate and compete in the new market economy by continuously studying what is going on in the external market and reorganizing the transformation journey accordingly. In this way the percentage of transformation that fail will be drastically lowered and the success ratio will significantly increase.