Digitalization and its consequences for companies are currently the key topics at top management level. Digitalization is not a new phenomenon and disruptive technologies have always required companies to make considerable modifications. By Nicole Dufft, Independent Vice President PAC
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The extent and speed with which digital technologies are changing business models and business sectors have increased exponentially. The same applies for opportunities and risks. It is therefore obvious why digital transformation has become the strategic focus everywhere. Companies have to set forth new strategic guidelines, which PAC has defined as the „three strategic imperatives of digitalization“, namely consistent customer orientation, data-based business strategies, as well as agility and an ability to innovate.
Consistent customer orientation: in the networked digital world, in which customers share their experiences with the whole world and can switch to the competition within seconds, optimal customer experience has become the central key to competition. The strategic focus must be on the holistic and individualized optimization of the customer experience across all points of contact.
Data-based business strategies: due to the growing use of digital interaction-channels with customers and the increasing number of devices and machines connected to the Internet, the amount of business-critical data has virtually exploded in the last few years. The intelligent use of this data not only forms the basis for individualized optimization of the customer experience, but above all for the optimization of processes, operative and strategic decision-making, and business innovations. Companies must be capable of centrally collecting and saving the mass of data from various sources, evaluating this data in real time and providing it for various applications. Data-based innovations and decision-making processes must be part of the company DNA.
Agility and an ability to innovate: in this digital age, the ability to quickly react to new market trends and provide innovations is essential for survival. Companies must do away with conventional thought and work processes, outdated management approaches, and traditional control mechanisms. They need agile IT architectures and working environments!
The new role of IT
IT must play a central role in the transformation process – both from a technical and an organizational perspective. Digitally successful companies cannot even be conceived of without IT taking a central role. A central organizational unit is required that coordinates digital initiatives on the basis of an overall digital strategy; in so doing, it ensures that the applications developed during this process intermesh. In order to fulfill this strategic role and position itself as a pioneer and service provider for other specialist departments, the IT organization itself has to change fundamentally. Similar to a start-up, it must become an agile, interactive and learning system, in which the planning and control are replaced by a step-by-step approach to problem solutions. For this purpose, a degree of freedom must be attained: IT organizations that are „entangled“ in operative tasks will lack the staying power required to push through the necessary change.
Freedom can be generated through the consolidation, standardization and modernization of the existing IT landscape („legacy“) and by using technologies and business models such as cloud computing, outsourcing and offshore. Most IT departments today are fighting to sustain and operate their „legacy“, and therefore only have limited resources for innovations. They suffer under the complexity of their own IT landscape, which has evolved over the course of the years as a result of modifications, extensions and integration measures. Most systems were also developed to support existing organization units. New IT must be „lean IT“, i.e. comprise simple, efficient, suitable processes and organization forms.