2017-20 Designing for Digital

Summary

In this keynote, Dr. Jeanne Ross, a prominent scholar from MIT's Center for Information Systems Research, discusses the complexities of digital transformation. She highlights four critical decisions companies must make: defining a clear vision for improving customer lives, choosing a strategic driver (customer engagement or digitized solutions), identifying key digital capabilities, and architecting the business for digital success. Using examples from companies like Schindler, Phillips, and Lego, she illustrates how these decisions shape the future of organizations in the digital economy. The talk emphasizes the challenges and strategic focus required for successful transformation.

Takeaways

• 😀 Digital transformation is about redefining a company's value proposition and redesigning the company to deliver it, not just about technology.
• 😀 Successful companies transforming digitally focus on creating a clear and enacted vision for improving customer lives, which is debated and integrated at all levels.
• 😀 Companies must decide between two strategic drivers: customer engagement or digitized solutions, each requiring a different approach to integration and customer experience.
• 😀 Customer engagement emphasizes a seamless, personalized experience across all touchpoints, while digitized solutions focus on proactively offering integrated, data-enriched services.
• 😀 Digital transformation requires building a strong operational backbone, which includes secure and efficient transaction processing and access to reliable data.
• 😀 Simply having an operational backbone is not enough to be a digital company. Companies must also build a second platform: a digital services platform to support rapid innovation and service delivery.
• 😀 The challenge of digital transformation is not just the implementation of technology but the tough decisions on which digital capabilities to pursue to align with the company vision.
• 😀 To succeed in digital transformation, companies must architect their business differently, shifting from traditional verticals to a more integrated and flexible digital services model.
• 😀 Digital services leaders should be assigned accountability for specific digital services, creating a dynamic, accountable structure that fosters innovation and integration.
• 😀 Digital transformation is a long-term process that requires careful incremental change and continuous learning to ensure the organization can adapt to rapidly evolving demands.

Q & A

What is the central focus of digital transformation, according to Dr. Genie Ross?

Dr. Genie Ross emphasizes that digital transformation is not about technology, but about redefining a company's value proposition and redesigning the company to deliver that value.

What are the four critical decisions identified by Dr. Ross for successful digital transformation?

The four critical decisions are: 1) Defining a vision for improving the lives of customers, 2) Choosing a strategic driver (customer engagement or digitized solutions), 3) Identifying critical digital capabilities to pursue, and 4) Architecting the business to support digital services.

Why is a clear vision of improving customers' lives crucial for a company’s digital transformation?

A clear vision is crucial because it provides direction and purpose. It shapes the company’s innovation efforts, guides decision-making across all levels, and ensures that every employee understands how they contribute to the company’s goals.

What is the key difference between customer engagement and digitized solutions in the context of digital transformation?

Customer engagement focuses on providing a seamless, personalized experience across all customer touchpoints, while digitized solutions involve creating integrated offerings that proactively deliver value through information and innovative services.

How does Dr. Ross suggest companies should approach the decision between customer engagement and digitized solutions?

Dr. Ross advises companies to choose one approach to drive their digital transformation strategy. Trying to pursue both simultaneously can create conflicting priorities and hinder success.

What challenge did Lego face in its digital transformation, and how did it respond?

Lego initially focused on building an operational backbone but realized it wasn’t enough to become a true digital company. As a result, they built a digital services platform to integrate new technologies, such as cloud, IoT, and AI, to support innovation and customer offerings.

What is an operational backbone, and why is it considered table stakes in the digital economy?

An operational backbone refers to the foundational systems and processes, such as ERP, that support smooth and reliable operations. It is considered table stakes because it’s a basic requirement for competing in the digital economy, but it’s not sufficient on its own for digital transformation.

What does Dr. Ross mean by ‘digital services platforms’?

A digital services platform is a set of integrated technologies, such as cloud, mobility, IoT, and AI, that allows companies to quickly develop, integrate, and deliver digital solutions and services to customers and partners.

What is the importance of business architecture in digital transformation?

Business architecture is crucial because traditional, siloed organizational structures are not effective in the digital economy. Companies must empower employees to manage digital services as living assets and create integrated systems to deliver value across all touchpoints.

What example does Dr. Ross give of a company that has embraced service leaders for digital transformation?

Dr. Ross gives the example of BNY Mellon, where service leaders in the IT department are responsible for individual digital services, ensuring their development and alignment with the company’s strategic goals.