Last week I traveled to Seoul to present the last paper of my dissertation at the International Conference on Information Systems (ICIS). The title of my research paper is “Disentangling the Fuzzy Front End of Digital Transformation” and me an my co-author Andrea Back analyzed typical activities in the fuzzy front end of digital transformation.
When confronted with the question on how to handle digital transformation or how to tackle the impact of digitization on your own business, many consultants and researchers recommend to start with a digital (transformation) strategy, so with a structured and systematic approach. However, in many organizations the beginning of a digital transformation is neither structured nor systematic, but starts in different parts of the organization, with different activities. Some organization focus on introducing new digital technologies, others on the improvement of their digital communication, and others introduce methodologies like Design Thinking in order to come up with new ideas and business models for their future value proposition.
In our research we analyzed the activities in the beginning of digital transformation in eleven cases. We were particularly interested in the first activities that get the ball rolling in these organizations, since this also tells us a lot about the mindset that companies approach digitization with. We identified the following five approaches to digital transformation:
Bottom-up: This is often found in larger organizations where different digitization initiatives start to grow in different business divisions and only later get consolidated into an overall program.
Centralized: Digitial transformation is initiated by the top management or another central point in the organization. This is a structured and systematic approach to transformation where all activities follow a strategic plan and often the CEO drives digitization activities.
IT-centered: Digital transformation is mainly perceived as task of the IT department and organizations start with streamlining and simplifying their processes as well as updating their IT infrastructure before implementing modern digital technologies. In these companies, often the CIO is responsible for driving the digital transformation.
Channel-centered: Digital transformation is often driven by the Chief Marketing Officer or by the sales department and the first activities relate to digital channels. In these organizations digitization is strongly impacted by changed user behavior.
Innovation-centered: These organizations think of digital transformation as fundamental change to their business model and use innovation labs or ideation teams to come up with new ideas for innovative digital business models.