CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. To help managers address this.

Slides:



Advertisements
Similar presentations
3.1 © 2007 by Prentice Hall 3 Chapter Information Systems, Organizations, and Strategy.
Advertisements

How well is the Life Insurance Industry keeping pace with rapidly changing technology? International Insurance Society 23 June 2014 London.
Strategic Management & Strategic Competitiveness
Planning and Strategic Management
Managing the Information Technology Resource Course Introduction.
CORPORATE RISK MANAGEMENT & INSURANCE BY R P BLAH D.G.M. INCHARGE THE ORIENTAL INSURANCE COMPANY LIMITED REGIONAL OFFICE BHUBANESWAR.
Essentials of Management Chapter 4
Sapient Insurance Partners. Overview & Services We have almost four decades of combined experience in the property & casualty insurance and reinsurance.
MIS Information Systems in Organizations Dave Salisbury ( )
Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Planning and Strategic Management Chapter 04.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
@ ?!.
Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues Chapter 6.
BUSINESS DRIVEN TECHNOLOGY
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 1-1 BUSINESS DRIVEN TECHNOLOGY UNIT 1: Achieving Business Success Through.
RCA Consulting Thoughts on Post Merger Integration.
MARKETING MANAGEMENT 12 th edition 2 Developing Marketing Strategies and Plans KotlerKeller.
Copyright © 2008 by Robert B. Carton Value Systems, Value Chains and Value-Based Management The Essence of Organizational Performance Is the Creation of.
 Allocating resources among the different businesses of a firm.  Transferring resources from one set of business to other and  Managing.
Sapient Insurance Partners. Overview & Services We have almost four decades of combined experience in the property & casualty insurance and reinsurance.
Aligning Organizational Goals and Operations Strategy Oct , 2002.
Five Threads of Social Entrepreneurship Dr Ira Kaufman Lynchburg College School of Business and Economics Social Entrepreneurship Course Spring 2013.
A Framework for Marketing Management International Edition 2 Developing Marketing Strategies and Plans 1.
Chapter 1 Market-Oriented Perspectives Underlie Successful Corporate, Business, and Marketing Strategies.
Today’s managers & leaders are challenged unlike any of the past generations in their roles.
Strategy Formulation and Implementation
Highly Preliminary Building a sustainable health and care system for the people of Sussex and East Surrey.
Chief Digital Officers (CDOs) are establishing themselves as new executives at the top management level of companies that go through a digital transformation.
Strategy and Sales Program Planning
Organizational Behavior, 9/E Schermerhorn, Hunt, and Osborn
Once the Deal is Done: Making Mergers Work.
15 Summary Acquisitions and Global Expansion
Challenges and opportunities for the CFO
Information Systems, Organizations, and Strategy
International Strategic Management
Core Competencies Training for Supervisors
DIRECTION SETTING: VISIONS, MISSIONS, VALUES, AND OBJECTIVES
Chapter 8 STRATEGIC MANAGEMENT © Prentice Hall,
MANAGEMENT RICHARD L. DAFT.
LO1 - Analyse the impact and influence which the macro environment has on an organization and its business strategies 1. P1 Applying appropriate frameworks,
Learning Unit 3.3 Levels of Strategic Management 5 May 2011
SCM-655: Global Supply Operations Strategy
E-Commerce Strategy, Implementation
Knowledge Objectives Understand the 4 strategies for foreign expansion
Master Budget and Responsibility Accounting
In traditional IT outsourcing and multisourcing arrangements, clients isolate vendor tasks, resulting in modular sourcing structures. But this approach.
What Is Strategic Management?
Strategy and Human Resources Planning
Strategy Formulation and Execution
Strategy formulation and implementation
Information Systems, Organizations, and Strategy
Advanced Management Control and Sustainable Development
Global Strategy: Course Outline
Advanced Management Control and Sustainable Development
Information Systems, Organizations, and Strategy
International Strategy
Organizational Transformation
Building Professional Services
Session 20 Implementing Strategy Through Restructuring and Reengineering the Company’s Structure.
What is Strategy and Why is it Important?
Chapter 8 STRATEGIC MANAGEMENT © Prentice Hall,
MAZARS’ CONSULTING PRACTICE Helping your Business Venture Further
Chapter 12 Strategic Planning.
The Global Environment
INTERNATIONAL COMPETITIVE STRATEGY
KEY INITIATIVE Shared Services Function Management
KEY INITIATIVE Finance Function Management
Strategic Leadership & Organisational culture
Information Systems, Organizations, and Strategy
I4.0 in Action The importance of people and culture in the Industry 4.0 transformation journey Industry 4.0 Industry 3.0 Industry 2.0 Industry 1.0 Cyber.
Presentation transcript:

CIOs and other senior executives face the challenge of how to handle the opportunities and risks of digital transformation. To help managers address this challenge more systematically, we describe how three German media companies successfully approached digital transformation. Based on their experiences, we provide a list of 11 strategic questions and possible answers managers can use as guidelines when formulating a digital transformation strategy

Agenda Digital Transformation is a High-Priority Management Challenge The Distinctive Nature of Digital Transformation Strategy The Three Case Companies Guidelines for Formulating a Digital Transformation Strategy

Digital Transformation is a High-Priority Management Challenge 1/3 Integrating and exploiting new digital technologies is one of the biggest challenges that companies currently face. No sector or organization is immune to the effects of digital transformation. The question is no longer when companies need to make digital transformation a strategic priority—this tipping point has passed—but how to embrace it and use it as a competitive advantage.

Digital Transformation is a High-Priority Management Challenge 2/3 Faced with the digital transformation challenge and the need to remain competitive in their industries, business leaders must formulate and execute new strategies There are many recent examples of organizations that have been unable to keep pace with the new digital reality like Blockbuster and Washington Post. Digital transformation is a complex issue that affects many or all segments within a company.

Digital Transformation is a High-Priority Management Challenge 3/3 Managers have to simultaneously balance the exploration and exploitation of their firms’ resources to achieve organizational agility—a necessary condition for the successful transformation of their businesses. Digital Transformation Framework (DTF) identifies the four key dimensions of every digital transformation endeavor: The use of technologies Changes in value creation Structural changes The financial aspects

Agenda Digital Transformation is a High-Priority Management Challenge The Distinctive Nature of Digital Transformation Strategy The Three Case Companies Guidelines for Formulating a Digital Transformation Strategy

The Distinctive Nature of Digital Transformation Strategy 1/3 The purpose of the journey toward digital transformation is to reap the benefits of digital technologies, such as productivity improvements, cost reductions and innovation. A clear strategy for deploying and exploiting digital technologies is crucial for future business success. There is, however, disagreement on the relationship between digital strategy and business and IT strategies. Some argue that a digital strategy should be formulated and implemented as a part of a firm’s IT strategy. Others take the view that such an important and challenging strategic issue as digital transformation demands a standalone strategy.

The Distinctive Nature of Digital Transformation Strategy 2/3 The necessary coordination and alignment of a firm’s many strategies in the light of digital transformation has led some researchers to argue for a digital business strategy that combines IT and business strategy. On the other hand, a digital transformation strategy signposts the way toward digital transformation and guides managers through the transformation process resulting from the integration and use of digital technologies. A digital transformation strategy impacts a company more comprehensively than an IT strategy and addresses potential effects on interactions across company borders with clients, competitors and suppliers. Thus, we argue that firms need a standalone digital transformation strategy

The Distinctive Nature of Digital Transformation Strategy 3/3 To ensure they capture the business value of digital transformation, companies should carefully formulate a digital transformation strategy that coordinates the many independent threads of digital transformation and helps them navigate the complexity and ambiguity of identifying their own digital “sweet spots.” To illustrate the concepts of formulating and executing a digital transformation strategy, we describe how three German media companies have approached digital transformation.

Agenda Digital Transformation is a High-Priority Management Challenge The Distinctive Nature of Digital Transformation Strategy The Three Case Companies Guidelines for Formulating a Digital Transformation Strategy

The Three Case Companies 1/2 ProSiebenSat.1 Media SE (referred to as “P7S1”) A large TV broadcaster with a turnover of €2.6 billion ($2.95 billion) and more than 3,500 employees. It is one of the leading TV enterprises in Europe. As of April 2016, €1 = $1.13 Mittelbayerische Verlag AG (Mittelbayerische) A small print publisher based in Regensburg, Germany. Its main product is the regional daily newspaper Mittelbayerische Zeitung, which has a strong focus on regional content and offerings. Ravensburger AG A mid-sized games publisher (founded in 1883) that is headquartered in Ravensburg, Germany. In addition to the “leisure and promotion service” division and a fairly new “digital products” division, the company has two main divisions: “games, puzzles and arts/crafts” (€286 million turnover) and “children’s and youth books” (€9 million turnover).

The Three Case Companies 2/2 Each of these companies has, within the last decade, systematically approached digital transformation and has achieved success in its efforts. At present, over 20% of P7S1’s revenues derive from digital business models. At Ravensburger, hybrid products that enrich traditional analog or physical products with digital content have successfully stabilized its core businesses: board games and print publishing. The CEO of Mittelbayerische claims that it owes its leading market position to the decision to actively embrace digital technologies. However, digital transformation in each company is ongoing and will likely occupy them over the next few years.

Overview of the Three Case Studies [1] P7S1 originated from the former Kirch Group, which was founded in 1955. Overview of the Three Case Studies P7S1 Mittelbayerische Ravensburger Core business TV broadcaster News publisher Board games and print publisher Size 4,200 employees €2.9 billion (2014) 500 employees 110,000 units per day (2014) 1,600 employees €359 million (2013) Headquarters Munich (Germany) Regensburg (Germany) Ravensburg (Germany) Founded 2000 1945 1883 Market focus Europe Regional Europe, U.S. Digital transformation overview From linear TV broadcasting to video-on-demand and online-gaming, and mergers & acquisitions From print to digital publishing From analog to digitally enhanced products (books, puzzles and games) Start of digital transformation 2011 2010 2009 Digital transformation success 20% of revenues through digital business Defense of market leadership through digital enrichment of analog core product Digitally enriched products successfully stabilized core business Organizational scope of digital transformation Company-wide Mostly products Products and processes

Agenda Digital Transformation is a High-Priority Management Challenge The Distinctive Nature of Digital Transformation Strategy The Three Case Companies Guidelines for Formulating a Digital Transformation Strategy

Guidelines for Formulating a Digital Transformation Strategy We have derived guidelines for managers in the form of the strategic questions they have to address when embarking on digital transformation. We have grouped the questions along the four dimensions of the Digital Transformation Framework described earlier: use of technologies, changes in value creation, structural changes and financial aspects.

Strategic Questions Use of Technologies How significant is your firm’s IT to achieving strategic goals? How ambitious is your firm’s approach to new digital technologies? Changes in Value Creation Dimension How “digital” is you interface to the customer? How will you create revenue from future business operations? What will your future business scope be? Structural Changes Dimension Who is in charge of the digital transformation endeavor? Do you plan to integrate new operations into existing structures or create separate entities? What types of operational changes do you expect? Do you need to acquire new competencies? If so, how do you plan to acquire them? Financial Aspects Dimension How strong is the financial pressure on your current core business? How will you finance the digital transformation endeavor?

Key Decisions