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The road to the digital corporation

A report from the University of Hamburg and Sopra Steria Consulting identifies the challenges of digitalisation and makes recommendations

Companies in almost every industry face the challenge of increasing digitalisation. Three central aspects in particular are the key: the establishment of digital channels to customers and partners, the development of digital product offerings, and digital transformation. These are the conclusions of a study on Digital Excellence conducted by Sopra Steria Consulting and the University of Hamburg. The report describes Digital Excellence in terms of a total of ten disciplines in Digital Excellence, together representing the breadth of the transformation that is needed.

Digital channels to customers and partners

As a rule, corporate IT and its projects are focussed inwards, according to the report. But in the digital age, companies also need to build outward-facing IT. There is no way around the need to intensively integrate customers and partners in internal processes. Various requirements must be fulfilled here: a standardisation of processes and systems is essential for business on this scale; on the other hand, customers and partners expect more service, for example possibilities to adjust products and services and more interactivity; and above all, cooperation with partners is becoming more important – along with the ability to digitally integrate the operative aspects of this cooperation

Data-driven agility

An outward focus can, however, only succeed when it is joined with high levels of agility in terms of developing products for the digital world. The report shows that companies with a better awareness of Digital Excellence will be faster and more systematic in learning from data. The challenges here relate to two disciplines. On the one hand, companies must gather data from various sources, evaluating it and incorporating it in decision-making processes, thereby creating direct added value for customers.

Developing products and services

On the other hand, the increasing digitalisation means that the agility of the entire enterprise is on trial. Fast, responsive implementation of new requirements and ideas is essential. According to the report, the key is in the optimal combination of both disciplines, resulting in the data-driven enhancement of products and services. The corporate leadership must, however, be willing to be “lead by data”, which in turn changes the conventional understanding of decision-making processes. Traditional corporations still have a long way to go, according to the report’s authors.

A matter for top management

The scale of the decisions that have to be taken and of the changes that have to be implemented means that this has to be a matter for top management. “The leadership of the corporation must initiate and guide the transformation, leading by example in terms of speed and agility. This transformation process can only work in top-down mode,” according to Urs M. Kraemer, CEO of Sopra Steria Consulting.

Paths to Digital Excellence

In the process of the study, the researchers identified three paths that companies adopt in their attempts to achieve Digital Excellence. The most common strategy is the comprehensive transformation of the entire enterprise: management recognises the necessity of digital transformation, and analysis and change is directed at all departments and all levels of the hierarchy.

Essential course adjustment

A less promising approach is the establishment of a digital subsidiary or fragmented digitalisation. Around 25 percent of companies surveyed in the study are taking or at least considering the option of establishing a digital subsidiary with a new mindset and approach.

These strategies can, at best, only serve as a preliminary step on the path to complete transformation. They do not represent an ideal long-term strattegy. “The essential course adjustments of today will decide whether a company remains successful five to ten years from now,” says Prof. Tilo Boehmann from the University of Hamburg.

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