Digital Transformation_Revamping Business - Revamping Your Business Through Digital Transformation To gain the most business benefits from todays

Digital Transformation_Revamping Business - Revamping Your...

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George Westerman Didier Bonnet Revamping Your Business Through Digital Transformation To gain the most business benefits from today’s digital technology, it pays to question key managerial assumptions. Reprint #56303
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2 MIT SLOAN MANAGEMENT REVIEW SPRING 2015 I N T E L L I G E N C E COURTESY OF VOLVO CAR CORP. There is no shortage of stories about com- panies that create amazing innovations with digital technology. By using mobile devices, social media, analytics and the cloud, savvy companies are transforming the way they do business. Most of the sto- ries feature companies that are small and young or that operate in industries such as music or high tech, where digital technol- ogy has already radically shifted the business landscape. For larger companies in more traditional industries, it’s easy to think that digital transformation can wait and that a follower strategy is a safer route than trying to be a pioneer. That kind of thinking, while tempting, is wrong. Although the software, media and tech- nology industries get a disproportionate share of the attention, those industries account for less than 10% of the U.S. economy. What about the other 90%? We studied more than 400 large companies around the world, in industries including manufacturing, hospitality and mining. We found that, in every industry we stud- ied, companies are doing exciting things with digital technology and getting im- pressive business benefits. What’s more, any organization can adopt their methods. Companies that lead in using digital technology — we call them “digital mas- ters” — differ not only in their capability but also in the clarity of their vision. They see digital not as a technology challenge but as a transformation opportunity. Rather than incrementally adjusting cur- rent practices, they search for ways to use today’s fast-moving technologies to trans- form the way they do business. For managers in traditional industries, this can be a tall order. Many assumptions about what is possible and impossible, based on experience with last century’s technologies, are no longer valid in the digital world. How do you move beyond your current mind-set to find opportuni- ties that digital technology can enable? Start by rethinking four traditional as- sumptions that affect how you relate to your customers, how you run your opera- tions, how you organize and even how you think about your business model. This as- sumption-busting exercise will help you to think differently about what is possible. ASSUMPTION 1: Our customers really value the human touch. Humans have their place in customer interactions. But not all in- teractions with humans are actually valuable to customers. At points where people simply serve as a customer interface or a vehicle for customizing services, customers may find it more convenient to interact with machines.
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  • Fall '15
  • Dr.DeenDayalUpa
  • Economics, MIT Sloan School of Management, Massachusetts Institute of Technology, Sloan Management Review, MIT Sloan Management Review, mit sloan management

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