Summary Digital Organization 3rd bachelor TEW

DIGITAL ORGANISATION
THEORY LECTURES
INTRODUCTION TO THE COURSE

WHAT IS A DIGITAL ORGANISATION?


DIGITAL ORGANIZATION (PART 1)

A digital organization implements information systems

Information technologies that we will discuss in the course
 Enterprise Applications (ERP, CRM, SCM)
 E-commerce and M-commerce
 Collaboration systems
 Business Intelligence and Analytics
 Knowledge Management Systems (KMS)
 Cyber Security
 Emerging digital solutions (Artificial Intelligence, Cloud, Augmented and Virtual
Reality)

Successful technology implementation requires more than buying and installing software
 Ex: “Available on app store”, “Download from windows store”, “Get It on Google
Play”, …

The availability of information technology does not guarantee the (correct) usage of this
technology  a lot of companies buy expensive technology but don’t use it, just like
some people have apps on their phone that they never use  investment that you make
in that technology has no use anymore

Companies buy expensive software packages without asking their clients to work with
this software

Building digital organizations requires more than the mere implementation of information
technology!!

TECHNOLOGY IS ONLY ONE PIECE OF THE PUZZLE

Digitizing organizations is an architectural exercise with following building blocks
 Technology
o These are the components that you need to construct a building for
example
 Organizational dimension of information systems
o We need to train the people how to use all this information
 Management
o It’s all about giving direction

Ex: what do you need when building a building  can be divided in the 3 categories from
above
Technology Organizational Management
dimension

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,  Money  Workers  Management
 Materials  Training  Architects
 Machinery  Instructions  Plan
 Software  Engineers
Just implementing information systems and technology alone does not deliver a
competitive advantage

DIGITAL ORGANIZATION (PART 2)

A digital organization implements information systems to realize its strategic objectives in
order to achieve a competitive advantage

Strategies for a competitive advantage
1. Lowest cost
 Ex: Aldi, Ikea, Ryanair, Colruyt
 Why would these companies invest in technology?  because they want
technology to help them be the company with the lowest cost in their
sector
 Ex: Ryanair has an application that helps them save costs, because if you
have an issue instead of calling to Ryanair and having an employee help
you, you can now go to the app and do it yourself
2. Product leadership
 Ex: Apple, Tesla
 These companies want to have the best products (quality, innovation, …) 
they invest in technology because it helps them to produce the best
products
 Ex: Tesla has an application that is filled with nice features for your car 
it’s part of the product which makes the product more innovative
3. Customer and supplier intimacy
 Ex: TikTok, Netflix
 They want to get to know you as a consumer to create a relationship with
them
 Ex: Netflix wants to know what you like, what you don’t like because than
they can recommend you new series, films, …

Give these companies €1 million and they will all spend it differently. If we want to
digitize organizations, we need to know their strategic objectives (the link between
technology and strategy)

ROLE OF INFORMATION SYSTEMS

 Supporting the current course
o Technology is primarily seen to support in achieving pre-defined strategic
objectives
o Supporting the current path
o Emphasis is on optimization and automation: doing better at what you are
doing already
o Technology is seen as a cost center
 Driver for fundamental change
o Technology is seen as a driver for strategic change
o Instead of supporting the current path, technology is a driver to reshape
the path itself
o Emphasis is on innovation and transformation


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, o Technology is seen as source of competitive advantage
o Ex: Netflix used to be a DVD renter where they shipped DVD’s to your
house  when streaming technology became more popular, they
transformed the purpose of their organization and became a streaming
service  they didn’t use new technology to improve what they were
doing, they used technology to transform their business model
 Source of new companies and industries
o Ex: Cambio is a carsharing platform, you have an application where you
can rent a car. This application can have a disruptive impact, if for example
in the future 80% of the population is using this app, it will have a positive
impact on the environment but if you are in the car sales business this will
affect their companies negatively. Nobody will buy cars anymore, nobody
will go to a carwash anymore, nobody will need a garage, …

Disruptive impact of new industries and business models
 Eamplex: Banks & bank clerks, Translators, Cashiers & stores, Truck drivers &
driving schools, Owning a car?, Professors?
 Example: Kodak missed the digital transformation after actually starting it  the
company didn’t see the disruption of this technological innovation and went
bankrupt

DIGITAL ORGANIZATION (PART 3)

A digital organization implements information systems to realize its strategic objectives in
order to achieve a competitive advantage and create stakeholder value

TRIPLE P

The Triple Bottom Line framework goas beyond traditional measures of profit (bottom
line) and additionally includes environmental and societal dimensions to measure
investment results in a more comprehensive manner
1. Profit
o Maximizing profits for shareholders
2. Planet
o Creating value for all stakeholders, highlighting a firm’s societal impact and
commitment to people (including customers, employees and community
members)
3. People
o Positive impact on the planet

DIGITAL ORGANIZATION (PART 4)

A digital organization implements information systems to realize its strategic
objectives in order to achieve a competitive advantage and create stakeholder
value in a rapidly changing environment

If you want to be a digital organization you constantly have to think about new
technologies and how for example competitors use these technologies
In today’s fast-paced technological landscape, organizations must continuously monitor
technological innovations and their impact on
 Their own organization



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, o What are the opportunities in supporting our current strategy or enabling
new strategies
 Competitors
o How do our competitors adopt these innovations and what risks does this
bring to our organization
 Customers
o How do customer requirements and behavior evolve (ex: availability)
 Society
o What does society expect from technological innovation (ex: sustainability)
 Government
o What about evolutions in legislations (ex: AI act)




BUSINESS AND IT STRATEGY

STRATEGIC BUSINESS OBJECTIVES OF INFORMATION SYSTEMS

There are five strategic business objectives for which firms invest heavily in
information systems

1. OPERATIONAL EXCELLENCE

Companies that excel in this discipline are known for their reliable, efficient,
and low-cost products or services.

Deliver products and services at lowest-cost through improving operational efficiency and
increasing productivity by automating routine tasks and streamlining processes.

Improved efficiency results in higher profits.

Information systems and technologies help improve efficiency and productivity

They invest in IT to make their processes more reliable and efficient to reduces the cost
in their processes

Examples: Ryanair, IKEA, Colruyt

2. PRODUCT LEADERSHIP

Companies that excel in this discipline are known for their cutting-edge
technology, superior quality, and high value-added products or services.

Creating innovative and high-quality products or services that set the company apart
from its competitors, pushing the boundaries of performance, and getting them to the
market quickly.

Information systems and technologies enable firms to create superior/innovative
products, services.

Examples: Tesla, Spotify, Uber, Apple watch …



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