Digital Organization
Introduction
A digital organization implements information systems and technologies to realize its strategic
objectives in order to achieve a competitive advantage and create stakeholder value in a rapidly
changing environment.
It’s no longer only important to look at the shareholders but also the stakeholders. Companies shouldn’t
only look at profitability but also the environment.
Examples of information systems and technologies:
Global e-business
E-commerce
Enterprise Applications (ERP, CRM, SCM)
Knowledge Management Systems
Emerging digital solutions (AI, Cloud, Augmented and Virtual Reality)
Cybersecurity
Business Intelligence and Analytics
Strategies for a competitive advantage:
Lowest cost strategy:
Ryan air is a good example for this strategy. They invest in their app, less questions, less personnel costs.
The app makes sure that the customer can do as much as possible on their own from home. This leads to
lower personnel costs. This makes for an overall lower cost and lower prices.
Differentiated product:
Tesla. With this strategy, the idea is to create a product that’s different from any other existing products.
Tesla for example, focusses a lot on the development of their product. They’re constantly trying to
develop applications other than their main product.
Market Niche:
This strategy is for small niche markets. It includes products with a very specific purpose like Brauzz. They
offer environmentally friendly laundry sheets. Niche products are difficult to advertise. Because they’re
so specific it isn’t east to attract new customers. You have to reach a very specific audience.
1
,Customer and supplier intimacy:
The key word here is relationship. Netflix by example uses this strategy, they do this by collecting as
much data as possible about you. They want to get to know their clients so they can make specific
recommendations. Investing in AI and Big Data is very important here.
In all 4 of these categories, technology is being used to create an advantage.
The role of an information system: Company is a boat going towards a destination(goal)
Supporting the current course
Driver for fundamental change of the current course ex: Netflix radically changed their
ways(shipping DVD) they used technology to change( video streaming)
Constantly monitoring the state of technology. Environmental factors
are important when making choices and defining a strategy. Take into
account that environments are rapidly changing. The two are
constantly influencing one another.
Currently the 3 biggest factors are: sustainability, resilience and customer expectations.
Sustainability: Industrial manufacturing as we know it is a problem. First movements were mainly
greenwashing. Right now this is something necessary. Companies are forced to look at production,
energy ... In another way. Chances are that the government will intervene ex. Legislation. Companies
need to start thinking about a strategy for the production and how technology can help
Limits of the planet
Emissions
Energy
Water
Circularity
Human-centric
Wellbeing (safety, ergonomics…)
Empowerment
Skilled: When using technology you have to take in account that you will need certain
skills
War for talent: companies are trying to attract the right people
The question is: are you going to change or stay on the same course?
2
,Resilience:
The last couple of years there have been a few crisis’ in our lives. Think about Covid, the Ukraine war,
climate change and all the supply chain disruptions.
Throughout the years the idea has been that companies must outsource their production because it is
more efficient and it creates higher margins and lower costs. But the recent shocks have created certain
issues in the supply chains. The question is, do we anticipate any future shocks or do we keep the same
course? Even here technology can help!
Customer expectation:
Consumer behavior is constantly changing. We want more transparency, where how and who produced
them. Personalization, is possible with a lot of products ‘should we allow the possibility of
personalization?’ We don’t just by product but we buy experiences, we want the buying to be easy and
accessible.
The classic idea of a company has changed. The question is will all jobs continue to exist, or will
technology take over these functions.
Think about:
Banks and clerks—bank apps and bitcoin
Translators—deepl or google translate
Cashiers and stores—delivery and self-checkout
Owning a car—poppy or Cambio
An example of a company that missed the opportunity. Kodak started the initial evolution but then didn’t
take future changes into account. They didn’t look at their environment and eventually went bankrupt.
Technology is a key piece in the puzzle but isn’t the only one. Digitizing organizations is an architectural
exercise with following building blocks:
Management
Organization
Technology
Implementing information systems and technology alone does not deliver a competitive advantage.
There is no such thing anymore as a non-digital organization: Non-profit sector, Public sector, Start-ups,
Established firms
Business-IT fusion: everyone digital
From purchasing to production and sales
From production operator to CEO
3
, The 4 industrial revolutions:
1st: Steam power and mechanization
Changed the way of working and the kind of jobs
Where you live, what you eat and where you work
2nd: electrical energy, mass production
Cost of a lot of products decreased
Higher accessibility
3th: automation, computers and electronics
Factories changed
Communicating with other countries got easier
Start of outsourcing
Robots
4th: cyber-physical systems, IoT networks
Sharing economy
This is what the organizations are doing now
A lot of them are still stuck in the third
5th ?: The transition to a sustainable, human-centric and resilient European industry”
(European Commission)
4
Introduction
A digital organization implements information systems and technologies to realize its strategic
objectives in order to achieve a competitive advantage and create stakeholder value in a rapidly
changing environment.
It’s no longer only important to look at the shareholders but also the stakeholders. Companies shouldn’t
only look at profitability but also the environment.
Examples of information systems and technologies:
Global e-business
E-commerce
Enterprise Applications (ERP, CRM, SCM)
Knowledge Management Systems
Emerging digital solutions (AI, Cloud, Augmented and Virtual Reality)
Cybersecurity
Business Intelligence and Analytics
Strategies for a competitive advantage:
Lowest cost strategy:
Ryan air is a good example for this strategy. They invest in their app, less questions, less personnel costs.
The app makes sure that the customer can do as much as possible on their own from home. This leads to
lower personnel costs. This makes for an overall lower cost and lower prices.
Differentiated product:
Tesla. With this strategy, the idea is to create a product that’s different from any other existing products.
Tesla for example, focusses a lot on the development of their product. They’re constantly trying to
develop applications other than their main product.
Market Niche:
This strategy is for small niche markets. It includes products with a very specific purpose like Brauzz. They
offer environmentally friendly laundry sheets. Niche products are difficult to advertise. Because they’re
so specific it isn’t east to attract new customers. You have to reach a very specific audience.
1
,Customer and supplier intimacy:
The key word here is relationship. Netflix by example uses this strategy, they do this by collecting as
much data as possible about you. They want to get to know their clients so they can make specific
recommendations. Investing in AI and Big Data is very important here.
In all 4 of these categories, technology is being used to create an advantage.
The role of an information system: Company is a boat going towards a destination(goal)
Supporting the current course
Driver for fundamental change of the current course ex: Netflix radically changed their
ways(shipping DVD) they used technology to change( video streaming)
Constantly monitoring the state of technology. Environmental factors
are important when making choices and defining a strategy. Take into
account that environments are rapidly changing. The two are
constantly influencing one another.
Currently the 3 biggest factors are: sustainability, resilience and customer expectations.
Sustainability: Industrial manufacturing as we know it is a problem. First movements were mainly
greenwashing. Right now this is something necessary. Companies are forced to look at production,
energy ... In another way. Chances are that the government will intervene ex. Legislation. Companies
need to start thinking about a strategy for the production and how technology can help
Limits of the planet
Emissions
Energy
Water
Circularity
Human-centric
Wellbeing (safety, ergonomics…)
Empowerment
Skilled: When using technology you have to take in account that you will need certain
skills
War for talent: companies are trying to attract the right people
The question is: are you going to change or stay on the same course?
2
,Resilience:
The last couple of years there have been a few crisis’ in our lives. Think about Covid, the Ukraine war,
climate change and all the supply chain disruptions.
Throughout the years the idea has been that companies must outsource their production because it is
more efficient and it creates higher margins and lower costs. But the recent shocks have created certain
issues in the supply chains. The question is, do we anticipate any future shocks or do we keep the same
course? Even here technology can help!
Customer expectation:
Consumer behavior is constantly changing. We want more transparency, where how and who produced
them. Personalization, is possible with a lot of products ‘should we allow the possibility of
personalization?’ We don’t just by product but we buy experiences, we want the buying to be easy and
accessible.
The classic idea of a company has changed. The question is will all jobs continue to exist, or will
technology take over these functions.
Think about:
Banks and clerks—bank apps and bitcoin
Translators—deepl or google translate
Cashiers and stores—delivery and self-checkout
Owning a car—poppy or Cambio
An example of a company that missed the opportunity. Kodak started the initial evolution but then didn’t
take future changes into account. They didn’t look at their environment and eventually went bankrupt.
Technology is a key piece in the puzzle but isn’t the only one. Digitizing organizations is an architectural
exercise with following building blocks:
Management
Organization
Technology
Implementing information systems and technology alone does not deliver a competitive advantage.
There is no such thing anymore as a non-digital organization: Non-profit sector, Public sector, Start-ups,
Established firms
Business-IT fusion: everyone digital
From purchasing to production and sales
From production operator to CEO
3
, The 4 industrial revolutions:
1st: Steam power and mechanization
Changed the way of working and the kind of jobs
Where you live, what you eat and where you work
2nd: electrical energy, mass production
Cost of a lot of products decreased
Higher accessibility
3th: automation, computers and electronics
Factories changed
Communicating with other countries got easier
Start of outsourcing
Robots
4th: cyber-physical systems, IoT networks
Sharing economy
This is what the organizations are doing now
A lot of them are still stuck in the third
5th ?: The transition to a sustainable, human-centric and resilient European industry”
(European Commission)
4
