Digital Organisation
1. INTRODUCTION TO DIGITAL ORGANISATIONS
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.
1.1. Information systems (IS)
Information technologies (IT)
• Enterprise Applications (ERP, CRM, SCM)
• E-commerce and M-commerce
• Collaboration systems
• Business Intelligence and Analytics
• Knowledge Management Systems (KMS)
• Cybersecurity
• Emerging digital solutions (AI, Cloud, Augmented and Virtual Reality)
Availability of information technology ≠ (correct) usage of technology
➔ Building digital organizations requires more than implementation of IT
Digitizing organizations is an architectural exercise with following building blocks:
• Technology
• Organization (marketing, security, …)
• Management (plan + planning)
➔ Implementing information systems and technology alone does not deliver a competitive
advantage ➔ we need a plan!
1.2. Strategic objectives for a competitive advantage
Why? You want to be better than your concurrent
• Relevant, now and in the future
• Money & profit
• Main goal: contribute to strategy of organization
Strategies for a competitive advantage
• Lowest cost
o Examples: Colruyt, Ryanair
• Product leadership
o Example: Tesla, Apple, Espresso
▪ Big brands with good products
• Customer and supplier intimacy
o Focus on relationship and satisfaction
o Example: Netflix
➔ Every company will invest their money in a different way
➔ Digital organization: need to know their strategic objectives
1
,Role of IS
1) Supporting the current course (succeeding the company’s goal)
o Technology to support achieving pre-defined strategic objectives (current path)
o Optimization and automation: doing better at wat you are doing already.
▪ Technology is seen as a cost center.
2) Driver for fundamental change
o Technology as driver for strategic change (reshape the path itself)
o Innovation and transformation
▪ Technology is seen as a source of competitive advantage
3) Source of new (disruptive) companies/industries
1.3. Stakeholder value
Triple P (Triple Bottom Line framework)
Goes beyond traditional measures of profit (“bottom line”), additionally includes environmental
& societal dimensions to measure investment results in a more comprehensive manner
• Profit: maximizing profits for shareholders (support strategy)
• People: creating value for all stakeholders, highlighting a firm’s societal impact and
commitment to people
• Planet: positive impact on the planet
1.4. Rapidly changing environment
In today’s fast-paced technological landscape, organizations must continuously monitor
technological innovations and their impact on:
• Own organization
o Opportunities in supporting current strategy or enabling new strategies?
• Competitors
o Innovations + risk for our organization?
• Customers
o Evolution of requirements and behavior? (f.e. availability)
• Society
o Social expectations from technological innovation? (f.e. sustainability)
• Government
o Evolutions in legislations? (f.e. AI act)
2
, 2. BUSINESS AND IT STRATEGY
Why would a company invest in IT?
1) Strategic business objectives of information systems
2) Porter’s competitive forces model
3) Disruptive innovation model
4) Value webs, synergies, core competences and network-based strategies
5) Digital transformation framework
2.1. Strategic Business Objectives of Information Systems
For which firms invest heavily in information systems (Laudon & Laudon, 2022):
Operational Excellence (efficiency)
• Known for reliable, efficient, and low-cost products or services
• Products/services at lowest cost through improving operational efficiency and increasing
productivity by automating routine tasks and streamlining processes
o Improved efficiency results in higher profits
• IS and IT help improve efficiency and productivity
• Examples: IKEA, Ryanair, Colruyt
o Reliable: lot of info and good customer service
Product Leadership
• Known for cutting-edge technology, superior quality, high value-add products/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.
• IS and IT enable firms to create superior/innovative products/services
• Examples: Netflix, Uber, Airbnb, Spotify
o Best product/quality, always a step ahead, new things
Customer Intimacy
• Known for personalized customer service, customized products, and strong customer
relationships
• Creating a deep understanding of the customer's needs and preferences, and tailoring
products or services to meet those specific needs.
o Well-served customers become repeat, loyal customers who purchase more
• IS can improve communication and collaboration with customers
o Leading to better relationships, increased loyalty, enhanced customer service
• Example: Netflix, Hotel London
Supplier Intimacy
• Seek to work closely with suppliers to improve quality, reduce costs, increase innovation.
• More engagement with suppliers = suppliers can provide vital inputs better
• IS can improve communication and collaboration with suppliers
o Leading to better relationships
• Example: Fevia
3
, Competitive Advantage
• Advantages over competitors, often results from achieving previous business objectives:
o Better performance through operational excellence
o Product leadership through new products and services
o Better response to suppliers and customers
• Industry leaders set the golden standard within their respective industries
Survival
• Businesses may need to invest in IS out of necessity; simply the cost of doing business
o Keeping up with competitors to survive
o Compliance to laws and regulations
• Example: bank
o ATM’s
o Mobile banking app
o Federal laws
Value disciplines
Strategic approaches that companies can choose to excel in, in order
to gain and sustain leadership positions in their industries
Superior customer value is achieved by:
• Becoming champion in one of the three value disciplines, even
at the expense of the other value disciplines
• Meeting industry standards in the other two value disciplines
All aspects of the organization must be aligned to support the choice of a primary discipline
➔ Culture, processes, organizational structures, management systems, technology, …
Choosing value disciplines = choosing customers
Masters of two: some companies succeed to excel at more than two (rare exceptions)
• Danger of not choosing: companies that try to be all things to all customers, often end up
as underperformers, because of confusion, conflicting priorities & wasted resources
➔ Achieving the leadership position is the first step. Maintaining the leadership position is an
ongoing challenge, requiring ongoing focus, investment, continuous improvement and agility
2.2. Porter’s competitive forces model
How to shape a strategy? Two main schools in the field of strategy:
• Positioning view (outside-in)
o Focuses on a firm's external environment and its ability to occupy a unique
position in the market ➔ importance of industry structure, competitive rivalry,
and customer needs in determining a firm's competitive advantage
o 1980s, Michael Porter
• Resource Based View RBV (inside-out)
o Firm's competitive advantage stems primarily from its unique internal resources
and capabilities, rather than external market conditions.
▪ Tangible resources: physical assets, financial resources, …
▪ Intangible: human capital, brand reputation, intellectual property,…
o 1990s, Edith Penrose & Jay Barney
4
1. INTRODUCTION TO DIGITAL ORGANISATIONS
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.
1.1. Information systems (IS)
Information technologies (IT)
• Enterprise Applications (ERP, CRM, SCM)
• E-commerce and M-commerce
• Collaboration systems
• Business Intelligence and Analytics
• Knowledge Management Systems (KMS)
• Cybersecurity
• Emerging digital solutions (AI, Cloud, Augmented and Virtual Reality)
Availability of information technology ≠ (correct) usage of technology
➔ Building digital organizations requires more than implementation of IT
Digitizing organizations is an architectural exercise with following building blocks:
• Technology
• Organization (marketing, security, …)
• Management (plan + planning)
➔ Implementing information systems and technology alone does not deliver a competitive
advantage ➔ we need a plan!
1.2. Strategic objectives for a competitive advantage
Why? You want to be better than your concurrent
• Relevant, now and in the future
• Money & profit
• Main goal: contribute to strategy of organization
Strategies for a competitive advantage
• Lowest cost
o Examples: Colruyt, Ryanair
• Product leadership
o Example: Tesla, Apple, Espresso
▪ Big brands with good products
• Customer and supplier intimacy
o Focus on relationship and satisfaction
o Example: Netflix
➔ Every company will invest their money in a different way
➔ Digital organization: need to know their strategic objectives
1
,Role of IS
1) Supporting the current course (succeeding the company’s goal)
o Technology to support achieving pre-defined strategic objectives (current path)
o Optimization and automation: doing better at wat you are doing already.
▪ Technology is seen as a cost center.
2) Driver for fundamental change
o Technology as driver for strategic change (reshape the path itself)
o Innovation and transformation
▪ Technology is seen as a source of competitive advantage
3) Source of new (disruptive) companies/industries
1.3. Stakeholder value
Triple P (Triple Bottom Line framework)
Goes beyond traditional measures of profit (“bottom line”), additionally includes environmental
& societal dimensions to measure investment results in a more comprehensive manner
• Profit: maximizing profits for shareholders (support strategy)
• People: creating value for all stakeholders, highlighting a firm’s societal impact and
commitment to people
• Planet: positive impact on the planet
1.4. Rapidly changing environment
In today’s fast-paced technological landscape, organizations must continuously monitor
technological innovations and their impact on:
• Own organization
o Opportunities in supporting current strategy or enabling new strategies?
• Competitors
o Innovations + risk for our organization?
• Customers
o Evolution of requirements and behavior? (f.e. availability)
• Society
o Social expectations from technological innovation? (f.e. sustainability)
• Government
o Evolutions in legislations? (f.e. AI act)
2
, 2. BUSINESS AND IT STRATEGY
Why would a company invest in IT?
1) Strategic business objectives of information systems
2) Porter’s competitive forces model
3) Disruptive innovation model
4) Value webs, synergies, core competences and network-based strategies
5) Digital transformation framework
2.1. Strategic Business Objectives of Information Systems
For which firms invest heavily in information systems (Laudon & Laudon, 2022):
Operational Excellence (efficiency)
• Known for reliable, efficient, and low-cost products or services
• Products/services at lowest cost through improving operational efficiency and increasing
productivity by automating routine tasks and streamlining processes
o Improved efficiency results in higher profits
• IS and IT help improve efficiency and productivity
• Examples: IKEA, Ryanair, Colruyt
o Reliable: lot of info and good customer service
Product Leadership
• Known for cutting-edge technology, superior quality, high value-add products/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.
• IS and IT enable firms to create superior/innovative products/services
• Examples: Netflix, Uber, Airbnb, Spotify
o Best product/quality, always a step ahead, new things
Customer Intimacy
• Known for personalized customer service, customized products, and strong customer
relationships
• Creating a deep understanding of the customer's needs and preferences, and tailoring
products or services to meet those specific needs.
o Well-served customers become repeat, loyal customers who purchase more
• IS can improve communication and collaboration with customers
o Leading to better relationships, increased loyalty, enhanced customer service
• Example: Netflix, Hotel London
Supplier Intimacy
• Seek to work closely with suppliers to improve quality, reduce costs, increase innovation.
• More engagement with suppliers = suppliers can provide vital inputs better
• IS can improve communication and collaboration with suppliers
o Leading to better relationships
• Example: Fevia
3
, Competitive Advantage
• Advantages over competitors, often results from achieving previous business objectives:
o Better performance through operational excellence
o Product leadership through new products and services
o Better response to suppliers and customers
• Industry leaders set the golden standard within their respective industries
Survival
• Businesses may need to invest in IS out of necessity; simply the cost of doing business
o Keeping up with competitors to survive
o Compliance to laws and regulations
• Example: bank
o ATM’s
o Mobile banking app
o Federal laws
Value disciplines
Strategic approaches that companies can choose to excel in, in order
to gain and sustain leadership positions in their industries
Superior customer value is achieved by:
• Becoming champion in one of the three value disciplines, even
at the expense of the other value disciplines
• Meeting industry standards in the other two value disciplines
All aspects of the organization must be aligned to support the choice of a primary discipline
➔ Culture, processes, organizational structures, management systems, technology, …
Choosing value disciplines = choosing customers
Masters of two: some companies succeed to excel at more than two (rare exceptions)
• Danger of not choosing: companies that try to be all things to all customers, often end up
as underperformers, because of confusion, conflicting priorities & wasted resources
➔ Achieving the leadership position is the first step. Maintaining the leadership position is an
ongoing challenge, requiring ongoing focus, investment, continuous improvement and agility
2.2. Porter’s competitive forces model
How to shape a strategy? Two main schools in the field of strategy:
• Positioning view (outside-in)
o Focuses on a firm's external environment and its ability to occupy a unique
position in the market ➔ importance of industry structure, competitive rivalry,
and customer needs in determining a firm's competitive advantage
o 1980s, Michael Porter
• Resource Based View RBV (inside-out)
o Firm's competitive advantage stems primarily from its unique internal resources
and capabilities, rather than external market conditions.
▪ Tangible resources: physical assets, financial resources, …
▪ Intangible: human capital, brand reputation, intellectual property,…
o 1990s, Edith Penrose & Jay Barney
4
