The Digital Enterprise and Changing Business Models
Digital technologies have penetrated every aspect of consumer life and modern business. The number of connected devices and sensors continues on its exponential growth path, generating data that can be analyzed and combined in ways never before possible. The pace of change is limited only by how quickly we can put the new technology to use. Digitally-enabled customers have different expectations of their vendors in both B2B and B2C environments, and digitally-native companies are creating entirely new business models to meet those expectations.
Members of the Americas Chapters of the Roundtable on Digital Strategies convened at Tenaris’ facilities in Houston for a day-long discussion of what it means to be a “digital enterprise,” what are the key elements of becoming one, and the challenges for established companies in making that transformation. Participants in the session included CIOs and digital business leaders from the Bank of Queensland, Chevron, Eaton Corporation, Eastman Chemical Company, Levi Strauss, Sysco, Tenaris, and Tetra Pak, along with Executive Fellows and the Directors of the Center for Digital Strategies of the Tuck School of Business at Dartmouth College.
The Roundtable on Digital Strategies meets four times a year to discuss a specific business issue or theme. In focused discussions that cut across organizations and industries, participants from noncompeting member corporations examine meaningful business issues and topical challenges that they have in common. They come away from the day-long experience with new ideas and new approaches to specific challenges—the kind of creative assessment that arises only from diverse perspectives.
Key Insights Discussed in this Article:
- The core objective of the digital enterprise is to empower individuals (or groups) to make better decisions faster. The speed of business has become too fast to tolerate centralized, process-driven decision-making.
- Digital technologies don’t change the ends of business, but they change everything about the means. Companies need to challenge and re-think every operating process and business assumption, or risk being left behind.
- Every established enterprise faces the choice of disrupting from within, or being disrupted. Digital competitors don’t attack head-on; rather, they pick away at unexpected spots in the value chain that can turn out to be the critical links.
- Companies have to be able to tolerate experimentation without certainty of outcome. New business models, ecosystems, and organizational structures are a stage of flux and discovery, and traditional ROI thinking does not apply.
- The companies that best combine data with technology to engage customers will win. With the volume, transparency, and immediacy of data, consumers and business customers have new expectations, capabilities, and leverage.