Digital innovation – How to digitize a company

Digital innovation – How to digitize a company
13.06.2018 Rainer Wiedmann
Puppe

Nowadays, the digital era found it’s way into every company. Products are advertized and sold online, processes are digitized and many companies start manufacturing products with digital Features and add digital Services to them. Often however, digital tasks are carried out at multiple places throughout the organization, in-depth digital know-how is missing and the harmonization of the digital landscape is hard.

Many companies try to buy digitally focussed companies in order to push the own digital development. Voith for example overtook 60% of Ray Sono, a digital agency for communication and interaction located 100 miles away from Voith Headquarters in order to push digital Business. The physical distance and the possible cultural clash will probably complicate the fast generation of synergies in cases like this.

Therefore, iq! advocates an organizational approach where a new digital unit in immidiate proximity to Headquarters and staffed with internal and external know-how consolidates the basis of digital success. 

How to digitize a company – process

how to digitize a company

Digital Transformation of a Company
Source: iq! Management Consulting

iq! accompanied many companies during their process of Digital Innovation within the last two decades. It is anything but easy to transform an analogue organization into a digital enterprise. Some of the key learnings iq! gained are the following:

  • A new digital entity helps accelerating digital growth. Concentrating digital know-how in a separate organizational unit enables the focus of joint efforts on digital advancement.
  • Transfer internal Kkow-how to digital entity. Attracting digital excellence from the outside is important. However, it is equally crucial to mix it with internal staff who knows the company and possesses an internal network.
  • Physical proximity to headquarters is beneficial. Many large companies with headquarters in provincial backwarter tend to buy or found their digital entities in buzzling cities like Berlin or San Francisco. It is difficult to lure digital expertise into the backwoods on the one side. However, it is also very challenging to change the „old“ organization and close the cultural gap if both entities co-exist far away from each other.

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  • Cover the digital basics first. Developing fancy digital products with Internet of Things features before solidifying Digital Marketing, Sales or Customer Service will backfire at some point. Additionally, digital product innovation is costly and a successful Digital Commercialization is an important short-term Sales lever. Read more about this topic here.
  • Carry digital change through the entire organization. The whole company has to change in order to successfully integrate digital channels and Business models.
  • Find the right partners to push the digital ecosystem. In all digital initiatives, it is important to identify adequate partners at some point. Nevertheless, it is important to have covered the digital basics and gained some experience in order to manage the growing partner network and to meet partners at eye level.

Conclusion

It is not wise to rush Digital Innovation. Digitization cannot be completely externalized, but has to happen within the company. Nevertheless, it is helpful to join digital forces in a separate entity in order to accelerate growth. iq! supports companies to build up a digital organization, provides and organizes digital know-how and shares the entrepreneurial risk. For more information, please contact us.

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