Increased digital density drives disruption on both demand and supply sides, where new players enter and compete fiercely with incumbents and turning things upside down. Digitisation is fundamentally altering the nature of competition in most industries and public sectors. By accessing different information flows, we are now able to quickly see trends, detected statistically, giving us a view of the future. Thus, it helps us invent new ways to communicate, collaborate, learn, do science and business.
Today, most of our work flows through our information systems. Consequently, information is now the main component of work. Processes, projects, and organisations are all abstractions meant to coordinate and measure the use of information to solve problems, produce customer value or improve performance.
Furthermore, the industrialisation of the Internet drives the digital transformation of industries and society, and it creates new digital business logics, which all industries and governmental organisations need to adhere to in order to capture new opportunities and ensure future competitiveness. What used to be long product development cycles are now continuous upgrades, jointly innovated with customers and partners. What used to be products are now sold as services. What used to be proven business models are now increasingly under pressure.
This will reshape industry boundaries and create new industries, likewise in the public sector. Digital technologies, which are underlying these competitive thrusts, are now generating a staggering amount of information, accessible as never before. This is fuelled with increasing analytical and processing capabilities where algorithms scatter intelligence across digital networks and mobile devices making computing power and information accessible to users around the world. As these technologies gain momentum, they are profoundly changing the strategic context in which companies and governmental organisations compete and operate.
Digital technology creates exiting opportunities. What organisations need is a winning strategy in the digital space, rather than an array of functional digital strategies that are more or less decoupled from the overall strategy. Many organisations focus on substituting their brick-and-mortar setup with a digital equivalent. This is really the opposite of defining a winning strategy. If top management does not call for understanding the causes of disruptions and the opportunities that digitisation bring to the table, digital technology just becomes another technology and competitive advantage is eroded. Such understanding is essential for defining the wanted position and strategic direction, as well as employee capabilities.
Digitisation is changing the ways organisations use and think about technology, thus moving technology from a supporting enabler to a leading one that is integrated in customer interactions, open innovations, collaborations with partners and suppliers, revenue generation and ways of working. Digitisation is moving into the heart of what the organisation should do to produce more value, gain faster competitive advantage and generate more revenue and profit.
Hence, organisations that are looking to win in the digitised world need more than a digital substitution, i.e. not just an IT strategy for digital solutions. They need a strategy that is forged for a world where digital density continues to grow exponentially. They need to understand the sources of digital disruptions on both demand and supply sides and adequately transform offerings, solutions, processes, business models, customer experiences, etc. Exploring and exploiting digital connections between systems, people, places, and things, by combining physical and digital resources in new innovative ways, become vital.