Strategy Formulation and Strategy Inplementation
Major companies have failed to fully comprehend and adapt to the most recent technological changes of the last decade. This is in large part due to the disconnection between strategy formulation and strategy implementation (Correani & De Massis, 2020).
One of the most common problems where companies fail is that they don’t have the scope of the digital transformation strategy in place. Companies need to realise that a digital transformation strategy is always in the making, with no foreseeable end (Chanias, Myers & Hess, 2019). Too many companies fail to provide continuous service for customers beyond their initial implementation of digital services. The needs of the customer are continually changing, and so, too, should the digital services available.
Another problem that companies face are that they do not provide for enough data sources (Blumensaat & Leitão, 2019). Many companies simply add their internal data sources, without looking to external data sources such as social media data, chatbots, satellite imagery and blockchains. They need to constantly monitor these to gain insights into market trends and consumer behaviour.
A third problem companies face is that they don’t have an adequate data platform (Allen, Tamindael & Bickerton, 2020). A data platform should provide tools and capabilities for analysing data and generating insights that drive business outcomes. Many companies do not have this to suit the needs of their business.
A fourth problem is that many companies don’t get the right people for their digital transformation (Porfírio, Carrilho, et al, 2021). The strategy is driven by managers’ decisions deciding how to exploit the available infrastructures, and for this the companies will need to get the right people.
If the companies fail to address the scope of the digital transformation, they may miss out on possible cooperation with external IT providers, and also for new working styles in a digital environment (Chanias, Myers & Hess, 2019). This can affect their future viability.
If the companies fail to provide for enough data sources, they may miss the opportunities for ubiquitous sensing, emerging data sources, and associated techniques. They may also fail to prioritise objectives and adapt to upcoming changes (Blumensaat & Leitão, 2019). The viability of the organisation depends on this.
If the companies do not have an adequate data platform, they may miss opportunities including allowing customers to do more, allowing customers to do better, customer co-production, and allowing customers to provide input and feedback (Allen, Tamindael & Bickerton, 2020). Customer satisfaction and participation is essential for the future viability of the organisation.
Without the right people in place, adequate implementation of the digital transformation strategy may not occur. This will affect the development of the company, especially when it involves deep changes in the company’s overall market positioning (Porfírio, Carrilho, et al, 2021).
Of course, there are many other areas where companies fail, including their partners, AI, information and knowledge and the processes and procedures they adopt, amongst others. But the four problems identified above will affect the future viability of companies that don’t address them properly.
References
Allen, B., Tamindael, L. E., Bickerton, S. H., & Cho, W. (2020). Does citizen coproduction lead to better urban services in smart cities projects? An empirical study on e-participation in a mobile big data platform. Government Information Quarterly, 37(1), 101412–. https://doi.org/10.1016/j.giq.2019.101412
Blumensaat, F., Leitão, J. P., Ort, C., Rieckermann, J., Scheidegger, A., Vanrolleghem, P. A., & Villez, K. (2019). How Urban Storm- and Wastewater Management Prepares for Emerging Opportunities and Threats: Digital Transformation, Ubiquitous Sensing, New Data Sources, and Beyond - A Horizon Scan. Environmental Science & Technology, 53(15), 8488–8498. https://doi.org/10.1021/acs.est.8b06481
Chanias, S., Myers, M. D., & Hess, T. (2019). Digital transformation strategy making in pre-digital organizations: The case of a financial services provider. The Journal of Strategic Information Systems, 28(1), 17–33. https://doi.org/10.1016/j.jsis.2018.11.003
Correani, A., De Massis, A., Frattini, F., Petruzzelli, A. M., & Natalicchio, A. (2020). Implementing a Digital Strategy: Learning from the Experience of Three Digital Transformation Projects. California Management Review, 62(4), 37–56. https://doi.org/10.1177/0008125620934864
Porfírio, J. A., Carrilho, T., Felício, J. A., & Jardim, J. (2021). Leadership characteristics and digital transformation. Journal of Business Research, 124, 610–619. https://doi.org/10.1016/j.jbusres.2020.10.058
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