The Digital Enterprise Hype Cycle
Hype cycles can be fun and exciting. They often represent something new and important and potentially game changing. But they can also be dangerous as they obfuscate an otherwise important subject.
That’s the situation with the hype surrounding the “Digital Enterprise.”
The term Digital Enterprise seems to be everywhere today. Most every technology company in the world seems to have a solution to help you become one. Every consulting organization seems to have consultants that can help you become one. And every technology (and increasingly business) magazine has articles to help you become one.
Digital Enterprise: A Challenging Definition
The challenge is that no one seems to agree on what the term even means, let alone how to become one. This is, of course, to be expected. As humans, we gravitate toward using simple terms to explain complex ideas. It helps make these complex ideas feel more understandable. But when an idea is in the development stage and is being used by many people to mean very different things, it can become dangerous as the term loses its ability to simply communicate the complex.
For some, “digital” is all about the web. For others, it is simply a more modern, updated term for all things technology. Some use the term to simply reflect the idea of a digitally-powered customer experience. At the Institute for Digital Transformation, we believe that a Digital Enterprise is all of those things, but it is actually much, much more.
Digital Enterprises Have Transcended the Industrial Era
At the Institute for Digital Transformation, we are focused on studying the impact on organizations and their leaders as we transition from the Industrial Era into what we call the Digital Era. In it’s simplest form, therefore, we believe a Digital Enterprise is simply an organization that has completed this transition. But the result of that transformation is an organization that looks very different from today’s typical organizations.
We believe that a Digital Enterprise is one in which Digital Technology is at the center of how the organization:
- Produces products and services (even if they are non-digital)
- Generates revenue
- Seizes competitive advantage
- Produces value
- More competitive
- More economically efficient
- More capable of dynamically adapting to new competitors and to shifts in the market
Technology at the Core
On the surface, this definition may not seem that significant. But the important element is that in the Digital Enterprise technology is not enabling or supporting a business process, but is instead at the core of each business process. The shift to becoming a Digital Enterprise is a shift away from utilizing technology at the edges of an organization and instead leveraging technology as the chief driver of every business function and business process. As a result, the core functions and structures of the organization will also shift and realign, becoming flatter and more dynamic (powered by technology) to best leverage these new technology-driven business processes.
In effect, while Digital Enterprises will not be “tech companies” in the way we think of them today, on the inside they will think, function and act much more like a technology start up than they will a traditional, industrial era organization. They will be structured and organized with a technology-first mindset and designed for speed and agility. And, as a necessity of that mandate, their structure, organizations, business processes and functions will be unique to them (unlike the standardized hierarchical models of Industrial Era organizations.)
While this describes how a Digital Enterprise will look and function, there is one additional piece that is critical to the transformation: people.
People at the Core of Technology
In preparing for this article, I asked our Institute Fellows and our members and followers to describe their impression of a Digital Enterprise. The answers came back as a set of ideas, adjectives and concepts and included things like: “digital engagement”, “digital DNA”, “collaboration”, “agile”, “value perspective”, “flexible”, and “self-healing.”
Mark Rampey, Chief Systems Architect for the State of Tennessee, said, “I see a Digital Enterprise as an automated, dynamic, flexible, learning organization that can leverage technology to quickly gather information, identify opportunities and challenges, efficiently serve its customers/employees/partners, and adapt to market changes.”
What I think all of these statements have in common is that they are not addressing the structure of an organization as much as they are describing the people that inhabit it. The terms used are describing the way people interact with and leverage technology to engage with their customers, employees and partners. They are describing the very human attributes that will define the Digital Enterprise.
In these responses, we find a truth: While a Digital Enterprise will be manifested in its form and function, it will be defined by its culture and the attitudes, values and beliefs of its people.
Plotting Your Course to Becoming a Digital Enterprise
Driving the transformation of an organization into a Digital Enterprise will be a significant effort. It will require that you address virtually every aspect of your operating business model: organizational structure, business processes, operational functions and, of course, technology strategy. But to truly succeed in executing this transformation, the journey will not begin in any of those areas. It will, instead, begin with your people and your culture. Your team must embrace the vision of becoming a Digital Enterprise, understand the fundamental magnitude of what that means and then be prepared to march steadfastly into this future with you. Without them, you’ll have no hope of succeeding.
About the Author:
Founder & Institute Fellow
Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.
Principal Analyst with Intellyx, founder of The Institute for Digital Transformation, author of three books, and most recently the co-founder (with his wife) of The MAPS Institute, he is a sought-after keynote speaker and has been quoted or published in CIO, Time, InformationWeek, CIO Insight, NetworkWorld, Computerworld, USA Today, and Forbes.