Digital Disruptors: Organizing Businesses For A Digitally Transformed Market

Organizing Businesses For A Digitally Transformed Market Intelligenthq

Digital change is transforming the world as we know it, and this is equally true within business as it is in other areas of our lives. Understanding how to best handle digital disruptors is the topic of a recent report by Ericsson and the Networked Society Lab.

The reasoning behind developing such a report is explained by Ericsson and the Networked :

“Sooner or later, most business leaders will be faced with the billion dollar question: How do you model and organize a business for a digitally transformed market.”

The rate of change is phenomenal, and current entrepreneurs are able to drive change like never before. They have the digital technology at their fingertips to do it, and new types of business models, technologies and innovative approaches are being developed all of the time. This does not mean that these changes are short term in nature. In fact, the authors explain that the digital disruptors have long term approaches in mind with a view to revolution rather than evolution. This means that competitors need to either collaborate or fail.

While Ericsson and the Networked Society Lab explain that this will clearly differ from product to product and market to market, as well as from month to month in many cases, they also point out some similarities that need to be considered. These are the organizational core, production, business models and market approach. Each of these is now explained in turn.

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The Organizational Core – Ericsson and the Networked Society Lab noted that businesses have had to consider the ways in which they organize themselves to deal with a continual state of change. Perhaps one of the most exciting changes in this area is that companies have to put their people first. The top talent is freer to move around and new generations are less set in the ways of the past of being loyal to one company for life. This means that these organizations have to invest in the unique talent that they have available to them. In these types of organizations leaders are seen as people that make connections and join up the dots to find solutions. They build creative capital and empower people. They are not focused on micro management, but instead on mission management. These organizations are also flat and they share information quickly throughout the organization. People are also distributed in all different parts of the world. Technology becomes a strategy in these organizations and it contributes to driving the constant pace of change that these companies experience.

Production – This area looks at the ways in which production resources are gravitating outside of the traditional organizational structure, considering areas like crowdsourcing and open innovation. On demand manufacturing is the name of the game, and digital transformation has smoothed the way for this, cutting back on inefficiency and giving customers what they want. This approach is better at meeting real demand, cutting back on storage costs and waste and getting rid of middle men. Meanwhile crowdsourced production is also an important feature of these companies, and in many cases the crowd may even do the work for free. At the same time, open innovation leverages the ideas of many to be able to extend organizational success beyond the limits that it may have inadvertently set itself by opening up the company to new ideas. This is not without its challenges, but the benefits are manifold.

Business Models – Under this topic, Ericsson and the Networked Society Lab examined the ways in which business models are having to adapt and make way for versatile technology platforms, company structures that are networked and open market places. Featuring in this area is the concept of a “platform business” which is one that is able to create technology that can be the foundation for additional products and services. Open market place logic may also be utilized to get the best services from anyone, anywhere. Indeed, as the report authors explain: “In today’s digital markets… aggregating supply side access has so far proven to be one of the fastest ways to grow big”.

Market Approach – Since the end user has become all important, this focuses on how businesses have to adopt a variety of different business models to meet user experiences. So called “user centrism” focuses on building a business from the perspective of the end user, rather than taking the approach of building it on the basis of a business model that already exists. This means that legacy infrastructures and bureaucracies often go out of the door, and instead the customer is put first, with a goal of making his or her life more simple and/or improved.