Five Pillars Of Digital Transformation: Evolve The Organization

Ashutosh Kumar, Joao Ribeiro, Jose Carvalho, and Kay P. Hradilak

Corporate organizations exist to fulfill a simple purpose: To give an order to the functions and processes of a value chain and assign people to roles that enable it to grow and stay profitable.

Digitization, as discussed in prior blogs, will transform corporate organizations in a profound way as well. Here are some aspects to consider when designing or transforming organizations. 

“Projectization” and agility

The structure and organization of companies and public institutions will be increasingly complemented by project-and knowledge-driven relationships and engagements. However, social media platforms and an increasingly project-based approach to work will break up hierarchies and silos as a matter of survival. Project organization will be an additional organizational element which will lead to a cultural revolution: cooperation and fast formation and disbandment of teams for projects will be a cultural trait that organizations will leverage and embed in their operations.

External service providers

Cloud-based business networks and projectization lead to an increasing number of external business partners who are often engaged on demand. Already today, telco operators run without owning the fixed and wireless lines, nor their own call centers, among other elements. Modern corporations will depend more on the integration of external knowledge work in their teams. Again, digital platforms accelerate this development tremendously. Digital agents will negotiate supply relationships and agree upon delivery schedules on behalf of their corporate masters.

Digitization of the organization

These two aspects lead to another trend: the digitization of the organization itself. Digital agents will take over operations for dispatchers, call center agents, and controllers. They will further expand the share of fully digitized end-to-end processes. An increasing number of corporations will no longer own major assets such as large office buildings or workshops.

Data-driven

Data is the currency of digitization. Data skills will be needed to drive all aspects of daily operations, decisions, and capabilities. Whether ownership of data platforms will lead to new power structures and monopolies in the business sphere is an unanswered question. Political powers and society will have a say on this, but without a doubt, companies must learn to capitalize and secure their data assets. 

Human- or machine-centered?

Here are some crucial questions in digital organization design:

  • Is this about embedding human talent into new agile structures?
  • Will human talent be replaced by artificial intelligence and machine-learning technologies?
  • Is the goal to empower the motivated knowledge worker and organizer, the team worker, and visionary?

The most likely approaches require engaged investment in both digital skills and technology.

It might sound counterintuitive, but corporate culture is about to become a bigger competitive differentiation factor than ever. Digitization is commoditization. Killer algorithms will always be matched by newer, better killer algorithms. Digital providers will offer their products and services to plenty of other players, leveling the playing field. The difference will be made by motivated, resilient, and creative workers.

Corporate organizations will become more fluid, more digitized, and more data-driven, but they will remain institutions comprised of human beings dedicated to fulfill a corporate vision, grow the business, and create value.

For more posts in this series, click here.