Becoming a more digital organization requires quite some work. According to a report by Gartner published two months ago, you should “determine your enterprise’s digital ambitions mix”.
The question to answer is this: should you transform your business model to capitalize on the adoption of digital technology, or start by optimizing it first? In the long term, do you seek to transform your business model or optimize the one that already exists?
We believe, Gartner emphasizes that being very specific about your strategic digital ambitions will help you build a more consistent business strategy, improve processes and perhaps also create new products, services and models.
Figure 1. Gartner, Digital Business Ambition: Transform or Optimize?, Hung LeHong, Graham Waller, 15 January 2021.This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Pitcher.
Digital Optimization vs. Digital Transformation: How to Decide
With a clear digital ambition in terms of tangible outcomes, businesses will be able to make decisions about their current digital journey, their business model and the company’s mission. They will be able to reflect on how to optimize these things and perhaps undertake a business transformation at a deeper level, one driven by the ambition to make existing products, services or even the whole business model digital. Gartner’s two main takeaways are:
- Digital optimization – “Digital business optimization is the part of the digital journey that improves the enterprise’s current business model or public mission. Examples include using digital technologies to improve customer experience and productivity while maintaining the same business model. “
- Digital transformation – “is the part of the digital journey that pushes the enterprise beyond the current business model or public mission, as a whole or in specific business units. Examples include new digital products/services, platform and subscription-based business models.”
Identify the most important business outcome
By identifying the most important business outcomes that could result from the digital business optimization or transformation processes, you will set your digital ambition and build the foundation for your digital business strategy. Technology, organization and business models will depend entirely on this decision.
Examples of traditional enterprises truly transforming their entire business model are extremely rare. Most organizations will see true digital transformation changes in only a subset of their enterprise, such as in certain product or service lines or individual business units – and that’s okay.
Select the best mix of optimization and transformation strategies
Digital business optimization has a significant impact on business operations and the benefits are immense – it has just as much weight as digital business transformation. What’s key is selecting the best mix of optimization and transformation strategies to roll out in the specific areas you want to tackle.
“Some leaders and often CEOs would like to capitalize on digital transformation opportunities arising in their industry, while others (e.g., business unit leads) often want optimization-heavy outcomes to improve the current approaches. A good digital ambition gives each leader a home for their goals. This aligns the collective executive team and balances the digital journey,” says Gartner.
Read your complete complimentary report now for clear guidance through the recommended steps: “Digital Business Ambition: Transform or Optimize?” by Gartner. Get the advice you need to make a confident choice.
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