Incumbent companies face critical decisions when it comes to addressing digitization. In this video interview, McKinsey director Paul Willmott argues the first decision is fundamental: whether a company is even in the right industry. That’s because digitization is blurring the lines between sectors, placing fresh demands on both leadership and organizational strategy.
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Gartner predicts that a lack of digital business competence will cause 25% of businesses to lose competitive ranking by 2017.
‘Digital business is not synonymous with IT. It is about revenue, value, markets and customers. It is outward-focused. It is a metaphorical combination of front office, top line and downstage compared with back office, bottom line and backstage. True, information and technology help to build the capabilities for digital businesses, but they are only part of a complex picture.’
In a digital business, digital technology, for the first time, moves into the forefront, into the heart of what the business is doing and how it generates revenue, seizes competitive advantage and produces value. Digital business represents a more extreme revolution than previous technology-driven changes, and CIOs, with their insight into technology and information, are positioned to develop and promote a successful digital business.’
Gartner has identified six crucial steps that will enable CIOs and other business leaders to build a successful digital organisation and change the game.
- Create the Right Mindset and Shared Understanding
- Put the Right Leaders in Place
- Launch a Digital Business Centre of Excellence
- Formulate a Digital Strategy to Respond to Opportunities and Threats
- Find, Develop and Acquire Digital Business Skills and Roles
- Create New Digital Business Capabilities