Written for FutureEnterprise by Iosif Alvertis.
Nowadays, a vast majority of enterprises and businesses around the globe utilise digital technology in various different forms and at least in a small percentage of their activities [1]. After all, the digital economy itself is growing at seven times the rate of the rest of economy [2]. However, a digital enterprise is a much narrower subcategory of entrepreneurship, and creating or becoming a digital enterprise is a truly challenging and complex task to achieve [3]. This article describes what a digital enterprise is, and how it can enable new forms of enterprises that will lead their markets and build a competitive advantage towards an uncertain and challenging future.
Digital Enterprise is a long-standing concept that has gained traction over the last decade – initially intertwined with mere digitalization of the traditional processes of an enterprise, but eventually encapsulating its digital transformation and digital value creation. Throughout the years, a number of relevant concepts, like Social Enterprise, Sensing Enterprise, and Enterprise 2.0, have emerged and they transpire similar directions for enterprises who want to thrive and prevail in the Digital era.
According to Gartner [4], “Digital Business is the creation of new business designs by blurring the digital and physical worlds. Digital business promises to usher in an unprecedented convergence of people, business, and things that disrupts existing business models. With more than seven billion people and businesses, and at least 35 billion devices, communicating, transacting, and even negotiating with each other, a new world comes into being: the world of digital business.” Putting more focus on the technological aspect, additional definitions claim that Digital Enterprise “leverages (and ultimately is built upon), a range of digital technologies to drive revenue and create value for customers via innovative business strategies, processes and interactive experiences. At its core, Digital Business empowers buyers and sellers through data and collaboration, enabling analytics-based insights and behaviors, and the on-going creation (and enhancement) of digital offerings. Digital Businesses, at its core, a means to optimize how, when, and where business is done using a dynamic array of Cloud-enabled resources – with improved means of managing and monetizing those resources and the processes in which they are used” [5].
There is an active discussion in literature and around the World Wide Web regarding what are the most important aspects – and defining to some [6] – of a digital enterprise [7]. The Enterprise Architecture is actually the enabler that allows an organization to build progressively more and more digital components, and make them work under the same organizational and stakeholders’ context. Putting everything together, a digital enterprise consists of components, endpoints, peripherals and stakeholders, namely (see Figure 1):
- Digital strategy specifying the vision, objectives, action plan and anticipated impact of “being digital” and considering digital as a business that creates value, not simply as a (web, social, mobile) channel that drives or facilitates activities.
- Digital skills referring to the digital literacy of the human resources of an enterprise (either being digital natives or digital immigrants) and to the acquisition and cultivation of digital talent.
- Digital workplace re-inventing the working environment and capitalizing on disruptive digital technologies for mobility, multi-channel communication and productivity of the workforce.
- Digital value chain with novel technologies poised to support the entire set of business operations – e.g. new product-service development, sourcing and direct procurement, manufacturing, marketing, logistics, and distribution – in an integrated manner.
- Digital intelligence promoting evidence-based decision making through real-time knowledge management and data analytics and bringing a more thorough understanding of the enterprise ecosystem through an end-to-end hollistic digital mentality across all business operations.
- Digital infrastructures underpinning the digital strategy and indicatively covering the data centers, workplaces, networks, devices, security and public/private cloud infrastructures that drive high performance in the enterprise operation.
In the context of FutureEnterprise, the term “new forms of enterprises” has been adopted to reflect the next evolutionary step of a Digital Enterprise. New forms of enterprises can be simply viewed as the 2nd generation of digital enterprises, visualized in Figure 2. Such an evolutionary organization has accomplished to render every digital process and infrastructure of the organisation, internal and external, aligned and managed under common strategic, business and operational goals.
Thus, every offering, and its basic operations can be exposed under a common interface (i.e. a digital marketplace) that is deeply integrated into the organisation and provides a strong, common, secure authorization layer, integrated with an intelligent management system for business rules that express the business strategy. Therefore, the leadership of this organization can be deeply integrated in the whole organization operations, get real-time feedback and input from every stage of the enterprise, and even allow the whole workforce participate in the strategy planning and evaluation. Consequently, there is a much more concrete and centralized enterprise architecture that allows companies to be more flexible and responsive, even if the decision and planning authority is centralized.
In such an organization, digital transformations can have more impact in the whole organization performance and easier/faster adaptation on (its) environmental changes, they can innovate better and faster by changing their business models easier, in order to adapt on challenges, changes and opportunities, while they may develop more easily collaborative networks (aka alliances) with other digital enterprises.
At the end, new forms of enterprises are “Digital Enterprises of the Future, driven by constant business model transformation and innovation, acting as multi-sided platforms built on – as well as emerging from – digital innovations at the global, as well as local level, to produce shared value for their whole ecosystem”.
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- The Digital Enterprise, McKinsey Website, http://www.mckinsey.com/insights/business_technology/the_digital_enterprise, 2013 (Retrieved 15/01/2015).
- EC (2014). Digital Entrepreneurship. http://ec.europa.eu/enterprise/sectors/ict/digital-enterpreneurship/index_en.htm
- Three Characteristics of Digital Enterprise, http://futureofcio.blogspot.gr/2013/06/three-characteristics-of-digital.html, 2011 (Retrieved 15/01/2015).
- Digital Business, Gartner Website, http://www.gartner.com/technology/research/digital-business/, 2014 (Retrieved 15/01/2015).
- A Definition of a Digital Business, http://digitalnaiv.com/2014/09/12/en-a-definition-of-a-digital-business/, 2014 (Retrieved 15/0152015).
- 7 Defining Aspects of a Digital Enterprise, http://emergententerprise.com/?p=87, 2014 (Retrieved 15/01/2015).
- Can you survive the age of integration and collaboration?, http://www.i-scoop.eu/can-survive-age-integration-collaboration/, 2015 (Retrieved 15/01/2015).
- Deloitte, “The digital workplace: Think, share, do”, 2012/2013.
- A digital workplace definition, http://www.clearbox.co.uk/a-digital-workplace-definition/?utm_content=buffer8db8b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer, 2015 (Retrieved 20/01/2015).
