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Organizational Barriers to Digital Transformation

Written by S. Gupta

Paper category

Master Thesis


Business Administration>Management




Thesis: Industrialization is related to how economic development and IT and other technical support lead to the transformation of enterprises and countries. This section focuses on digital transformation and why it is seen as the next industrial revolution. In the past 50 years, the information technology adopted by organizations (Porter and Heppelmann, 2014b) has profoundly changed their business twice and fundamentally reshaped their competition, and now they are standing in the third IT drive The edge of transformation and competition. The first two waves not only help promote growth in all economies, but also help organizations increase productivity while reducing operating costs (Sánchez, 2017). However, in the past few years, researchers, business managers, and organizations worldwide (Henderson and Venkatraman, 1993) have admitted that the role of information technology in enterprises has undergone a significant shift as described below. As the role of IT in the company has undergone major changes, this has led to a strategic view that the information technology strategy within the organization must be aligned with its overall business strategy (Davenport and Westerman, 2018). Porter and Heppelmann provide a historical and chronological view of IT impact and some analysis in their publication (Porter and Heppelmann, 2014a). They describe these three waves as follows: The first wave of IT transformation occurred in the 1960-1970s and involved process automation. This helps automate various activities in the value chain, including order processing, computerized manufacturing resource planning, and bill payment. All of this has led to a surge in productivity because of the new amount of data that can be captured and analyzed for each activity. The rise of the Internet drove the second wave of IT transformation from the 1990s to 2000, which led to ubiquitous global connectivity. Whether it is with customers, external suppliers or through different channels, this can achieve integration and coordination between different personal activities. This wave enables the company to closely integrate its global partners, suppliers and customers. The world around us is constantly changing, and today's companies need to completely change themselves every few years to stay relevant (Allen et al., 2007). Digital transformation is becoming a hot topic for global companies (Van der Bel, 2018), and according to (Vey et al., 2017), it is at the beginning of the fourth industrial revolution. Not surprisingly, this has been the number one topic in the mind of every business leader, researcher, and every analyst in the past few years (Andersson, Movin, and Teigland, 2018). The Internet and technology have changed the business landscape, and digital transformation is now closely followed. This will change our understanding of the current way of operating business, and it will affect our current lifestyle at an unprecedented rate (Deloitte, 2017). Although there have been many disturbing predictions and studies on this transformation, and how this digital transformation will affect the company, leading to a fundamental and widespread transformation, there are still many individuals and companies that fail to acknowledge the impact of current developments And depth. Companies are accepting transformation at a different rate, and for most companies, there is still a long way to go (Westerman et al., 2011). If it were not for digital disruption in many industries, we can already see the consequences of new platform companies entering existing markets and dominating previously protected markets. All of this is hard to believe. We are now living in a platform economy, and companies around the world are building agile solutions and platforms related to the digital economy. Facebook, Airbnb, and Uber are all well-known examples (Sánchez, 2017). Digitization is not a product or service-you can plug directly into the existing organization. The way customers choose, buy, and consume different products and services is changing rapidly. Digital transformation is changing the ICT industry, so all companies must act quickly to stay ahead and stay relevant in the competition (Thierry, 2016). At Ericsson, digital transformation is defined as “fundamentally improving the way they do business with their customers and changing the way they work internally by leveraging the power of digital technology” (Ericsson, 2018). It is about using technology to fundamentally improve the company's influence and performance. Read Less