Introduction to Digital Enterprise Management and Digitalization

Written By: Eric Kimberling
Date: February 24, 2023

Organizations throughout the world are in the midst of an arms race. It's not a nuclear arms race or anything like that, but it's an arms race to become a digital enterprise. But what exactly is a digital enterprise? That's what we want to talk about here today.

When we're talking to organizations, a lot of times they come to us with the attitude and mentality that they want us to help them become a digital enterprise. A lot of times we ask ourselves, what exactly is a digital enterprise? That's what I want to talk about here today – what is a digital enterprise, and what can you do to become more of a digital enterprise with a digital mindset?

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What A Digital Enterprise Is Not

Before I jump in and talk about what a digital enterprise is, it's important to understand what a digital enterprise is not. This is almost as important as the things that it is. One thing that being a digital enterprise is not is outsourcing your digital transformation initiative to a third party.

A lot of times, organizations will reach out to a big system integrator, a big consultancy, or a big software vendor in the hopes that they will provide them the silver bullet to make them a digital enterprise. Now don't get me wrong, those vendors can provide the enablers or potential enablers of becoming a digital enterprise, but that's providing just one input of many that's going to be required to become a digital enterprise. And of course, I'll share with you what those other pieces are.

Beyond technology, being a digital enterprise is not necessarily picking the best, sexiest, most modern, fanciest technologies that are out there. It could be, but it doesn't necessarily mean that.

It doesn't mean that you're picking the best technology. It doesn't even mean that you're picking a plethora of technologies. So that's something to keep in mind too – it does not necessarily make you a digital enterprise simply because you've gone out and spent a bunch of money on technology. So if it's not those two things, then what is a digital enterprise? That's what we are going to talk about next.

Digital enterprise

Long Term Strategic Alignment

The first foundational piece of being a digital enterprise is long-term strategic alignment. Now, you may be asking yourself, what does long-term strategic alignment have to do with becoming a digital enterprise? I thought we were here to talk about technology.

It has a lot to do with it, and that is because without having strategic alignment internally, as an executive team, with all your key stakeholders, and as an organization as a whole, you're not going to become a digital enterprise. You just aren't. It doesn't matter what you do with technology. It doesn't matter how much you invest in it. You're just not going to be unless you invest heavily in strategic alignment.

The reason this is so important to becoming a digital enterprise is that we need to have clarity on what being a digital enterprise is to us and what our digital transformation looks like for us as an organization. As a team, we have our own unique strategic goals and objectives. We have our own unique position in the market. We have our own unique ways of servicing our customers.

And so, we need to become a digital enterprise that supports those things and those goals. So first and foremost, you want to make sure that you have a clear vision of what it is you're trying to accomplish, what you want to look like as a digital enterprise, and ultimately, how technology and digital transformation workstreams can help you get there. So first and foremost, be sure you have that internal alignment on what it is you want to be when you grow up as an organization.

Targeting High Value Technology

The next key component or prerequisite of becoming a digital enterprise is targeting and investing in high-value technology, and ignoring the rest. Too often, organizations think that more is better, and in many cases, less is more. Investing in the newest, most bleeding-edge technology is not necessarily the right answer for your organization.

In some cases, it may be, but not always. So, it's important to first understand who you are as an organization, understand where you're trying to go as an organization, and that's why the strategic alignment that I mentioned is so important. Once you understand that strategic alignment, you have a better understanding of what types of technology or technologies you want to invest in first in your quest to become a digital enterprise.

For example, if you're a high-growth organization that values flexibility and the entrepreneurial spirit that you've built as an organization, being a digital enterprise to you might mean having technologies that allow you to be nimble, flexible, and responsive to changing market needs. That might lead you down the path of more customer-facing technologies like marketing automation, CRM, or Salesforce management types of technologies. It could also be e-commerce types of technologies. There are many different technologies that are more customer-facing and might be more appropriate for that type of organization.

Another example would be if you're a multinational organization that has acquired a bunch of companies throughout the world and now realizes that you have fragmented operations and you're trying to create a single operating model across the organization.

Becoming a digital enterprise for you might mean deploying an enterprise-wide ERP system that helps you automate and standardize more of your business processes. These are two very different examples but two very different definitions of what a digital enterprise might look like for those two example organizations.

The key here is to understand what it is you're trying to accomplish and then find the technology that's going to best help you get there.

Build Internal Digital and Change Competencies

Becoming a digital enterprise also entails a certain amount of self-sufficiency. You can certainly hire experts, and you should hire experts to help you through the process. But you don't want to become overly dependent on those third-party experts. Ultimately, to become a truly digital enterprise, you need to have internal competencies around change, technology program management, process improvement, and all the things that make a digital enterprise successful.

These are all things that you can benefit from by being a digital enterprise. So instead of just looking for technologies that you want to implement and deploy throughout your organization, you also want to look at how you can build competencies to help you be more self-sufficient and manage digital technologies and initiatives better in the future.

You should also consider how you can ensure that the third-party providers you hire, such as consultants, vendors, and system integrators, are helping you achieve that goal. The problem here is that our industry is broken.

The digital transformation consulting industry is broken and corrupt. Too many organizations look out for their own self-interest, which is to bill more hours and create a learned helplessness with their clients resulting in more revenue and profits for them. But for your organization, your best interests are creating those competencies in-house, which make the consultants' jobs obsolete over time.

That's what you want - a consultant who's working their way out of a job the entire time they're working with you. By the way, that's one of our philosophies at Third Stage Consulting. We don't want to be your partner long-term, not because we don't like you, but because we know it's not healthy, sustainable, or effective for us to be too dependent on our clients.

It's important for you to build those competencies in-house and work with a partner that can help you build and train and share that knowledge with you. That way, your organization can lead the charge going forward.

Ability To Change and Innovate

At the end of the day, being a digital enterprise means having the ability to change and innovate. Whatever you're experiencing today as an organization, whatever your organization looks like today, and what your customers and the market look like today, will be very different in the future.

So, to become a successful digital enterprise, your organization needs to be adaptable, flexible, and innovative. We want to think of ways to not only implement digital technologies but also implement business processes, organizational structures, roles and responsibilities, and change initiatives that allow us to be more continuously innovative, responsive, flexible, and able to adjust and roll with the changes.

In my opinion, that's what a digital enterprise looks like, and those are some of the key components that you need to include in your quest to become a digital enterprise.

If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Please contact me for more information eric.kimberling@thirdstage-consulting.com

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices.

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Eric Kimberling

Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.

Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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