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New operating models for digital future

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An organisation’s processes, assets and even products have become a living ecosystem of communication, cognition and collaboration due to the increasing connectedness of everything.

To compete in the intelligent markets, it is essential that an organisation’s operating models are transformed, according to the IDC MaturityScape: Operating Model Digital Transformation.

Operating Model Digital Transformation (DX) is the ability to make business operations more responsive and effective by leveraging digitally connected products/services, assets, people, and trading partners. This study identifies the stages, dimensions, outcomes, and actions required for business executives to integrate digital business technologies into their future operating models.

The study specifically helps business and technology executives identify areas in need of improvement in support of digital transformation in five key areas or disciplines or dimensions: connected products/services; connected
assets; connected processes; decision-making; and organisational structure.

Collectively, these areas come together to reshape how a company fundamentally operates in an intelligent economy and successfully completes its digital transformation. The ultimate business outcome is a company that shapes markets through digital capabilities and establishes significant market share leadership.

In addition, the new framework outlines five stages of maturity: ad hoc, opportunistic, repeatable, managed, and optimised. Maturity in Operating Model DX enables the enterprise to spend more of its time and energy focused on developing new products and services by integrating the business’ external digital connections to its markets and suppliers with the internal digital processes and projects that are directly impacted by customer requirements. Operating Model DX defines “how” work gets accomplished in terms of digital transformation.

Leaders must take a hard look at themselves and their teams and assess whether they have the “right stuff” to hone and synthesise all the ingredients of digital transformation. IDC believes that many organisations will attempt to transform through a series of initiatives targeting specific digital competencies while losing sight of the interplay and synergies that are needed for true operating model DX.

Meanwhile, not all organisations will prioritise attention in the same way. Retail and financial services will likely focus first on connected products/services, along with manufacturers and utilities. Connected assets will get a first look from service firms offering maintenance or smart building technology, as well as manufacturing and energy.

Organisations that master the orchestration of the five disciplines will thrive; those that don’t will struggle to survive.

“While operating model transformation is one of the five elements of overall digital transformation, it may be the most foundational for continued success and the most difficult to realise given the long-established practices in many industries,” says Robert Parker, group vice-president and GM of IDC Retail, Energy, and Manufacturing Insights. “This study will help organisations understand where they are in transforming their operating model and what they have to do to realise the benefits of DX.”