Digital disruption is rapidly changing the entire competitive landscape for companies, prompting them to learn how to apply new technology and organizational capabilities. In a working paper published earlier this year, "Designing Digital Organizations—Summary of Survey Findings," researchers including Jeanne W. Ross of the MIT Sloan Center for Information Systems Research (CISR) looked at the digital capabilities of 171 senior business and IT leaders and offered recommendations on how companies can stimulate their digital transformations.
Digital disruption, as Ross explains in this 2016 video, involves the impact of "SMACIT"—social, mobile, analytics, cloud, and the Internet of Things. In the course of their research, the paper's authors noted that efforts to leverage digital technologies and enhance customer information and engagement is resulting in the need for greater integration of products, services, and processes across entire organizations.
Among the report's key findings:
- The extent to which digitized solutions are integrated and customer engagement is personalized predicts a company's performance relative to competitors.
- Companies that create both integrated digitized solutions and personalized customer engagement demonstrate more innovativeness and agility.
- Companies rely on three key technology resources to build this innovativeness and agility: an operational backbone; a digital services platform with reusable business, technology, and data components; and linkages between newer digital services and data and infrastructure services embedded in the operational backbone.
According to Ross, companies need to create policies for planning and implementing digital changes, including determining who has access to the application programming interfaces (APIs). Only about five percent of the companies examined by the working paper's authors were "architecting in the sense that they're assigning accountability, they know who owns the data and who has a right to the API, and who has standards around how they write APIs," she says in an interview with The Wall Street Journal's Jason Dean at the CIO Network annual meeting in San Francisco. "This is an accountability challenge. If we get accountability right, we will avoid API chaos."
Jeanne Ross is Principal Research Scientist at MIT CISR. She teaches in the Executive Education programs Essential IT for Non-IT Executives, Revitalizing Your Digital Business Model, and the Advanced Management Program.