The advent of new technologies is enabling enterprises to become digital and keep pace with the emerging market forces. However, there exist multiple perspectives around digital, which are causing confusion and the resulting lack of clarity can be an impediment in enterprises’ digital drive. Through this article, I attempt at putting the concept of a digital enterprise in its proper perspective.
A digital enterprise, basically, is an enterprise. This enterprise uses digital technologies to respond to market forces, interact with external entities like customers, suppliers and financial institutions and adopt new work practices enabled by digitization.
In short it is digital internally and surrounded by digital context externally.
As shown in the figure above, there are four main surrounding digital waves, which makes up this context. These waves overlap with the concept of a digital enterprise but they should be understood as distinct from the digital enterprise. Since, these concepts are in their formation stage, a lot of confusion may remain with regards to their distinctiveness. These four waves supports, overlaps with and provide the context for a digital enterprise, but they are not the digital enterprise.
The external facing activities to understand, prospect, connect with and attract customers. Though mostly done external to an enterprise with the help of digital services agencies, integration with the internal CRM, ecommerce, production planning and inventory systems is a natural progression.
2. Digital institutions
Mainly the financial institutions like banks and tax authorities. With increasing digitization of the institutions, financial transactions will be more and more automated and real time.
3. Industrial internet
When manufacturing goes digital and enables the products to interact become digital, the machine to machine interaction shall unravel huge opportunities for new kind of services.
4. Digital supply chain
When the supply chain gets integrated using digital technologies, the flow of material shall be controlled by a seamless flow of information, making the processes to become efficient, effective and smart.
Emerging at their cusps are the new type of digital players- the distribution and supply intermediaries, digital payment providers and broad range of digital service providers.
Amid this context the digital enterprise becomes a reality. The contextual realities must drive a digital enterprise.
The digital enterprise emerges in the context of the forces depicted in the figure. This also suggests that not only the digital natives but even the traditional enterprises will have to adopt digital ways to survive in an increasingly digital context. This adoption must be an all rounded focus on an appropriate leadership, strategy, boundaries, culture and infrastructure aspects driven by unique capabilities the enterprise needs to compete and succeed.