Digital Transformation of the Enterprise Value Chains
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This conceptual paper discusses the significance of digital transformation (DX) as a transformation of enterprise value chains and the necessity for real-time data management in achieving competitive advantage. It emphasizes the role of information systems as strategic partners in business processes and highlights the impact of disruptive technologies on industries. Ultimately, it concludes that digital and information systems should be integrated as core activities within value chains to enhance company performance.
Digital Transformation of the Enterprise Value Chains
- 1. Digital Transformation of the Enterprise Value Chains (conceptual paper) Rui Ribeiro rui.ribeiro@ulusofona.pt COPELABS – Cognitive and People Centric Computing Labs, Universidade Lusofona de Humanidades e Tecnologias
- 2. This paper aims to ▪ Present that Digital Transformation (DX) is also a Value Chain Transformation ▪ Describe the impact of need to achieve a real-time Data, Information, Knowledge & Wisdom (DIKW) cycle ▪ Justify why it’s fundamental to understand why Information Systems is a strategic partner of the business and needs to be considered as a core- activity in the Value Chains
- 3. • “the information revolution is sweeping through our economy” Porter, M.E., Millar, V.E., 1985. How Information Gives You Competitive Advantage. Harvard Business Review 1985
- 4. From the Information Age to the Information Prediction 80’s and 90’s • companies were starting to face the challenge to create data and get information Today • data and information are already considered commodities • decision makers need to upgrade their information and digital ecosystems to get knowledge and wisdom to be able to take the lead and be able to get a competitive advantage
- 5. Technologies converts data into valuable business insight and future control Disruptive Technologies : • In satellite mapping, GPS controlled machinery, predictive analytics, drones, and robotics, Internet of Things (IoT), Artificial Intelligence (AI), etc Businesses examples: • connected farms, soil- moisture sensors, autonomous tractors, smart cities, health diseases prevention, livestock wearables, the industry is changing Image sources: JohnDeere.com, agroman.in, microsoft.com, forbes.com Sources: O’Reilly, 2015. “Connected Cows?” - Joseph Sirosh , Kite-Powell, J., 2017. Fujitsu Bets On Connected Cow Technology To Transform Farms One by One Forbes
- 6. DIKW Knowledge Hierarchy Image Source: KARIM VAES R.L. Ackoff, 1989. From Data to Wisdom. Journal of Applied Systems Analysis 16 3–9.
- 7. DIKW is a virtuous cycle Knowledge Management spiral Data Information Knowledge Wisdom ƒ(X) Optimum Market Value function ƒ'(X)
- 8. In 1985, Michael Porter defined the Value Chain concept With this Porter understood that Information value has a fundamental infrastructure to achieve efficient models
- 9. But … today • We live in a Digital Transformation paradigm, which is reengineering the processes with today’s technology • and Technology is today quite mature Source: Collins, J., 2001. Good to Great: Why Some Companies Make the Leap and Others Don’t, 1st edition. ed. HarperBusiness, New York, NY People Technology Processes Information Systems
- 10. There is a need to change the paradox and assume Information Systems as a strategic and a core activity “CEOs are more dependent on CIO insights to innovate and improve these processes” - in IBM CIO Study 2009
- 11. Digital and Information Systems Strategy Several studies confirm: • best digital companies are 26% more profitable than their industry competitors and generate 9% more revenues • companies that are effectively using the new Data Science capabilities are more productive and profitable in 5% to 6% than its peers Sources: Anthony et al., 2018; CapGemini and MIT Center for Digital Business, 2012; Court et al., 2015; Kasturi, 2018
- 12. An Intelligent Enterprise has Digital Strategy in the center
- 13. In conclusion • Automate the Data, Information, Knowledge and Wisdom (DIKW) hierarchy • Digital transformation is changing the way that companies understand its core strategic activities • Digital and Information Systems need to be seen as a Core and strategic activities in Value Chains