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Organisational structures for digital transformation: 4 archetypes emerge

George Nott | Sept. 7, 2017
IDC has identified four models companies can adopt to achieve their transformation strategies – but which is best?

 

The Digital Business Unit

Best for: Creating innovative offerings

Objective: Create a disruptive business

“This fourth model really doesn’t have much to do with the first three models. They don’t happen too often,” Whalen explained.

“Some companies – often they’re very large – they’ve set up a seperate digital business unit. The unit often has its own real estate, they’ve hired in their own leader. And usually it becomes a magnet for attracting digital talent. And they’re not really so concerned with transforming the organisation, this group is more concerned with: how do I create a disruptive business or offering?”

The archetype emerges, Whalen says, because the ‘parent’ company is so big and bureaucratic, and full of so many legacy systems, it is more effective to “cleave off” and start a separate unit to focus on digital.

The archetype is more common in APAC than elsewhere. Some 13 per cent of companies in the region are taking this approach, compared with only 7 per cent in Europe and 3 per cent in the US.

Despite being good at coming up with new products and working more closely with customers, IDC are not recommending the model – yet.

“It is a very effective model in getting things done and getting them done quickly. The question in our mind is – and then what happens? When the group grows up and you’ve got the mothership that’s doing its own thing. How are we going to bring them back together again? We haven’t seen the end game here,” Whalen said.

 

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