The European Commission emphasized on the need to invest in digital infrastructure
Strategic barriers in digital transformation
In the age of digital transformation, the burden of legacy IT platforms and architecture, lack of skills and expertise in digital domains, fragmentation of data systems and insufficient alignment of technology and business are the greatest 2018 barriers to the organization’s digital transformation journey.
A strategy is the creation of a unique and valuable position, involving a different set of activities (Porter)
If according to Porter, “strategy is the creation of a unique and valuable position, involving a different set of activities” , then the question remains, how companies can position themselves under uncertainty and volatility due to (1) fast pace technological and digital transformation changes, and (2) emerging of revolutionary industries?
When industry conditions change in dramatic ways, and when its environment characterized by high-velocity change, companies are then required to repeatedly adapt their strategies. Previously, strategists were supposed to deal in theories on paper, obliged to “pursue strategies controlled by convenient numerical calculations”, but importantly, they were isolated from the actual results of products production and sales closing. But on the other hand, “opportunities for innovative strategy don’t emerge from sterile analysis and number crunching—they emerge from novel experiences that can create opportunities for novel insights”.
Digital strategies growth, Europe
In today’s technological wave, private businesses are confident about their growth strategies in their domestic markets by focusing on their customers and embracing digital technologies, as well by investing more on digitizing their business, and implementing digital business models.
As can be seen, PwC 2018 survey of 2,447 companies across 31 European countries showed that digital growth strategies are particularly strong among private businesses in Scandinavia and Western Europe and that digitalization represents 30% of the overall companies’ growth strategies in Europe. According to the same study, many companies which are less concerned about digital strategies could lose their competitive advantage if they don’t start considering the impact of digitalization on their businesses and act accordingly../Digital strategies growth in Europe_ challenges and barriers – Digital Transformer_files/saved_resource.html
Re-formation of strategies
For that, and by looking at the “evident needs for strategies re-formation”, we find that companies’ strategies reformation process is theoretically envisioned by the emerging patterns in which according to Mintzberg (1996), such formation might fall under the process of “strategic learning” and “strategic venturing”. A theory which was suggested by Mintzberg, classifying strategy formation into four processes.
On the other hand, such re-formation is confronted with strategical, short-term and long-term barriers. Companies are enthusiastic to optimize their digital sales strategies however, the respondents shy away from the cost of large-scale transformation.
Furthermore, according to a recent study of 2,745 sales managers conducted by “THINK ACT” on the digital future of B2B sales, found that planning digitized sales from a theoretical perspective wastes too much time and in today’s digital world, businesses need fast visible beacon projects. Moreover, the study showed on driving the digitization of sales, high numbers on expectations and low on implementation while more than 65% of the surveyed sales managers believed that the next generation of buyers will place new demands on digital sales. Additionally, companies are not left alone, the European Parliament and of the Council has already started working on a Digital Europe program for the period 2021-2027.
European Commission (EC) digital regulations
In its 2018 regulations amendment report, the European Commission emphasized as a prerequisite of the program implementation on the need to invest in digital infrastructure in order to ensure an appropriate level of connectivity and to benefit from the digital revolution, suggesting for a substantial budget of at least 9.2 billion euro to be ensured at EU level for this purpose . Such programs would tighten the relationships strategically between companies’ digital strategy transformation and the global/regional standardization regulation and investments.
However, the question remains, what does it take to keep a winning strategy evolving? Arthur A Jr Thompson, A J Iii Strickland, and John E Gamble argue that the evolving nature of a company’s strategy is blended on one hand of proactive planned initiatives to improve its financial performance and secure a competitive advantage, and on the other hand of reactive responses to unanticipated developments (i.e. technological transformation) and fresh market conditions.
Download PWC european-private-business-survey-2018
Sources:
Google and Roland Berger GmbH, “The Digital Future of B2B Sales,” 2018, 16.
EY, “Digital Transformation for 2020 and Beyond,” 2017, 1–40.
Michael E. Porter, “HBR’s Must-Reads on Strategy,” Harvard Business Review Product 12601, 1996.
Thompson, Strickland, and Gamble, Crafting & Executing Strategy, 2008.
Henry Mintzberg, Bruce Ahlstrand, and Joseph Lampel, “Strategy Safari Wilds of Strategic Management,” Free Press, 1998, 406, https://doi.org/0684847434.
Google and Roland Berger GmbH, “The Digital Future of B2B Sales.”
Henry Mintzberg, Tracking Strategies Toward a General Theory, 2003.
Google and Roland Berger GmbH, “The Digital Future of B2B Sales.”
European-Parlimant, “The Digital Europe Programme for the Period 2021-2027” 0227 (2018).
Arthur A Jr Thompson, A J Iii Strickland, and John E Gamble, Crafting & Executing Strategy, Sedv 623, vol. 7–8, 2016.
Cedefop, Insights into Skill Shortages and Skill Mismatch: Learning from Cedefop’s European Skills and Jobs Survey, 2018, https://doi.org/10.2801/645011.
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