Digital business is an overarching theme that covers how the blurring of the physical and virtual worlds is transforming business designs, industries, markets and organizations. The continuing digital business evolution exploits new digital models to align more closely the physical and digital worlds for employees, partners and customers. Technology will be embedded in everything in the digital business of the future. Rich digital services will be delivered to everything and intelligence will be embedded in everything behind the scenes.

More and more CEOs are being challenged by customers and their boards of directors to make digital business change happen. Deep transformation can only be enacted at scale if it is systematically driven. There are four important steps: defining what digital means for your business, aligning it to the specific type of growth sought in your economic model, setting the primary success metric to keep check of progress and deciding which key performance indicators (KPIs) must change to make the progress happen across the business.

What do IT executives need to keep in mind when it comes to digital business transformation?

  • As digitalization matures, participation in digital ecosystems increases, making the enterprises more digitally interdependent. CIOs must prepare for this transition.
  • Information and analytics skills gaps persist; basic skills too are in short supply as the move to digital ecosystems changes the required IT capabilities. Take steps to mitigate these shortages.
  • Understanding business priorities and applying value disciplines to inform management and execution is foundational to transition to digital ecosystem participation.
  • Though ecosystem participation can take different forms — providing or co-creating an ecosystem, selling or buying through one — an ecosystem creates value by supporting business models that enable participants to achieve performance superior to businesses that operate independently. Likewise, ecosystems enable public-sector agencies to gain efficiency dividends and deliver a superior citizen experience.

Why are digital ecosystems important for IT executives?

Gartner predicts that by 2020, more than 30 billion devices will be connected to the internet. The advent of digital business expands and evolves the opportunities, threats and constraints of leveraging a business ecosystem. A digital business ecosystem is a marketplace of functions and information. It is a network construct whereby multiple value forms are exchanged for the benefit of all participants. Business ecosystems can help develop and sell products and complement existing services and capabilities. They also can directly impact business operations, including the use of cloud, IoT, mobility and business analytics.

What are the five major technology platforms digital business needs?

The platforms that support digital business will need to evolve to maximize the economic value of connections. Digital business will require a looser ecosystem that encompasses a broader set of technologies. The shift to ecosystems (and the highly collaborative nature of them) means a business model with multiple actors playing multiple roles. These ecosystems become the DNA of a digital society that connects and impact every individual, family, community, state, organization, government and country. The technology now available, and explosion of ecosystems enabled by technology, is interconnecting this small planet. The five major technology platforms digital business needs are:

  • Information systems platform
  • Customer experience platform
  • Data and analytics platform
  • IoT platform
  • Ecosystems platform

Expert Q&A with Don Scheibenreif, Distinguished VP Analyst

Q: How has this topic evolved? That is, any major changes in the market? Changes in strategy? Changes in technology?

A: Digital transformation is one of the hottest topics at Gartner right now. We continue to sharpen our definitions of what digital transformation really means. The term is broadly used by technology firms, consulting firms and agencies. It seems that every digital project is considered digital transformation. It is confusing. One of our biggest opportunities is to continue to help client organizations develop what we call “digital ambition” — having a clear vision of what digital technology and digital business means for the future of the organization. We will continue to share best practices of how organizations are overcoming barriers to digital transformation.

In strategy, 62% of CEOs tell Gartner they have an initiative in place to make their organizations more “digital.” In technology, CIOs tells us they have strong interest in advanced analytics, artificial intelligence technologies, blockchain, cybersecurity, conversational platforms and the Internet of Things. 

Q: What’s one of the biggest mistake organizations make when it comes to this topic?

A: Not being clear on what they mean by digital transformation. Are they looking to their digital strategy to help them use technology to improve their existing business model — digital optimization — or are they using technology to help them create a new business model or new public services that otherwise could not exist without those technologies — digital business transformation?

Q: How are IT leaders leveraging this topic to transform their organizations?

A: More and more of our IT clients are helping their organizations have the tough conversations on what digital means for the enterprise — either as a catalyst or partnering with the executive team. They are also evolving their IT organizations and core technology platforms to provide better enterprise agility to take advantage of digital opportunities. Some are even creating cross-functional, cross-enterprise digital teams to identify, develop and scale digital initiatives that lead to growth. 

Q: Finish this sentence: If organizations don’t get their digital transformation right, they will …

A:  … be destined to just have a collection of digital projects.

Hot topics covered at Gartner IT Symposium/Xpo™ will include:

  • Scaling digital business
  • I&T operating model
  • Digital KPIs
  • Digital society
  • Ecosystems
  • Willful disruption