Digitization's Influence on Organizational Processes

In this study, we examine the organizational arrangements adopted by legacy firms in the manufacturing sector as they confront the challenges of digitalization. Our conclusions are based on five intensive case studies, developed out of interviews with C-suite executives (primary data) of each firm, and supplemented by documentary evidence. The interviews suggest that firms do not yet share a common vocabulary for digitalization, although data analytics and artificial intelligence form the centerpiece of each firm's view of digitalization. The firms have developed their own mind maps of what digitalization comprises, and it typically encompasses five distinct yet inter-related aspects of the organization beyond traditional IT: Product/Technology management, Process efficiencies in supply chain and manufacturing, Efficiencies in support functions, Customer facing processes, and new business model exploration. Because our sample consists of legacy firms, there is significant appreciation of the organizational change effort required for digitalization to work, and some recognition of the competitive threat presented by born digital firms in their market space. The interviews also underscored the transitory nature of organizational arrangements, the significant interfaces with all other functions in the organization, and the need for CEO engagement for digitization projects to be successful.