New business models and market players through digitalisation

Paradigm shift in the digital age

Competition enlivens the market and is a key driver for companies to innovate. In the digital age, many services can be offered globally, but also locally with a strong focus on one’s target group. Many start-ups are taking this opportunity. Established market pioneers, meanwhile, find themselves reacting to this situation by quickly lobbing new business models and offerings at what they perceive as a threat.

But the key to success is not just a rapid response, but also customer orientation. The main criteria are customer focus, simplicity, and the customer experience, which ultimately means customers will decide whether a company’s digitalisation has been a success. Customer expectations and how they act have changed significantly as a result of digitalisation. For example, they expect aspects that have become standard in one industry to be present in every other industry, too.

Ultimately, entrepreneurial efforts and innovation should be driven primarily by customer expectations, not just sales targets or technology.

Increasing customer orientation among IT managers

US-based market researchers at Forrester have also named this trend of increased customer or end user orientation. This shift has expanded the requirements and tasks that some companies have to fulfil; this applies to IT departments, too. The position of the IT manager as an interface to the customer as well as the necessity of aligning internal processes to the customer’s requirements is shifting the primarily internal focus on IT expertise into a position that is broadly entrepreneurial that has to think and act on matters far beyond strictly IT issues.

While it has always been important for IT managers to be technically savvy, this position now often requires a broader set of skills. In some companies, they need to be able to evaluate customer behaviour based on their expertise, for example on the company’s website, online shop, social media channels, etc. They may need to analyse and process such data for the company to use in developing its strategies. These strategies and the vision behind them as well as the relevant method of implementing them must be clearly and concisely communicated to decision-makers at top management level. The balance between technology expertise, analytical skills and leadership skills, as well as a good level of communicative strengths are now key success factors that IT managers need in order to drive a company forward in a customer-oriented and technology-driven manner.

Conclusion

Trends shape the focus of IT. For a long time, IT departments and infrastructure were organised in a functional way with concepts such as "plan, build, and run" the main nomenclature. "Demand, supply, and governance" has also undergone a long evolutionary phase in IT and shaped IT organisations. Meanwhile, the trend has shifted to a customer focus: in pre-sales, post-sales, service, and maintenance. The customer is the focus and not only in the customer-specific departments. In many companies, IT managers must also be able to devise entrepreneurial strategies from the customer journey and provide suggestions for their technical implementation. And this, of course, is also reflected in the corresponding organisational forms.

Author:

Andreas Wartenberg has been an executive search consultant for more than 25 years, filling management positions in the technology sector and other industries. Mr. Wartenberg set up and led national and international teams before joining Hager Unternehmensberatung as a Managing Director in 2008. He is a leading topic expert in the DACH region in regard to all aspects of technology management and digitalization within all type of corporations. Since early 2015 the Hager Unternehmensberatung has become a partner of Horton International. Andreas Wartenberg is currently Chairman of the Board at Horton Group International.