Why and how agility is needed to handle the Digital Transformation

The Digital Transformation in the sense of the fourth industrial revolution is not comparable with the Digitalization, which characterized the third industrial revolution (Bauer et al. 2014, S. 10). Even though both terms are used interchangeably in the vernacular, there are significant differences. In comparison to the Digitalization the Digital Transformation brings an even higher speed of change, a broader spectrum of change and a vaster impact of change (Vey et al. 2017, S. 2). In short this can be explained with a closer look to what both terms mean in essence. Whereby Digitalization was mainly characterized with the switch from physical to digital (or hybrid) media, Digital Transformation can be seen as a broad and thoroughly automatization (Krapf 2016b). This continuously refined automatization is a result of various technological developments: The internet of things, which enables processes to flow autonomously – not only in factories; cloud computing, with which all data is available anytime and anywhere; big data analysis, which strives to use the exponentially increasing amount of data in order to understand the human behavior – or even predict it; artificial intelligence respective machine learning, which aligns machines of this world with the human (cognitive) skills; as well as augmented respective virtual reality, with which our perception of reality is digitalized increasingly (Seufert et al. 2017).

The impacts of the Digital Transformation on organizations

Those developments within the technological sphere have an unprecedented change impact on organizations. For instance not only the work place but also the content of work changes (Digital Workplace). Additionally, there might be no knowledge worker in the traditional sense anymore because knowledge is ubiquitous. Humans will need competencies that surpass pure application of knowledge in order to add a (complementary) value to the increasingly “smart” machines (Competencies Worker). Not only on the individual but also on the organizational level there will be vast changes. Future business models focus more and more on the specific needs of humans, which transforms most enterprises to service companies (Everything as a Service). Other trends like shared economy or crowd sourcing dissolve strict “organizational borders”. Customers, suppliers or even competitors will be integrated in an organization’s service offering. Hence, it won’t be that evident what belongs to an organization and what doesn’t. The only constant of the Digital Transformation is the increasing pressure for innovation and change within a global tightly connected world (Network Economy). Pressure to innovate and change aren’t a new phenomenon. But the complexity of the tight global interdependencies makes it unparalleled and difficult to handle (Oestereich und Schröder 2017, S. 5).

Exhibit 1: Agility as a response to the Digital Transformation (Krapf 2017a, S. 32)

Agility as a promising but yet to enumerate approach

The response to the Digital Transformation and its immanent complexity can be found in the term agile (Cachelin 2017; Krapf 2016a). Thereby, agility is defined as the ability of an organization to adapt to a complex, volatile and uncertain environment (Häusling und Fischer 2016, S. 30). Such a broad definition makes it rather evident to see Agility as a response to the Digital Transformation. However, neither term nor its application get palpable with it. This might be the reason why agility is such a buzzword in which seemingly everyone finds the solution even though the implicit meanings diverge. Project manager or IT specialist often think about methodologies like Scrum, Kanban or Design Thinking when they talk about agile. Others – especially in HR – might think primarily about the ability of employees to learn and change. And yet others take a systemic approach, where the focal point is the organization as a whole. None of this perspective is wrong but it does not suffice to single out one of it. It is more promising if all of them are taken into consideration to find context adequate leverages. Hence, agile does not only mean an iterative approach like in Scrum or Design Thinking. Agile does not only mean an agile mindset and skills to learn or adapt. Agile does not only mean to handle organization as a whole. It depends on the context which focus and which approach should be emphasized. The illustration below gives a first hint about the action fields to foster agility. Thereby culture is the integrative element because it combines all agile patterns that are practiced within an organization (Krapf 2017b).

Exhibit 2: Action fields to foster agility (Krapf 2017a, S. 33)

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Literature

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