Scenario Planning and Digital Transformation
Digital Transformation and the New Customer
In 2011 the MIT Center for Digital Busines defined digital transformation as "the use of technology to radically improve performance or reach of enterprises." Since then, many companies have struggled to understand this term. One of the problems is that executives and board members alike often see digital transformation in just one horizon.
Many managers see digital transformation only as a collection of technologies that should be implemented. They put too much emphasis on "digital" and very little on "transformation." But in many sectors working on a 3-5 years horizon, as most strategic plans do, is not enough. Suppose customers and the market are changing as a result of digital disruption. In that case, the company will probably have to re-think its business model. But, when dealing with business model innovation, companies must think long term, maybe even very long term. Only then could executives prepare the company to cope with radical change.
Scenario planning, developed in the 60s by Mr. Wack and Ted Newland at Shell Corporation, is perhaps the best tool to help directors and executives think about the distant future. However, few companies use scenario planning. Many do not even know the tool exists and think scenario planning is the use of financial scenarios when it is indeed far from that. Many managers and directors are also uncomfortable at thinking long-term and creating various scenarios.
In this session we will propose a roadmap for digital transformation and explain how scenario planning can help firms achieve long-term transformation.
Prof. Julián Villanueva, Marketing, IESE Business School