Executive Briefing
Topic #1 – Business Issues
Managing the Digital Firm
Michael Fine
ISYM-540 –Summer Session 2
Current Topics in ISYM
July 3rd, 2009
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Beyond the full-service advertising and marketing communications that most
companies focus their discipline on, the Digital Firm, is going to be the common name
for an organization. Companies that have assistance from a Digital Firm, which can be
anything from a main company, sister company or third party organization, will be able
to concentrate on delivering their products and services. Defining the digital firm is
subjective because of the range of expectations to become a digital firm, and the process
to identify whether a firm has been successful in transitioning into a digitized state. A
company transitioning to a digitized firm will release the worry of designing strategy,
corporate/ financial, brand marketing, technology, healthcare, employee relations, media,
public affairs, crisis management, advertising, Internet development and integration.
Digital Firms help companies remain competitive even though there is a line separating a
departmental function. You can identify this line when looking at how a production
department is totally separate from finance or the difference between human resources
and manufacturing, just because HR does the hiring for the manufacturing function, it
does not directly connect to the manufacturing department. Although these different
department functions are important and are the building blocks of a company, they must
remain separate and well managed for a company to remain competitive.
As mentioned earlier, the lines between departments create barriers within an
organization. The transition to a digital firm erases that barrier and allows a company to
maintain competitive advantage. When managing the Digital Firm you can have a handson view the barriers that can be crossed between department divisions and information
that is distributed across those divisions to clients and communities. The driving forces of
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remaining competitive, is when a company makes technological advances towards their
infrastructure and how they manage their infrastructure.
The Digital Firm can manage infrastructure and create technological advances by
using the Internet. The Internet can provide those technological advances by instantly
connecting, the Digital Firm to client from client to Digital Firm, to fulfill business needs.
The Internet has claimed to be the perfect vehicle for new information infrastructure and
should be the required hierarchy for the transitioning firm because of its open standards
and structure. They’re very few products like the Internet that have been created to allow
an organization to erase the lines between divisions and distribute information to anyone
and everyone. It is hard to say that other technologies can compete with the unique
Internet environment. The Internet is cheap, easy to use, and a great solution for
connecting people together. A business that would utilize the Digital Firm, would use the
Internet as its’ main infrastructure to connect customers, suppliers, and employees of an
organization.
It would be a best practice for a firm to stay traditional and digital, not to become
a totally digitized company, it is unnecessary for a firm to change into a complete digital
firm. By going completely digital you are being hosted on the Internet, so you have the
disadvantage of losing connectivity. It is possible for a business to lose its’ connectivity
because of failing hardware such as; servers, switches and routers. Additionally a digital
firm can be risky to some companies because of the massive amount of resources used
including financial, manpower and technological. Any full-service company strives to
gain vastly in profits, market shares, and reduction in overhead costs, so that being
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mentioned a solid strategy to reduce risk needs to be clearly defined for management and
later implemented. When a company is looking to go digital, managers within an
organization must look at their customer base and question how to best serve that
customer base. In many areas the Internet is an effective way to provide quicker service
time to customers, aid in the selling process, and improved business functions. However,
the degree to which the Internet is employed in a firm's operations is strictly reliant upon
the nature of the customer base of the firm.
There are always ways to improve operations but digitization should not be
sought after just for the sake of transitioning to the digital firm. There should be an
overall plan for the digitization and long term goals should be set based on management’s
understanding of the business, the marketplace, and how the Internet can bring those
things together. When the Internet provides long-term results, company managers will
witness the competitive advantage of business and the Internet together. With that
information managers can make better decisions about how to utilize the Internet in its
operations.
An example of a company that understood the importance of management in the
Internet was General Electric.
“GE is a global infrastructure, finance and media company taking on the
world’s toughest challenges. From everyday light bulbs to fuel cell
technology, to cleaner, more efficient jet engines, GE has continually
shaped our world with groundbreaking innovations for over 130 years.”
-
See, GE Company
GE understood the importance of the Internet and how to properly implement the
tool to reduce cost, improve customer relationships and improve profitability. Planning is
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a major factor during a digital implementation, managers need to understand that plans
don't always go as planned and the Internet is no different. It is important for companies
to keep up with the latest technology and consumer habits because the two can often be
used in the digital cycle to create better relationships between the firm and its customer.
When any company achieves a better relationship between the firm and its
customer, they are maintaining their competitive advantage that you would normally see
with your traditional company. In summary, there should be a balance within the
organization between the traditional company and a transitioning digital company. The
risk level will be essentially lower and the organization will stay current with the latest
technology and consumer trends, if implemented properly the company will be profitable
and will eventually release the strain on financials, manpower and technology. Releasing
the strain of various amounts of business functions is not just great for the firm but for the
consumers.
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Sources
“Can GE Remake Itself as a Digital Firm?” studentwebstuff.com 02 September
2003. 01 July 2009
http://www.studentwebstuff.com/mis/documents/661/MiniCaseStudy.pdf
“Are you on Digital time?” fastcompany.com 11 December 2007. 01 July 2009
http://www.fastcompany.com/magazine/22/digitime.html
“Our History” ge.com 2009. 03 July 2009
http://www.ge.com/company/history/index.html
“Burson-Marsteller launches digital firm” prweekus.com 16 June 2009. 01 July
2009
http://www.prweekus.com/Burson-Marsteller-launches-digitalfirm/article/138564/
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