The Exploring Digital Framework: A Comparative Case Study within the Swedish Manufacturing Industry

Sammanfattning: Title: The Exploring Digital Framework: A Comparative Case Study within the Swedish Manufacturing Industry Author: Daniel Ögren Supervisors: Carl-Johan Asplund (LTH), Jonathan Bergsteen (Triathlon Group), Fredrik Wadsten (Triathlon Group) Background: As new digital technologies and concepts arise, the inherent meaning of digitalization broadens. Consequently, companies experience increasing complexity of setting digital priorities and successfully carrying through digital initiatives. The working hypothesis of this master thesis is that this problematic situation partially derives from an absence of a tool that allows for exploring, navigating, and structuring organizations’ approach towards becoming more digital. As the Swedish manufacturing industry’s digital agenda seems ambitious but scattered, this industry makes a suitable subject for exploring digital to develop and validate such a tool. Purpose: The purpose of this master thesis is twofold. Firstly, this master thesis aims to develop and validate an explorative framework for digital strategy and digital transformation. Secondly, by applying the explorative framework, this master thesis aims to generate insights considering the digital agenda of the Swedish manufacturing industry. Research questions: The development and validation of the explorative framework itself does not correspond to an explicit research question (RQ) but is rather viewed as an overriding objective. There are however five explicit research questions regarding the Swedish manufacturing industry’s digital agenda: RQ1: What is the current digital state of business? RQ2: What is the digital vision, and what digital priorities correspond to this vision? RQ3: What digital initiatives are currently being pursued? RQ4: What are the digital drivers, and who drives the digital agenda? RQ5: What are the digital challenges? Method: To support the twofold purpose, this master thesis has an abductive approach. The development and validation of the explorative framework require a deductive orientation, while the insights generated by applying it correspond to inductive reasoning. Delimitations: The explorative framework is validated based on a comparative analysis of two large cap Swedish manufacturing companies selected through a convenience sample. Findings: The Exploring Digital Framework is an adequate tool for exploring, navigating, and structuring digital strategy and digital transformation. RQ1: The digital state is lacking. The value proposition consists of physical products, and no substantial digital service offerings are in place. Infrastructure and processes are sophisticated but not necessarily digital. Customer engagement is mostly conventional. There is a feeling of being in digital debt. Digital assessments and benchmarking leads to greater self-awareness of the true digital state. RQ2: The digital vision is harmonized and revolves around connectivity, traceability, servitizing the business model, smart manufacturing, strengthened operational backbones and clarified ownership. RQ3: Digital initiatives are aligned with the digital vision but ranges over various stages of digital development due to discrepant digital states. A digital strategy is guiding in terms of focus and prioritization, and seems to facilitate clarification of ownership, governance, and organizational structuring. RQ4: When ownership is clarified, a chief digital officer (CDO) is the go-to approach for driving the digital agenda. When ownership is not clarified, allocation of responsibility is scattered and decentralized to business unit level. The top five digital drivers, in no particular order, are: (1) New business opportunities and increase revenue, (2) Leaner and more efficient operations, (3) Further strengthen core values, (4) Getting a competitive edge, and (5) Expectations of customers. RQ5: The top three digital challenges, in no particular order, for digital strategy are: (1) Building an adequate digital strategy and enable executional excellence, (2) Avoiding or getting out of digital debt, and (3) Grasping and meeting customer expectations. The top three digital challenges, in no particular order, for digital transformation are: (1) Getting the organization onboard, (2) Realizing and proving benefits and business cases, and (3) Backing up technological advancement with business model reinvention. Theoretical and practical implications and contributions: This master thesis clarifies and extends the vocabulary in the digital sphere of academia. Academia could utilize the Exploring Digital Framework to further explore the digital phenomena. This framework could also be used for educational purposes, for example to solve cases or facilitate discussions within university courses concerning, or in close perimeter to, digital strategy and digital transformation. The Exploring Digital Framework is a digital roadmap. Practitioners could use this framework to structure their thoughts and to explore scenarios for digital strategies, and to bring awareness of the organization’s approach towards digital transformation. The Exploring Digital Framework facilitates focusing of digital efforts and digital prioritization, and could assist practitioners when conducting digital assessments or building digital strategies. Concludingly, the Exploring Digital Framework is a tool for the emerging role of the CDO, used to explore, navigate, and structure digital.