The recently launched DIGIT Lab is a Next Stage Digital Economy Research Centre led by Exeter INDEX. Together with academic partners, the University of East Anglia and Oxford Brookes University, and over 20 industry partners, the centre is working with Large Established Organisations (LEOs) to understand the barriers to driving change and improving productivity through digital transformation.
Alan Brown, Executive Director at INDEX, looks at the challenges of digital transformation and how the DIGIT Lab will look to foster innovation and develop solutions.
The impact of digital
The past two decades have seen intense focus across all organisations to address the opportunity and the challenges of using digital technology. It has changed how they operate, automating and accelerating day-to-day activities and often revolutionised the nature of the products and services they deliver to be more virtual, personalised, and responsive.
However, for many organisations this transition is taking a heavy toll. For Larger Established Organisations (LEOs), specific tensions have been building up as they shift toward increased automation, faster decision-making cycles, and more responsive market-led strategies.
Rethinking the digital transformation, they are undergoing has become a central focus to their strategy and success. LEOs are littered with technology-led change initiatives, agile delivery squads, experiments with new business models, pilot use of cloud-based services, and lots more. Yet the current studies say that executives in LEOs are as confused as ever about how they bring these activities together, at scale, to effect meaningful results.
The data confirms that LEOs are experiencing a growing gap between the state-of-the-art use of digital approaches in small silos, and the predominant state-of-the-practice across large parts of the organisation. To the extent that this is threatening their continued sustainability in markets being redefined by faster-moving competitors.
Addressing these challenges is not only a problem for the individual organisations themselves. It has repercussions for the national and the worldwide economy. In the UK, LEOs (defined as firms with over 250 employees) account for over 60% of employment nationally. They also include Government agencies responsible for national institutions and infrastructure, and Third Sector groups playing a critical role in maintaining the social fabric of the country.
Impact of COVID
Seen through the eyes of a pre-COVID world, digitally mature organisations were already beginning to view digital transformation as not just an internal technology infrastructure upgrade, but also an opportunity to move costly in-house capabilities to the cloud, and to shift sales and marketing to online multi-channel provision. Digital modernisation programmes taking place across many organisations were aimed at accelerating the digitisation of their core assets, rebalancing spending toward digital engagement channels, fixing flaws in their digital technology stacks, and replacing outdated technology infrastructure with cloud-hosted services.
The focus today, with the benefit of hindsight of the past year of rapid change, is a more fundamental revamp of business practices, a realignment of operations toward core values, and a stronger relationship between stakeholders, partners, and consumers. Beyond technology replacement activities, many organisations are rethinking all aspects of their business models: which customers they serve, what those customers value, which channels are most appropriate to reach them, how costs can be managed more effectively, where to compete and who to partner with. Digital technology has been both a foundation for sustaining business through times of massive disruption, and a mechanism for transformation in business strategy as we plan for growth.
Shaping the DIGIT Lab Approach
The DIGIT Lab launched in March 2021 with the aim of investigating how to accelerate digital innovation to transform the operating practices and future strategies in LEOs. The goal is to bring an open, coordinated approach to the digital opportunities and challenges, to maximise the impact of previous digital economy research outputs, and work with a broad community of academics, practitioners, and policymakers to deliver new research insights.
A key aspect of its focus is the way it will carry out its research. In co-design meetings with DIGIT Lab partners, a very strong sentiment was expressed that research cooperation between academic and industrial partners is too frequently ineffective and mis-directed. The gap between academic theory and industry practice too difficult to bridge. The DIGIT Lab will ensure research is taking place “in” and “with” business, and not just being directed “on” or “at” business. This has several fundamental consequences on the DIGIT Lab approach:
- Building on business partners’ investments in testbeds and demonstration labs as essential coordination points for understanding and driving investigations.
- Using action-based methods focused on meaningful change iterations and taking agile approaches to adapt them to different domain contexts.
- Embracing cross-disciplinary, multi-stakeholder challenges focused on impact and measurable outcomes.
There are interesting times ahead. We are looking forward to building momentum with this ambitious, collaborative programme of work. As we get moving, we’d welcome your input, experiences, and support. There are opportunities to join our community, contribute to specific workstreams, and to collaborate with our researchers and partners.
Professor Alan Brown is Professor of Digital Economy from the Initiative in the Digital Economy at Exeter (INDEX) at the University of Exeter Business School.