The main goal of this thesis is to thoroughly investigate what digital transformation is and which general success factors exist for businesses. It then collates in a concise way whether and to what extent selected German car manufacturers comply with
these success factors.
"Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road"“ - Stewart Brand
This metaphor skillfully illustrates what happens to businesses that do not take part in technological progression: they get obliterated. In addition, the cycle of new technologies is spinning faster and faster ever since, making it increasingly difficult for
companies to survive and flourish. As evidence for this situation the average longevity of businesses in the S&P 500 index can be adduced. While in 1964, in average, a business would stay 33 years in the index, the duration went down to 24 years
in 2016. It is estimated that this number will be cut in half by the year 2027.
The major force behind this in the recent past is the digital transformation. Just a few years ago it was common standard to rent a movie in a video rental store, buy books at the local book store and to take pictures with analogue cameras. Among
the most famous businesses in these markets were Blockbuster, Borders and Kodak. Nowadays, they are immaterial. The first two filed for bankruptcy and the latter is still trying to salvage itself. All of them share the same fate: they underestimated
the change that came with digital innovations. In their place digital champions now
reign: Netflix, Amazon and Samsung.
If a similar fate would befall the German automotive industry, it would be devastating for the whole economy as over 1.8 million jobs are directly or indirectly dependent on it. In fact, among the four highest grossing companies in Germany 2017
were three car manufacturers. The extreme significance of this industry is evident.
Table of Contents
1 Introduction
1.1 Prelude
1.2 Structure of this paper
2 Definition of terms and concepts
2.1 Digital transformation
2.2 Success
2.3 Success factors
3 Success factors for digital transformation
3.1 Business purpose
3.1.1 Strategy
3.1.2 Business model
3.1.3 Finance
3.2 Customer focus
3.2.1 New markets
3.2.2 Data-driven satisfaction of customer needs
3.2.3 Open innovation
3.3 Information technology
3.3.1 Big data and advanced analytics
3.3.2 Artificial intelligence and deep learning
3.3.3 Digital twin
3.4 Organizational capacity
3.4.1 Human capital
3.4.2 Organization
3.4.3 Business culture
4 Digital transformation at German car manufacturers
4.1 Examined businesses
4.2 Current status of transformation process
4.2.1 Business purpose
4.2.2 Customer focus
4.2.3 Information technology
4.2.4 Organizational capacity
5 Conclusion
Objective and Research Focus
The primary objective of this thesis is to comprehensively analyze the definition of digital transformation and identify general success factors for businesses. Furthermore, it examines the extent to which major German car manufacturers have implemented these success factors within their organizational structures.
- The theoretical exploration of digital transformation and core success factors.
- Categorization of success factors using the Balanced Scorecard framework.
- Evaluation of digital transformation efforts at BMW and Daimler.
- The impact of emerging technologies such as Big Data, AI, and Digital Twins.
- The role of organizational culture and human capital in successful transformation.
Excerpt from the Book
3.3.3 Digital twin
Similar to digital transformation, the term digital twin cannot present a consistent definition as of yet. Therefore, different interpretations will be presented, before brought together.
For General Electric digital twin represents the nexus between a physical and digital system. A haptic system (e.g. machine) gets digitally recreated in a virtual system and sends its information in form of data to its digital twin. Over time the information of several identical machines “about the structure of the system, its operation, and the environment in which it operates” are cumulated. The most important step is then to (automatically) analyze the data using advanced analytics and machine learning – as already shown in previous chapters (3.3.1 and 3.3.2 starting from page 26 respectively 28). General Electric relies on cloud computing capabilities of Microsoft for that – as already mentioned in chapter 3.1.3 from page 15.
This concept potentially helps to detect warning signs and better predict system outages for machines at customers’ sites.
Summary of Chapters
1 Introduction: Provides the motivation for the study by highlighting the rapid obsolescence of companies failing to adapt to technological change, specifically referencing the S&P 500 trends.
2 Definition of terms and concepts: Establishes a foundational understanding of digital transformation, the concept of success, and the methodology behind identifying success factors.
3 Success factors for digital transformation: The core chapter that defines and categorizes success factors into four key areas: Business purpose, Customer focus, Information technology, and Organizational capacity.
4 Digital transformation at German car manufacturers: Applies the theoretical success factors to a real-world analysis of BMW and Daimler, assessing their current transformation status.
5 Conclusion: Synthesizes the findings, confirming that digital transformation is a holistic challenge requiring alignment across all organizational levels, and offers a final assessment of the German automotive industry's progress.
Keywords
Digital transformation, success factors, German automotive industry, BMW, Daimler, Balanced Scorecard, Big Data, Artificial Intelligence, Digital Twin, Customer experience, Open innovation, Agile organization, Business model innovation, Strategy, Human capital.
Frequently Asked Questions
What is the core subject of this thesis?
This thesis examines the concept of digital transformation and identifies the critical success factors that businesses must address to remain competitive in an increasingly digital economy.
What are the central themes of the research?
The core themes include strategic alignment, customer-centricity, the deployment of advanced information technologies, and the necessity of agile organizational structures and culture.
What is the primary research goal?
The goal is to develop a structured framework of success factors for digital transformation and evaluate how selected German car manufacturers, specifically BMW and Daimler, apply these factors in practice.
Which scientific methodology is applied?
The thesis utilizes an extensive qualitative literature review to identify generally applicable success factors, followed by a comparative case-based screening of two major German automotive corporations.
What topics are covered in the main section?
The main section categorizes success factors into four dimensions: Business purpose (strategy, business models, finance), Customer focus (new markets, data-driven needs, open innovation), Information technology (Big Data, AI, Digital Twin), and Organizational capacity (human capital, organization, culture).
Which keywords best characterize this work?
Key terms include Digital transformation, Automotive industry, Balanced Scorecard, Business purpose, Agile organization, and Artificial Intelligence.
Why are BMW and Daimler selected as case studies?
They are chosen because they represent the flagships of the German premium car sector and currently face the pressure of adapting their long-standing business models to threats from tech-oriented competitors like Tesla and Uber.
What role does the 'Digital Twin' play in this study?
The Digital Twin is identified as a critical technological success factor, allowing manufacturers to create a real-time digital connection between physical machinery and virtual models to improve maintenance, efficiency, and predictive quality.
- Citation du texte
- Johannes Schmidt (Auteur), 2018, Success factors for digital transformation, Munich, GRIN Verlag, https://www.grin.com/document/491935
