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Technische Universität München
© Prof. Dr. H. Krcmar
The Digital Transformation -
Challenges and Opportunities
for IS researchers
Prof. Dr. Helmut Krcmar
AIS President 2014-2015
Chair for Information Systems – www.winfobase.de
Vice Dean Informatics – www.in.tum.de
Academic Director EMBA Business and IT – tum.eec.de
TU München – www.tum.edu
Institute for Public Information Management (IPIMA) – www.ipima.de
fortiss gGmbH, München - www.fortiss.org
Co-Founder Initiative Digital Transformation – idt.in.tum.de
Technische Universität München
2 © Prof. Dr. H. Krcmar
Congratulations to
From
Technische Universität München
3 © Prof. Dr. H. Krcmar
founded in 1994
4,128 members in 100+ countries and 36 chapters
(Summer 2014)
• 1751 in Region 1 Americas
• 1218 in Region 2 Europe
• 1169 in Region 3 Pacific Asia
Countries with more than 100 members:
• USA
• China
• Germany
• Australia
• Canada
• South Korea
• www.aisnet.org
AIS serves society
through
the advancement of knowledge
and
the promotion of excellence
in the practice and study
of information systems.
Technische Universität München
4 © Prof. Dr. H. Krcmar
AIS conducts a wide range of activities
• Research
– Conferences: ICIS AMCIS PACIS MWAIS SAIS
– Journals: JAIS CAIS JITTA THCI TRR and more in the eLibrary
– Special Interest Groups: 36 different topics
– Research Conduct Committee: Research code of conduct
• Professional development
– Early career: PhD Consortium, Jr. Faculty Consortium
– Mid Career Workshop: “Tenure? Now what?”
– Late Career: AMCIS 2014 – Panel on late career and retirement issues
– Career spanning: Webinars and Colleges
• Advocacy
– AIS as the Business “STEM” Discipline
– AIS and Accreditation
– Awareness in Industry: Global Sponsors, “AIS Bright ICT Initiative”
Technische Universität München
5 © Prof. Dr. H. Krcmar
What to expect from the AIS now that its 21?
• Continous Improvement from members for members
• Teaching and Undergraduate engagement
– Education committee aims for a teaching materials repository
– 74+ student chapters in all AIS regions with 200+ conference participants
• “Youth” movement: about 1/4 of AIS members are doctoral students
– Support Activities at conferences
• Colleges to support issues that cut across
– IS Women’s Network, Senior Scholars, Academic Leadership
• Member Recognition by Awards
– Doctoral Student Service, Early Career, Continuing Contribution to AIS
As ,,ambassador of the possible” please get involved
Technische Universität München
6 © Prof. Dr. H. Krcmar
6
Technische Universität München
© Prof. Dr. H. Krcmar7
Industry 4.0 Smart Service Welt
Technische Universität München
8 © Prof. Dr. H. Krcmar
What now?
Picture: jokatoons, Ostrich No Solution, fotolia.com
How will you act as a leader if „industry
4.0“ meets „smart service world“?
Either... remain in the board room or
ivory tower?
Or get to the technical details by
yourself again?
Or demand that government policies
guards your business against digital
competition?
Or let someone collect enough data,
you never know if Big Data might make
it some day ?
Technische Universität München
9
Digital Transformation
Technische Universität München
10 © Prof. Dr. H. Krcmar
Digital
Transformation
Explanatory Model Leadership Behavior
Technische Universität München
11 © Prof. Dr. H. Krcmar
Trends – my selection
• Demographic change
• Urbanisation
• Serviceation
• Predictability
 IT-Trends selection aka SMAC
 Social Media
 Mobility & Consumerization
 Analytics / Big Data
 Cloud Computing
 Cyber-Physical Service Systems (CPSS)
 Platform-based ecosystems
INTER-
ACTION
Production
Customer’s
value creation
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Technische Universität München
12 © Prof. Dr. H. Krcmar
Inevitable
Digital
transformation
Explanatory model Leadership behavior
Technische Universität München
13 © Prof. Dr. H. Krcmar
The innovator´s dilemma
• New techniques or business models
get (at the beginning) poorer results
(measured by traditional criteria), but
are usually less expensive (at least
later) and easier.
• Ignoring a disruptive techniques for a
long time can lead to an
insurmountable resistance to change
within the company.
• Openness to disruptive technologies
needs to be the goal of every
company's culture of innovation.
Technische Universität München
14 © Prof. Dr. H. Krcmar
Disruptive innovations often add up over time
Efficient and personalized
communication incl. personal
meetings
Technische Universität München
15 © Prof. Dr. H. Krcmar
Disruption, not immediate destruction enables
innovation and efficiency
time
performance
100%
t1 t2
30%
70%
New 100%
more
&
different
„Don´t confuse slow and
declining with not needed,
unnecessary, not being
reinvented“.
Ginni Rometty,
14-05-2014 FT
Technische Universität München
16 © Prof. Dr. H. Krcmar
Internet-milieus in selected population groups Germany
Source: DIVSI 2013b
Technische Universität München
17 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Digital
transformation
Explanatory model Leadership behavior
Technische Universität München
18 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Papal election 2005
Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Technische Universität München
19 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Papal election 2013
Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Technische Universität München
20 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Papal election 2005
Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
Technische Universität München
21 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Digital
transformation
Explanatory model Leadership behavior
Technische Universität München
22 © Prof. Dr. H. Krcmar
2005: On whom would you lay your bets on?
Founded in 2003
(Tom Anderson)
Founded in 2004
(Zuckerberg et al.)
Founded in 2005
(Dariani/Behmann)
Technische Universität München
23 © Prof. Dr. H. Krcmar
2005: On whom would you lay bets on?
Source: statista.de
Technische Universität München
24 © Prof. Dr. H. Krcmar
2005: On whom would you lay your bets on?
2014: It‘s obvious
2023: ?
Source: statista.de
Technische Universität München
25 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Explanatory model Leadership behavior
Technische Universität München
26 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Service Dominant
Logic
Explanatory model Leadership behavior
Technische Universität München
27 © Prof. Dr. H. Krcmar
Production and value creation
INTER-
ACTIONProduction
Customer’s
value creation
”Value Facilitation”
(Grönroos, 2008)
Production perspective
Added value perspective
“Joint production process: the Customer
participates as co-producer of resources
and processes with the provider”
(Eiglier & Langeard, 1975; Grönroos, 1978)
“Joint value creation process: the Provider
participates as co-creator of value (value-
in-use) with the customer”
(Grönroos, 2008; Grönroos & Ravald, 2011)
Grönroos (2011)
Technische Universität München
28 © Prof. Dr. H. Krcmar
Disruption by Xaas: Release of existing industrial
silos by service ecosystems
• Smart Service World: From business-centric processes through to event-
centered process assistance
• Industry 4.0: From office-centered processes (coordinated centrally)
through to workpiece-centered production (self-organized)
Source:SmartServiceWelt,2014,S.18
Technische Universität München
29 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Service dominant
logic
Ambidexterity
Explanatory model Leadership behavior
30
Innovation process: Exploitation and exploration
Exploitation
Utilization of existing potential in order to ensure
efficient operations.
Refinement, optimization, selection,
implementation and execution
Exploration
Generating alternative potentials to be able to react
more flexibly to changing environmental requirements
Search, variation, risk recording, experimentation,
play, flexibility, discovery and research
March 1991
“It was the best of times, it was the worst of times, ...” Dickens, C. 1859
Technische Universität München
31 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Service dominant
logic
Ambidexterity
Open innovation on
platforms
Explanatory model Leadership behavior
Technische Universität München
32 © Prof. Dr. H. Krcmar
Open innovation from the perspective of platform
Open innovation
(Gassmann/Enkel, 2004)
• Inside-out
• Outside-in
• Coupled-Process
Fit to Service Ecosystems
(Gassmann 2006)
• Reuse
• Knowledge exploitation
• New business models
Technische Universität München
33 © Prof. Dr. H. Krcmar
„My individual service is my commodity”
„My individual service will be assembled through your commodity“
Consumer
Linkage layer
Producer
Effective use of platform for companies
(Efficiency, innovation, strategy, survival, ...)
Efficient advice on the use of and development
on the platform
(Supplier, composition, safety, ...)
Long-term development and maintenance of
reliable, large application environments and
platforms
(Cost-efficient production and delivery, ...)
34
Success of platforms: Governance as part of the operating
model of the technical platform
Legal factors Technical
factors
socio-economic
factors
Competitive factors
Stakeholder behavior
Platform provider
Platform
Third-party
supplier
Consumer
Platform
Platform
Platform
Technische Universität München
35 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Service dominant
logic
Ambidexterity
Open innovation on
platforms
Real Options in the
portfolio
Explanatory model Leadership behavior
Technische Universität München
36 © Prof. Dr. H. Krcmar
1
1
• Management flexibilities: also allows
a partial realization of projects
• Options entitle to, but not obligate to
buy or sell a specified asset for a
payment of an agreed price
Hull (2009)
Picture: www.strategispartners.com.au/real-options-for-tomorrows-growth/
• Expected cash flows are
interest-bearing with the market
rate at the time of investment
• Usually assumes one single
future scenario
From DCF (Discounted Cash flow) … to real options
Technische Universität München
37 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
transformation
Service dominant
logic
Ambidexterity
Open innovation on
platforms
Real Options in the
portfolio
Explanatory model Leadership behavior
Technische Universität München
38 © Prof. Dr. H. Krcmar
Shift of the innovation limit
80s
Today
Competition uber industrial structures
Competition via business models
IT enables the use of Ubiquitous
Computing
Product- und process innovations
process efficiency
Strategic Information Systems
Any use of IT
Smart Service World
Cyber Physical Service Systems
IT/IS ecosystems
IS as platform
IT ecosystems
Proprietary IS
Proprietary IT
Technische Universität München
39 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
Act „Value in use“
Live Exploit & Explore
Speed-on&Stability-in
the platforms
Explore options
Leadership Behavior
Technische Universität München
40 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
Act „Value in use“
Live Exploit & Explore
Speed-on&Stability-in
the platforms
Explore options
Leadership Behavior
Towards a culture of (digital) transformation:
people and technologies matter!
Technische Universität München
41 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
Act „Value in use“
Live Exploit & Explore
Speed-on&Stability-in
the platforms
Explore options
Leadership Behavior
Towards a culture of (digital) transformation:
people and technologies and law matter
Privacy
CyberSecurity
Trust
Principles
Requirements until now
Technische Universität München
42 © Prof. Dr. H. Krcmar
Disruptive platform-based innovation
• Co-evolution in the entire-supply-ecosystem of single
suppliers, solution developers and operators in the service
ecosystem (in multilateral governance structure)
• Co-evolution in the supply-demand-ratio of single suppliers,
solution developers, operators and users throughout the
ecosystem service (for multilateral governance structure)
• Concept-context changes via (Re-)regulation
Technische Universität München
43 © Prof. Dr. H. Krcmar
„new digital life“
“In face-to-face encounters, our interactions are
"private by default, public through effort."
With mediated technologies, the defaults are inverted.
Interactions are
"public by default, private through effort.“
danah boyd 2011. in (co://llaboratory,Gleichgewicht und Spannung zwischen digitaler Privatheit und Öffentlichkeit, 2011, p.
113)
Technische Universität München
44 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
Act „Value in use“
Live Exploit & Explore
Speed-on&Stability-in
the platforms
Explore options
Leadership Behavior
Towards a culture of (digital) transformation:
people and society, technologies and law matter
Privacy and individualized services
CyberSecurity and convenience
Trust by regulation and markets
Principles and discourse
Requirements today
Technische Universität München
45 © Prof. Dr. H. Krcmar
And now ? - a managerial view
• Design smart services
• on platforms existing and new
• in co-innovation with customers, suppliers, and competitors
• in agile steps
• by starting today
Technische Universität München
46 © Prof. Dr. H. Krcmar
And now ? - a managerial view
“Any technology company not focused on speed will be disrupted from its
position. Wal-Mart as a technology company and innovator will be a tale
told on speed.” (Karenann Terrell, CIO Wal-Mart, 2015-May-6)
• Design smart services
• on platforms existing and new
• in co-innovation with customers, suppliers, and competitors
• in agile steps
• by starting today
Technische Universität München
47 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model Research Challenges
Technische Universität München
48 © Prof. Dr. H. Krcmar
Some starting considerations
• You can count innovations only after they are conceived
– and the often come in Singularity
• Reality poses problems
– for those that see them
– it does no pose methods
– IS/IT might be one of the solutions
• Researchers research
– We all have our likes and skills
• IT/IS is an artifact
– which needs to be built and designed, and well to work
based on Briggs, R.; Krcmar, H.: The Simple Elegance of Scientific Inquiry in a Technical Field.
Workshop held at HICSS 2012
Technische Universität München
49 © Prof. Dr. H. Krcmar
The context of IS research has changed
• The IT/IS-artefact is different today than just ten years ago
– the first iPhone was released on June 29, 2007
• People, organizations, and society use IT/IS-artefacts as embedded
tools and do not even call it “computing” anymore
– ubiquitous computing, ambient computing
• The users of today are consumers and organizational IS-users alike
- Any restrictiveness of user interfaces is easilyrecognized
• The companies of today are engulfed in their digital transformation
– AND THE DIGITAL CHALLENGERS ARE EVERYWHERE
Our knowledge is context based
Technische Universität München
50 © Prof. Dr. H. Krcmar
New contexts – new topics – more interdisciplinarity while
„focussing“ on the individual, the organization, and society
Leimeister et al 2014 (DOI: 10.1007/s12525-014-0174-6)
Technische Universität München
51 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
People first, but
holistically
Research Challenges
Technische Universität München
52 © Prof. Dr. H. Krcmar
Outsourcing through the times –
From “Buyer-Beware” to “Expertise-Aware”
• What if the assumptions that informed outsourcing research
over the past decades do not hold (anymore)?
• Today we know
– In mature outsourcing markets client capabilities rather than vendor
capabilities are the primary drivers of BPO performance
– Vendor offerings converge, which requires that clients are flexible and adapt
themselves to the service offerings
• That means
– These Results challenge the assumptions that informed the early outsourcing
research (‘buyer-beware’ framing)
• Which other IS-(Management) knowledge is similarly situated?
Technische Universität München
53 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
People first, but
holistically
revisit&reframe
Research Challenges
Technische Universität München
54 © Prof. Dr. H. Krcmar
What is Design Research?
• Design Research tries to develop Artifacts that fulfill a certain
purpose
• „devising artifacts to attain goals“ (Simon, 1969)
• Design Research can be defined as identifying a unique or
innovative solution for a previously unsolved problem
• Revolutionary
• Evolutionary
• Not intuitive (Briggs, 2006)
Natural and
Behavioral Science
Design
Science
artificial
objects and
phenomena
observe create
Technische Universität München
55 © Prof. Dr. H. Krcmar
What are possible results of Design Science Research?
Theory Theory
(Cause-Effect-Relationships)
Terminology Terminology
(Concepts, language)
Technology
(Goal-Means-Relationship)
Models Methods Systems
Design Theories and Principles
(Goal-Means-Relationship)
Technische Universität München
56 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
People first, but
holistically
revisit&reframe
Design Principles
Research Challenges
Technische Universität München
57 © Prof. Dr. H. Krcmar
Singularity of each Digital Transformation Process
• Singular, context-rich, dynamically complex and situated
– Sometimes all different and revolutionary, sometimes all similar and
evolutionary
• Implementation dominates DT effects
– contexts might be too diverse for contingency based approaches
• Researchers might need
– to act as ethnograpers to explore the details of the technical and
organizational implementation
– to perform documentation to start multicase surveys for EBM
– to design different technological solutions for different organizations
Technische Universität München
58 © Prof. Dr. H. Krcmar
Inevitable
Irreversible
Tremendously fast
Uncertain in the
execution
Digital
Transformation
Service Dominant
Logic
Ambidexterity
Open innovation
on platforms
Real Options
in the portfolio
Explanatory Model
People first, but
holistically
revisit&reframe
Design Principles
Individual dynamics of
transformation
processes
Research Challenges
Technische Universität München
59 © Prof. Dr. H. Krcmar
Now, what could be the impact of DT research
Technische Universität München
60 © Prof. Dr. H. Krcmar
Now, what could be the impact of DT research
• More papers
Technische Universität München
© Prof. Dr. H. Krcmar61
Why do we want to do research?
The holy grail
Practically useful Scientifically useful
Relevatory
Incremental
Originality
Utility
adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What Constitutes A Theoretical Contribution?
Academy of Management Review, 36(1), 12-32.
Technische Universität München
© Prof. Dr. H. Krcmar62
Why do we want to do research?
The holy grail
Practically useful Scientifically useful
Relevatory
Incremental
Originality
Utility
adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What Constitutes A Theoretical Contribution?
Academy of Management Review, 36(1), 12-32.
Technische Universität München
© Prof. Dr. H. Krcmar63
Why do we want to do research?
The holy grail
Practically useful Scientifically useful
Relevatory
Incremental
Originality
Utility
adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What
Constitutes A Theoretical Contribution? Academy of Management Review, 36(1), 12-32.
Technische Universität München
64 © Prof. Dr. H. Krcmar
Now, what could be the impact of DT research
• More papers
• More citations
• Change in the perception of actors (in academia and
practice, suppliers and customers, …)
• New product features, implementation processes, …
• New suppliers (Startups, Spinoffs, Business units, …)
• …
Technische Universität München
65 © Prof. Dr. H. Krcmar
How to go about research in DT
• Technology oriented:
– design theory based research (DSR)
• Organizationally oriented:
– exploratory and confirmatory (work centered) research with
a longitudinal orientation
• Societally oriented:
– „culture changes“ from digital ignorants to digital natives,
from departmental orientation towards process orientation,
– new generations and paradigms come into play, yet it takes
a while to get a hold of those shifts
Technische Universität München
66 © Prof. Dr. H. Krcmar
Unexplained
Effects
Avenuesof
Enquiry
Exploratory
Research
Experimental
Research
Applied
Research /
Engineering
Theoretical
Research
Treatments
Controls
Design
Guidelines
All Modes of Scientific Inquiry
for rigor AND relevance
From: Briggs, R.O., Schwabe, G. (2011) On
Expanding the Scope of Design Science Research. In
H. Jain, A.P. Sinha, and P. Vitharana (Eds.):
Proceedings of Design Science Research in
Information Systems and Technologies: DESRIST
2011, LNCS 6629, pp. 92–106, 2011.
Technische Universität München
67 © Prof. Dr. H. Krcmar
Some Implications
• Collobaration in and with the „theatre of action“
– „in and out of the ivory tower“ with shared data sets
• With many cycles and on many levels over extended time
– „concatenated exploration“ (Stebbins, 2001,p.12)
• with different skills needed for each mode of scientific inquiry
– Methodological plurality and tolerance
• and different pitfalls to avoid for each mode of scientific inquiry
– Often spanning different academic communities
• In research programmes with an overarching question
– „How to make Digital Transformation work“
A non-trivial balancing act over time as research programmes are reality-driven, projects
are funding-driven, publications are outlet driven for each Knowledge nugget
based on individual researcher´s perspectives and motivation instead of just following
generally prescribed research as as craft prescriptions
Technische Universität München
68 © Prof. Dr. H. Krcmar
“Everything can look like a failure in the middle.
Every new idea runs into trouble before it reaches fruition,
and the possibilities for trouble increase with the number
of ways the venture differs from current approaches.”
(Kanter 2001, S. 274).
Ambassadors of the Possible
enjoy, research, and engage!
Prof. Dr. Helmut Krcmar, Dean, TU München, Director SAP UCC Munich
November 11, 2011
SAP University Competence Centers
Educational Service Providers
TUM. The Entrepreneurial University.
“Talents are our assets, reputation is our return“
IDT Initiative for Digital Transformation
An initiative
to analyze, understand and support the design of
leadership, innovation, and motivation
in the Digital Transformation
Co-Founders
Gert Oswald, SAP
Helmut Krcmar, TUM & fortiss
Technische Universität München
70 © Prof. Dr. H. Krcmar
Thank your for your attention

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The Digital Transformation - Challenges and Opportunities for IS researchers - 12th CONTECSI

  • 1. Technische Universität München © Prof. Dr. H. Krcmar The Digital Transformation - Challenges and Opportunities for IS researchers Prof. Dr. Helmut Krcmar AIS President 2014-2015 Chair for Information Systems – www.winfobase.de Vice Dean Informatics – www.in.tum.de Academic Director EMBA Business and IT – tum.eec.de TU München – www.tum.edu Institute for Public Information Management (IPIMA) – www.ipima.de fortiss gGmbH, München - www.fortiss.org Co-Founder Initiative Digital Transformation – idt.in.tum.de
  • 2. Technische Universität München 2 © Prof. Dr. H. Krcmar Congratulations to From
  • 3. Technische Universität München 3 © Prof. Dr. H. Krcmar founded in 1994 4,128 members in 100+ countries and 36 chapters (Summer 2014) • 1751 in Region 1 Americas • 1218 in Region 2 Europe • 1169 in Region 3 Pacific Asia Countries with more than 100 members: • USA • China • Germany • Australia • Canada • South Korea • www.aisnet.org AIS serves society through the advancement of knowledge and the promotion of excellence in the practice and study of information systems.
  • 4. Technische Universität München 4 © Prof. Dr. H. Krcmar AIS conducts a wide range of activities • Research – Conferences: ICIS AMCIS PACIS MWAIS SAIS – Journals: JAIS CAIS JITTA THCI TRR and more in the eLibrary – Special Interest Groups: 36 different topics – Research Conduct Committee: Research code of conduct • Professional development – Early career: PhD Consortium, Jr. Faculty Consortium – Mid Career Workshop: “Tenure? Now what?” – Late Career: AMCIS 2014 – Panel on late career and retirement issues – Career spanning: Webinars and Colleges • Advocacy – AIS as the Business “STEM” Discipline – AIS and Accreditation – Awareness in Industry: Global Sponsors, “AIS Bright ICT Initiative”
  • 5. Technische Universität München 5 © Prof. Dr. H. Krcmar What to expect from the AIS now that its 21? • Continous Improvement from members for members • Teaching and Undergraduate engagement – Education committee aims for a teaching materials repository – 74+ student chapters in all AIS regions with 200+ conference participants • “Youth” movement: about 1/4 of AIS members are doctoral students – Support Activities at conferences • Colleges to support issues that cut across – IS Women’s Network, Senior Scholars, Academic Leadership • Member Recognition by Awards – Doctoral Student Service, Early Career, Continuing Contribution to AIS As ,,ambassador of the possible” please get involved
  • 6. Technische Universität München 6 © Prof. Dr. H. Krcmar 6
  • 7. Technische Universität München © Prof. Dr. H. Krcmar7 Industry 4.0 Smart Service Welt
  • 8. Technische Universität München 8 © Prof. Dr. H. Krcmar What now? Picture: jokatoons, Ostrich No Solution, fotolia.com How will you act as a leader if „industry 4.0“ meets „smart service world“? Either... remain in the board room or ivory tower? Or get to the technical details by yourself again? Or demand that government policies guards your business against digital competition? Or let someone collect enough data, you never know if Big Data might make it some day ?
  • 10. Technische Universität München 10 © Prof. Dr. H. Krcmar Digital Transformation Explanatory Model Leadership Behavior
  • 11. Technische Universität München 11 © Prof. Dr. H. Krcmar Trends – my selection • Demographic change • Urbanisation • Serviceation • Predictability  IT-Trends selection aka SMAC  Social Media  Mobility & Consumerization  Analytics / Big Data  Cloud Computing  Cyber-Physical Service Systems (CPSS)  Platform-based ecosystems INTER- ACTION Production Customer’s value creation 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
  • 12. Technische Universität München 12 © Prof. Dr. H. Krcmar Inevitable Digital transformation Explanatory model Leadership behavior
  • 13. Technische Universität München 13 © Prof. Dr. H. Krcmar The innovator´s dilemma • New techniques or business models get (at the beginning) poorer results (measured by traditional criteria), but are usually less expensive (at least later) and easier. • Ignoring a disruptive techniques for a long time can lead to an insurmountable resistance to change within the company. • Openness to disruptive technologies needs to be the goal of every company's culture of innovation.
  • 14. Technische Universität München 14 © Prof. Dr. H. Krcmar Disruptive innovations often add up over time Efficient and personalized communication incl. personal meetings
  • 15. Technische Universität München 15 © Prof. Dr. H. Krcmar Disruption, not immediate destruction enables innovation and efficiency time performance 100% t1 t2 30% 70% New 100% more & different „Don´t confuse slow and declining with not needed, unnecessary, not being reinvented“. Ginni Rometty, 14-05-2014 FT
  • 16. Technische Universität München 16 © Prof. Dr. H. Krcmar Internet-milieus in selected population groups Germany Source: DIVSI 2013b
  • 17. Technische Universität München 17 © Prof. Dr. H. Krcmar Inevitable Irreversible Digital transformation Explanatory model Leadership behavior
  • 18. Technische Universität München 18 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013 Papal election 2005 Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
  • 19. Technische Universität München 19 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013 Papal election 2013 Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
  • 20. Technische Universität München 20 © Prof. Dr. H. KrcmarPhoto: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013 Papal election 2005 Photo: AP/DPA - Source: Der Spiegel: Digitale Erleuchtung 2013
  • 21. Technische Universität München 21 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Digital transformation Explanatory model Leadership behavior
  • 22. Technische Universität München 22 © Prof. Dr. H. Krcmar 2005: On whom would you lay your bets on? Founded in 2003 (Tom Anderson) Founded in 2004 (Zuckerberg et al.) Founded in 2005 (Dariani/Behmann)
  • 23. Technische Universität München 23 © Prof. Dr. H. Krcmar 2005: On whom would you lay bets on? Source: statista.de
  • 24. Technische Universität München 24 © Prof. Dr. H. Krcmar 2005: On whom would you lay your bets on? 2014: It‘s obvious 2023: ? Source: statista.de
  • 25. Technische Universität München 25 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Explanatory model Leadership behavior
  • 26. Technische Universität München 26 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Service Dominant Logic Explanatory model Leadership behavior
  • 27. Technische Universität München 27 © Prof. Dr. H. Krcmar Production and value creation INTER- ACTIONProduction Customer’s value creation ”Value Facilitation” (Grönroos, 2008) Production perspective Added value perspective “Joint production process: the Customer participates as co-producer of resources and processes with the provider” (Eiglier & Langeard, 1975; Grönroos, 1978) “Joint value creation process: the Provider participates as co-creator of value (value- in-use) with the customer” (Grönroos, 2008; Grönroos & Ravald, 2011) Grönroos (2011)
  • 28. Technische Universität München 28 © Prof. Dr. H. Krcmar Disruption by Xaas: Release of existing industrial silos by service ecosystems • Smart Service World: From business-centric processes through to event- centered process assistance • Industry 4.0: From office-centered processes (coordinated centrally) through to workpiece-centered production (self-organized) Source:SmartServiceWelt,2014,S.18
  • 29. Technische Universität München 29 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Service dominant logic Ambidexterity Explanatory model Leadership behavior
  • 30. 30 Innovation process: Exploitation and exploration Exploitation Utilization of existing potential in order to ensure efficient operations. Refinement, optimization, selection, implementation and execution Exploration Generating alternative potentials to be able to react more flexibly to changing environmental requirements Search, variation, risk recording, experimentation, play, flexibility, discovery and research March 1991 “It was the best of times, it was the worst of times, ...” Dickens, C. 1859
  • 31. Technische Universität München 31 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Service dominant logic Ambidexterity Open innovation on platforms Explanatory model Leadership behavior
  • 32. Technische Universität München 32 © Prof. Dr. H. Krcmar Open innovation from the perspective of platform Open innovation (Gassmann/Enkel, 2004) • Inside-out • Outside-in • Coupled-Process Fit to Service Ecosystems (Gassmann 2006) • Reuse • Knowledge exploitation • New business models
  • 33. Technische Universität München 33 © Prof. Dr. H. Krcmar „My individual service is my commodity” „My individual service will be assembled through your commodity“ Consumer Linkage layer Producer Effective use of platform for companies (Efficiency, innovation, strategy, survival, ...) Efficient advice on the use of and development on the platform (Supplier, composition, safety, ...) Long-term development and maintenance of reliable, large application environments and platforms (Cost-efficient production and delivery, ...)
  • 34. 34 Success of platforms: Governance as part of the operating model of the technical platform Legal factors Technical factors socio-economic factors Competitive factors Stakeholder behavior Platform provider Platform Third-party supplier Consumer Platform Platform Platform
  • 35. Technische Universität München 35 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Service dominant logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory model Leadership behavior
  • 36. Technische Universität München 36 © Prof. Dr. H. Krcmar 1 1 • Management flexibilities: also allows a partial realization of projects • Options entitle to, but not obligate to buy or sell a specified asset for a payment of an agreed price Hull (2009) Picture: www.strategispartners.com.au/real-options-for-tomorrows-growth/ • Expected cash flows are interest-bearing with the market rate at the time of investment • Usually assumes one single future scenario From DCF (Discounted Cash flow) … to real options
  • 37. Technische Universität München 37 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital transformation Service dominant logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory model Leadership behavior
  • 38. Technische Universität München 38 © Prof. Dr. H. Krcmar Shift of the innovation limit 80s Today Competition uber industrial structures Competition via business models IT enables the use of Ubiquitous Computing Product- und process innovations process efficiency Strategic Information Systems Any use of IT Smart Service World Cyber Physical Service Systems IT/IS ecosystems IS as platform IT ecosystems Proprietary IS Proprietary IT
  • 39. Technische Universität München 39 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model Act „Value in use“ Live Exploit & Explore Speed-on&Stability-in the platforms Explore options Leadership Behavior
  • 40. Technische Universität München 40 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model Act „Value in use“ Live Exploit & Explore Speed-on&Stability-in the platforms Explore options Leadership Behavior Towards a culture of (digital) transformation: people and technologies matter!
  • 41. Technische Universität München 41 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model Act „Value in use“ Live Exploit & Explore Speed-on&Stability-in the platforms Explore options Leadership Behavior Towards a culture of (digital) transformation: people and technologies and law matter Privacy CyberSecurity Trust Principles Requirements until now
  • 42. Technische Universität München 42 © Prof. Dr. H. Krcmar Disruptive platform-based innovation • Co-evolution in the entire-supply-ecosystem of single suppliers, solution developers and operators in the service ecosystem (in multilateral governance structure) • Co-evolution in the supply-demand-ratio of single suppliers, solution developers, operators and users throughout the ecosystem service (for multilateral governance structure) • Concept-context changes via (Re-)regulation
  • 43. Technische Universität München 43 © Prof. Dr. H. Krcmar „new digital life“ “In face-to-face encounters, our interactions are "private by default, public through effort." With mediated technologies, the defaults are inverted. Interactions are "public by default, private through effort.“ danah boyd 2011. in (co://llaboratory,Gleichgewicht und Spannung zwischen digitaler Privatheit und Öffentlichkeit, 2011, p. 113)
  • 44. Technische Universität München 44 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model Act „Value in use“ Live Exploit & Explore Speed-on&Stability-in the platforms Explore options Leadership Behavior Towards a culture of (digital) transformation: people and society, technologies and law matter Privacy and individualized services CyberSecurity and convenience Trust by regulation and markets Principles and discourse Requirements today
  • 45. Technische Universität München 45 © Prof. Dr. H. Krcmar And now ? - a managerial view • Design smart services • on platforms existing and new • in co-innovation with customers, suppliers, and competitors • in agile steps • by starting today
  • 46. Technische Universität München 46 © Prof. Dr. H. Krcmar And now ? - a managerial view “Any technology company not focused on speed will be disrupted from its position. Wal-Mart as a technology company and innovator will be a tale told on speed.” (Karenann Terrell, CIO Wal-Mart, 2015-May-6) • Design smart services • on platforms existing and new • in co-innovation with customers, suppliers, and competitors • in agile steps • by starting today
  • 47. Technische Universität München 47 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model Research Challenges
  • 48. Technische Universität München 48 © Prof. Dr. H. Krcmar Some starting considerations • You can count innovations only after they are conceived – and the often come in Singularity • Reality poses problems – for those that see them – it does no pose methods – IS/IT might be one of the solutions • Researchers research – We all have our likes and skills • IT/IS is an artifact – which needs to be built and designed, and well to work based on Briggs, R.; Krcmar, H.: The Simple Elegance of Scientific Inquiry in a Technical Field. Workshop held at HICSS 2012
  • 49. Technische Universität München 49 © Prof. Dr. H. Krcmar The context of IS research has changed • The IT/IS-artefact is different today than just ten years ago – the first iPhone was released on June 29, 2007 • People, organizations, and society use IT/IS-artefacts as embedded tools and do not even call it “computing” anymore – ubiquitous computing, ambient computing • The users of today are consumers and organizational IS-users alike - Any restrictiveness of user interfaces is easilyrecognized • The companies of today are engulfed in their digital transformation – AND THE DIGITAL CHALLENGERS ARE EVERYWHERE Our knowledge is context based
  • 50. Technische Universität München 50 © Prof. Dr. H. Krcmar New contexts – new topics – more interdisciplinarity while „focussing“ on the individual, the organization, and society Leimeister et al 2014 (DOI: 10.1007/s12525-014-0174-6)
  • 51. Technische Universität München 51 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model People first, but holistically Research Challenges
  • 52. Technische Universität München 52 © Prof. Dr. H. Krcmar Outsourcing through the times – From “Buyer-Beware” to “Expertise-Aware” • What if the assumptions that informed outsourcing research over the past decades do not hold (anymore)? • Today we know – In mature outsourcing markets client capabilities rather than vendor capabilities are the primary drivers of BPO performance – Vendor offerings converge, which requires that clients are flexible and adapt themselves to the service offerings • That means – These Results challenge the assumptions that informed the early outsourcing research (‘buyer-beware’ framing) • Which other IS-(Management) knowledge is similarly situated?
  • 53. Technische Universität München 53 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model People first, but holistically revisit&reframe Research Challenges
  • 54. Technische Universität München 54 © Prof. Dr. H. Krcmar What is Design Research? • Design Research tries to develop Artifacts that fulfill a certain purpose • „devising artifacts to attain goals“ (Simon, 1969) • Design Research can be defined as identifying a unique or innovative solution for a previously unsolved problem • Revolutionary • Evolutionary • Not intuitive (Briggs, 2006) Natural and Behavioral Science Design Science artificial objects and phenomena observe create
  • 55. Technische Universität München 55 © Prof. Dr. H. Krcmar What are possible results of Design Science Research? Theory Theory (Cause-Effect-Relationships) Terminology Terminology (Concepts, language) Technology (Goal-Means-Relationship) Models Methods Systems Design Theories and Principles (Goal-Means-Relationship)
  • 56. Technische Universität München 56 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model People first, but holistically revisit&reframe Design Principles Research Challenges
  • 57. Technische Universität München 57 © Prof. Dr. H. Krcmar Singularity of each Digital Transformation Process • Singular, context-rich, dynamically complex and situated – Sometimes all different and revolutionary, sometimes all similar and evolutionary • Implementation dominates DT effects – contexts might be too diverse for contingency based approaches • Researchers might need – to act as ethnograpers to explore the details of the technical and organizational implementation – to perform documentation to start multicase surveys for EBM – to design different technological solutions for different organizations
  • 58. Technische Universität München 58 © Prof. Dr. H. Krcmar Inevitable Irreversible Tremendously fast Uncertain in the execution Digital Transformation Service Dominant Logic Ambidexterity Open innovation on platforms Real Options in the portfolio Explanatory Model People first, but holistically revisit&reframe Design Principles Individual dynamics of transformation processes Research Challenges
  • 59. Technische Universität München 59 © Prof. Dr. H. Krcmar Now, what could be the impact of DT research
  • 60. Technische Universität München 60 © Prof. Dr. H. Krcmar Now, what could be the impact of DT research • More papers
  • 61. Technische Universität München © Prof. Dr. H. Krcmar61 Why do we want to do research? The holy grail Practically useful Scientifically useful Relevatory Incremental Originality Utility adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What Constitutes A Theoretical Contribution? Academy of Management Review, 36(1), 12-32.
  • 62. Technische Universität München © Prof. Dr. H. Krcmar62 Why do we want to do research? The holy grail Practically useful Scientifically useful Relevatory Incremental Originality Utility adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What Constitutes A Theoretical Contribution? Academy of Management Review, 36(1), 12-32.
  • 63. Technische Universität München © Prof. Dr. H. Krcmar63 Why do we want to do research? The holy grail Practically useful Scientifically useful Relevatory Incremental Originality Utility adapted from Corley, K. G., & Gioia, D. A. (2011). Building Theory About Theory Building: What Constitutes A Theoretical Contribution? Academy of Management Review, 36(1), 12-32.
  • 64. Technische Universität München 64 © Prof. Dr. H. Krcmar Now, what could be the impact of DT research • More papers • More citations • Change in the perception of actors (in academia and practice, suppliers and customers, …) • New product features, implementation processes, … • New suppliers (Startups, Spinoffs, Business units, …) • …
  • 65. Technische Universität München 65 © Prof. Dr. H. Krcmar How to go about research in DT • Technology oriented: – design theory based research (DSR) • Organizationally oriented: – exploratory and confirmatory (work centered) research with a longitudinal orientation • Societally oriented: – „culture changes“ from digital ignorants to digital natives, from departmental orientation towards process orientation, – new generations and paradigms come into play, yet it takes a while to get a hold of those shifts
  • 66. Technische Universität München 66 © Prof. Dr. H. Krcmar Unexplained Effects Avenuesof Enquiry Exploratory Research Experimental Research Applied Research / Engineering Theoretical Research Treatments Controls Design Guidelines All Modes of Scientific Inquiry for rigor AND relevance From: Briggs, R.O., Schwabe, G. (2011) On Expanding the Scope of Design Science Research. In H. Jain, A.P. Sinha, and P. Vitharana (Eds.): Proceedings of Design Science Research in Information Systems and Technologies: DESRIST 2011, LNCS 6629, pp. 92–106, 2011.
  • 67. Technische Universität München 67 © Prof. Dr. H. Krcmar Some Implications • Collobaration in and with the „theatre of action“ – „in and out of the ivory tower“ with shared data sets • With many cycles and on many levels over extended time – „concatenated exploration“ (Stebbins, 2001,p.12) • with different skills needed for each mode of scientific inquiry – Methodological plurality and tolerance • and different pitfalls to avoid for each mode of scientific inquiry – Often spanning different academic communities • In research programmes with an overarching question – „How to make Digital Transformation work“ A non-trivial balancing act over time as research programmes are reality-driven, projects are funding-driven, publications are outlet driven for each Knowledge nugget based on individual researcher´s perspectives and motivation instead of just following generally prescribed research as as craft prescriptions
  • 68. Technische Universität München 68 © Prof. Dr. H. Krcmar “Everything can look like a failure in the middle. Every new idea runs into trouble before it reaches fruition, and the possibilities for trouble increase with the number of ways the venture differs from current approaches.” (Kanter 2001, S. 274). Ambassadors of the Possible enjoy, research, and engage!
  • 69. Prof. Dr. Helmut Krcmar, Dean, TU München, Director SAP UCC Munich November 11, 2011 SAP University Competence Centers Educational Service Providers TUM. The Entrepreneurial University. “Talents are our assets, reputation is our return“ IDT Initiative for Digital Transformation An initiative to analyze, understand and support the design of leadership, innovation, and motivation in the Digital Transformation Co-Founders Gert Oswald, SAP Helmut Krcmar, TUM & fortiss
  • 70. Technische Universität München 70 © Prof. Dr. H. Krcmar Thank your for your attention