Digital, Data and AI Are Finally Coming to Corporate Strategy Activities
Nov 14, 2023
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Explore the impact of digital technologies on corporate strategy, the benefits of core strategy IT software, the changing role of strategy leaders in the digital era, and the potential of digitization and data in corporate strategy.
Digital transformation is revolutionizing corporate strategy by enabling data-driven decision making and maximizing ROI.
The future of corporate strategy includes leveraging proprietary data, blurring boundaries between formulation and execution, and utilizing unstructured data and AI for decision-making.
Deep dives
Digital Transformation of Corporate Strategy
The evolution of corporate strategy involves answering two fundamental questions: Where do we play and how do we win? To support corporate strategy, digitization is crucial. While business and operating models have been transformed by digital advancements, corporate strategy has remained analog. However, this is changing now. The integration of digital technologies, such as big data, advanced analytics, machine learning, and artificial intelligence, is revolutionizing corporate strategy. This digital transformation enables strategists to explore new non-traditional data, make data-driven decisions, and gain an information advantage. Companies are also digitizing strategic planning and execution processes, leveraging technologies that consolidate strategy work and optimize analytical capabilities. These advancements are shaping the future of corporate strategy, making it more continuous, data-driven, and focused on maximizing ROI.
Challenges and Opportunities in Digitizing Corporate Strategy
The digitization of corporate strategy has been slower compared to other functions like finance or IT. The reasons for this slow adoption are varied. One reason is the lack of digital-focused frameworks and approaches in strategic planning. Many existing frameworks were devised before the digital era. Another challenge is the applicability and scalability of digital solutions in strategic planning. Companies question the ROI and effectiveness of digital approaches in a discipline that deals with unique and complex strategic questions. Limited strategic planning resources, including budget and talent, also hinder the digitization of corporate strategy. Finally, culture plays a role, as some organizations and leaders may resist the shift towards data-driven decision-making. Despite these challenges, the prioritization of digitization in corporate strategy is increasing, driven by the potential for better insights, efficiency, and competitive advantage.
Emerging Trends in Corporate Strategy
The future of corporate strategy is being shaped by several emerging trends. One major trend is the increasing importance of proprietary data and analytics for gaining information advantage. As data becomes more accessible, companies need to differentiate themselves by leveraging unique data sources and analytical capabilities. Another trend is the blurring of boundaries between strategy formulation, planning, and execution. Traditional silos are being replaced by more continuous and integrated approaches to strategy, leveraging digital tools and technologies. Additionally, the data landscape is expanding, with a shift towards leveraging unstructured, non-financial data for forecasting, decision-making, and assessing the broader impact of strategies. As digital capabilities and AI continue to evolve, the potential for optimizing strategy execution and decision-making through automation and recommendation systems is also on the horizon. These trends signal a transformation in the role of corporate strategy, emphasizing continuous improvement, agility, and the ability to navigate complex, data-rich environments.
While many aspects of enterprises have undergone digital transformation in recent years, corporate strategy remains painstakingly analog. In this episode, we delve into the ways strategy leaders can use digital to inform and execute their planning processes.
David Akers, a research director in Gartner’s strategy research group, explains how executives can incorporate digital elements, such as big data, advanced analytics and artificial intelligence, into corporate strategy formulation, strategic planning and strategy execution to generate proprietary insights, improve decision making and effectively prioritize the organization’s time and resources.
