How Digital Transformation Affects Large Manufacturing Companies’ Organization

In light of emerging digital technologies, executives across industries are rethinking their companies’ business models and organizational structures. To meet future customer expectations, large manufacturing companies in particular are challenged to integrate two distinct worlds: the physical world (i.e. the design, production, and maintenance of complex hardware products) and the digital world (i.e. software, data analytics and digital services). Large manufacturing companies often possess various business units, a diversified business model portfolio, and complex IT landscapes including traditional, embedded, and digital IT types. Hence, they face specific organizational issues, which so far have only received limited attention among professionals. Based on 16 in-depth expert interviews with companies across the Internet of Things (IoT) ecosystem, we have identified six main issues regarding how digital transformation will affect large manufacturing companies’ overall organizational structure.