Digital Transformation: Opportunities And Threats To Business Models And Enterprise Management Systems
Table 1: Positive effects, challenges and threats of digital transformation for enterprises and organisations
| Positive effects | - Rapid automation of production processes;- Shortening of the production cycle;- A new kind of cost chain;- Product quality improved and increased product variety and individuality;- Broadening of product market outlets;- Opportunity for access to world markets, development of new leading and breakthrough markets for goods and services;- Reducing risk in management and eliminating incomplete information in decision-making;- Reduction in paperwork, fewer errors in dealing with documents;- decentralization of decision-making;- increased management efficiency;- job cuts and closure;- improving labour efficiency;- reduction of production costs;- increased profitability;- opportunities to closer cooperation between enterprises and research institutions for innovations included;- transparency, simplicity and timeliness in dealing with the authorities. |
| Challenges and threats | - possibility of concentration of market influence and strengthening of monopolies;- increased competition, reduced entry barriers;- occupation of new markets by multinational industrial corporations;- increasing dependence on champion digital technology companies;- shortage of software developers and IT specialists may cause higher labour costs;- the threat of weakening economic security of enterprises;- insufficient development of relevant institutions;- lack of financial resources, high-interest rates on loans;- more substitute products, an increase in consumers’ opportunities;- the cumulative effect of digitalization may be weaker than expected. |