The Digital Transformation has been structured in three key areas: (i) Customer Experience, (ii) Operational Processes and (iii) Business Models. In this new blogpost, we'll highlight some experiences regarding the key area number three: “Business Models”.
Dear readers, let's accomplish our fourth chapter's journey regarding Digital Transformation. As we have commented before, executives from global companies are digitally transforming three key areas of their enterprises. In this blogpost, we're going to highlight some experiences regarding the key area number three: “Business Models”.
In terms of “drive change”, more than a strong Leadership (we'll explore this topic further), the Digital Transformation requires a refined vision for the parts of the company you want to transform.
Global companies in all industries and regions are experimenting with - and benefiting from - Digital Transformation. Whether it is in the way individuals work and collaborate, the way business processes are executed within and across organizational boundaries, or in the way a company understands and serves customers, digital technology provides a wealth of opportunity. There is no company transforming all 3 blocks at once (Customer Experience, Operational Processes & Business Models), but the best-managed firms are constantly identifying new ways to redefine the way they work in the new Digital Era.
Digital Maturity: How to transform Business Models
Companies are not only changing how their functions work, but also redefining how functions interact and even evolving the boundaries and activities of the firm. The 3 building blocks of this transformation are: Digital Modifications to the Business, New Digital Businesses and Digital Globalization.
3.1. Digital Modifications to the Business
One media executive said: "We've realized that if we don’t transform the way we do business, we're going to die. It's not about changing the way we do technology but changing the way we do business." The company is finding ways to augment physical with digital offerings and to use digital to share content across organizational silos.
A grocery company is staying true to its traditional business but using digital to transform a new growth business. As one executive reported, "After two years, our e-commerce platform is bringing us 20% of our new clients and our traditional clients are consuming 13% more on average." Other businesses are building digital or service wrappers around traditional products: a national post office is creating a free digital mailbox attached to each physical mail address that companies can use as a substitute for a person’s physical mailbox; a business credit company is developing a digital business for some credit products that requires less involvement than their traditional high-touch offerings.
3.2. New Digital Businesses
Companies are also introducing digital products that complement traditional products. For example, a sports apparel manufacturer started selling GPS and other digital devices that can track and report on a customer's workout. Other companies are changing business models by reshaping their boundaries through digital: a mortgage company is moving from being a link in the Value Chain to being a Global Assembler of investment products; an airport authority is aiming to become the owner of a traveler’s end-to-end process by providing an integrated multichannel experience, including information on airplane traffic and reservations, duty-free shopping promotions and other benefits.
3.3. Digital Globalization
Companies are increasingly transforming from multinational to truly global operations. Digital technology coupled with integrated information is allowing businesses to gain global synergies while remaining locally responsive.
These companies benefit from global shared services for finance, HR and even core capabilities like manufacturing and design. Global shared services promote efficiency and reduce risk. They even promote global flexibility: one manufacturer can shift production around the globe with only a few days' notice in response to interruptions or excess demand.
Take-Away
During the last two months we've had the opportunity to explore an amazing and very important question called Digital Maturity and its three main building blocks. I sincerely wish this sequence of blogposts can add some value in your business assignment.
At Processware we’ve created a scalable, flexible, real-time analytics and process digitalization platform that allows you to become a responsive and efficient organization and we’ve deployed it in extremely demanding organizations with serious results & fine tuning in terms of Digital Maturity. You can learn more about it here.
Source: Digital Transformation: A Roadmap for Billion-Dollar Organizations
