Sorry, you need to enable JavaScript to visit this website.

Digital Business Models for Disrupting Innovation

Digital Business Models for Disrupting Innovation
April 27, 2018

In this blog series, first one discussed need to scan and harness emerging technologies and the second one analyzed the Framework led approach. With this third blog, we conclude our blog series with digital business models and more.

Sustainment is the key

While organizations are running innovation programs in an ad-hoc manner or a radical change, it requires sustenance to ensure the process remains seamless. Forrester Research describes it as “Sustained innovation resides in the band between incremental and radical change. It may be a one-time activity for enterprises because of funding or the cultural shift; the innovation programs do require long-term commitment and radical shift in thought process to succeed”. If the framework itself can be cyclic and leveraged in an automated fashion, it can adapt to a structured governance and cadence structure, and get into becoming much more straightforward. It is advantageous for any enterprise to be on a continuous roll to stay relevant and be effective.

Disrupting Innovation

Every enterprise or consumer has started to evaluate or should evaluate from four core critical aspects on how technology and its evolution will help in changing or making a difference. The maturity index evaluation and value proposition need to be fundamentally dependent on four critical pillars of Strategy, Operational, Tactical and Transformation themes and then aligned with their subsequent price & benefit matrix. The same gets even compared with three card games where they are leveraged for three key asks, i.e., More, The same and Less against the price and benefits.

The value proposition needs to define its use case against the chosen technology, or during the evaluation process itself, since every time the daunting task will be why should one pick the value proposition.

Value

Above is a relatively standard illustration of the matrix of Value Propositions. On the top, we have three Price categories: More, The Same, and Less. On the side, we have three Benefits categories: More, The Same, and Less. So when we assemble a Value Proposition, we are pairing a level of Benefit, with a level of Price. For example, one may choose to take a More of the Same approach, meaning organization is going to offer more features and benefits than other competitors, for the same price. The combinations in the matrix that are green represent the most favourable approaches to take with individual Value Proposition. Those in red are rarely profitable and tend to lead to problems or a loss of focus down the road. The evaluation of emerging technology and trends needs to be presented with a value proposition based on the right scorecard in defining the value of the strategic goals and business benefits.

Technology evaluations are not a onetime exercise; they are a continuous effort

Three categories of digital business models

It is true that digital disruptions adoption needs to have a framework and balanced scorecard approach to find the right fitment. The models are being grouped into three core components as results to pass through the evaluation criteria of multiple factors. The categories and elements could change from business to enterprise to individual entity. It will seek its value proposition against cost vs. value always. As per Cisco Digital Vortex published a report in June 2015 An IMD and Cisco Initiative “The Digital business models can be grouped into three categories: cost value, experience value, and platform value (see Figure 7)”. As industries move toward the center of the Digital Vortex, physical components (to the extent that they inhibit competitive advantage) are shed. Whatever can be digitized is digitized. The components of digital value can then be readily combined as disruptive business models that knit together different types of capabilities and deliver customer value in new ways. The most successful disruptors of recent years—Amazon, Apple, Facebook, Google, Netflix, and others—employ what we refer to as “combinatorial disruption,” in which multiple sources of value—cost, experience, and platform—are fused to create disruptive new business models and exponential gains.

Business

Conclusion / Summary

Technology evaluation is not a one-time exercise; it is a continuous effort and push of enterprises to ensure relevance and adding value to the business. For an enterprise’s current technology and business landscape assessment is the starting point to evaluate the maturity and competency. An enterprise needs to evaluate the business models from the three components to stay relevant and sustain in tomorrow’s world through multiple sources of value, experience and platforms they provide either to end users or to business. Interestingly in one of the posts by PWS strategy&, it is laid out well in ten steps of thought process which is very much applicable to the evaluation process.

Summary

An assessment enables enterprises to understand their current state, identify their target state and define the actions needed to progress to the desired levels of competency. Innovation leaders, evangelist & enterprise architects, should regularly use the evaluation process to conduct the assessment of innovation and emerging trends using a seven-step process.