A business model is how a business makes money, however the devil is the details. With the advent of new market disruption by upstarts with new or unique business models leveraging digital capabilities, there is a surge in activity inspecting business models. It is more important today to evaluate your business model for digital opportunities in a proactive mode. This is an imperative in a shifting sands world where there are technology advances plus environmental, legal and competition changes. In this writing, I'd like to highlight ten areas of your business model that could benefit from an inspection and the potential application of new digital methods and technologies.
It is pretty obvious that organizations can't survive without customers. Targeting the right groups to serve is crucial. Digital can assist organizations to reach and serve new groups with new and lower cost alternatives
The bundle of products or services is why customers select your organization over others. Digital can make your bundle be more attractive and compelling. In fact, digital can make your bundle appear more innovative and could be a disruptive force in your market place.
The way your organization reaches customer segments with your value proposition is a channel. Digital offers new ways to reach awareness of your organizations products and services. Delivering your value proposition in a unique and helpful way is something that digital can do.
If you treat your customers like gold and they feel you are interested in their needs and perspectives before and after the sale, you are likely to retain customers and sell them more value. Digital can go beyond customer data to real customization around their journeys; not just your profits and standard interfaces.
Pricing your products and services is always a key activity. With the advanced analytic capabilities that digital delivers, accurate and real time pricing is now available. These one time payments can be made into reoccurring revenues with the help of digital.
In order to make a business model work, resources have to be selected, managed and optimized. With the advent of digital, existing resources can measured and optimized in real time. In fact resources can be optimized in the light of all the contexts they participate in to create a balanced optimization. Digital offers new connections and new digital resources (bots & sensors). This brings benefits and complexities.
These are the important activities and tasks that must be managed well to make the business model work. This requires a dynamic assemblage of resources, data and sequences to accomplish important outcomes. The proper orchestration of resources can be enhanced and optimized by increased digital presence.
Partners are essential participants in creating desired outcomes in the business value chain. These relationships can be enhanced by digital through shared control over policies, resources and instant visibility for all parties.
The cost structure describes the important costs incurred through operations of the business model. Today cost structures are pretty brittle. With digital, not only can there be cost savings in the cost structure, but the structure can by dynamic and predictive in new ways.
If culture is a way of life of a group of people that includes behaviors, beliefs, values and representations they accept, live and communicate in their actions, then it is important to inspect it as a multiplier of your business model. This can be positive or negative when digital change is added to the mix. Just selecting a portion of the business model that gets a digital assist or makeover isn't enough. Assessing your culture for implementing business model change and how digital can help, will be an important step.
Not checking your business model for digital impacts is a risky proposition. Selection of business model components to change can also be risky, if not managed properly. Making digital a positive force that can be exciting and fun is the way to attract the people in your organization that like or can deal with change. For those who can't or won't, additional incentives may have to be considered.