A digital business model focuses on harnessing digital technologies to create a value proposition.
Digital technologies change how value is created as well as change the outcome of innovation. Because of low cost, global digital infrastructure and the ease with which technologies can be integrated, creating a new and innovative digital business model is within reach of most entrepreneurs.
Products and processes that were once physical are now digital. A newspaper used to be printed overnight and then sent in vans to be sold in newsagents and on streets. Now, the news is digital and fluidly distributed globally in seconds.
Likewise, internal processes in a company were once heavily reliant on paper but now digital enables collaborative and social processes, speeding up decisions and saving time.
But, digitalization is much more than this. Trying to track and analyse things when everything was physical was difficult and sometimes just impossible. Digital technologies are interwoven and code is ubiquitous.
Just about everything can be digitized to generate data. Smartphones, interactions on social media – virtually anything through sensors. As a result, we are now swamped with data.
Development of a digital business model
Despite the proliferation of technology, it is essential to put people at the center of your technology strategy. Digital business models need to be evaluated but it is in the generation stage that modelling needs to be aligned to potential solutions.
Solutions must be assessed as to how they impact your customers, employees, business partners, society or other key constituencies.
A people-centric approach should start with understanding these key target constituencies and the journey they undertake to interact with or support your organization.
Digital technologies enable new forms of interaction and therefore creative visioning and thinking is essential. The boundaries, methods and approaches to business are changing and demand new mindsets to innovate.
