There is an increasing need for companies to gain insights into what is actually happening around them and where value can be created and captured. Linear value chains have in many cases been replaced by complex, interdependent and dynamic relationships between multiple sets of actors in different industries, different parts of the world, using different business and revenue models.
The increased turbulence creates threats and opportunities for organizations to respond to and quickly reconfigure its business models and with that its different roles in relation to external actors. To capture opportunities more quickly than rivals do, organizations must have agile business models and constantly analyze where value can be created and captured.
An intricate network of roles and relationships
The value network surrounding an organization comprises of different stakeholders and organizations (nodes) that have an effect on the outcome of the organization's activities. Between the nodes are different forms of formal and in-formal relationships connecting the nodes, forming the network. In contrast to linear value chains and One-Sided Business Models, such as buying ingredients to sell lemonade on the driveway, the number of different actors having multiple roles creates an intricate network of roles and relationships.
Nodes with multiple roles
One actor in the value network can simultaneously be a value provider (e.g. out-licensing important technology, co-educating customers, partner in working towards establishing a standard, co-developing new technology, supplier of services, providing user data), a value recipient (e.g. in-licensing technology, buying products and services, having access to process knowledge and technical know-how, benefiting from complementary products and services), a value neutral (e.g. competing with similar products and services, providing substitute technology, products or services, non-connected experts, authorities and regulators, standardization bodies). Additional to the complexity of nodes having multiple roles is that roles, relationships and business models are constantly changing.
Different business and revenue models
Each of the actors in the value network has its own business and revenue models and actors outside the industry may at any time enter with business models disrupting the whole industry, such as Apple entering the music industry or Google entering the navigation technology industry. Organizations need to constantly monitor actors in the value network, at the edges of the industry and potential outside actors that could for example provide something at a much lower cost or even for free. A good question to ask is what an industry outsider would do to take advantage of the weaknesses in existing value network and business models? Some examples of potentially disruptive business models:
Give away or subsidize hardware to sell software or services
Give away or subsidize software to sell hardware or services
Give away or subsidize services to sell hardware or software
Give away one version of the hardware, software and/or service to sell another
Give away or subsidize hardware, software and/or services, supported by advertising
Give away or subsidize hardware, software and/or services, sell access to 3rd party
Mapping the value network
To understand the value network, an organization should for every value proposition map out each and every actor that could have an effect on the outcome. This should initially be done as broadly as possible generating a very long list of actors. Different approaches can be used to identify actors such as:
Roles in relation to one’s own organization "all suppliers, partners, competitors, customers, substitutes…"
Type of organizations "all incumbents, SMEs, start-ups, research institutes, university research groups, governmental organizations…"
Different forms of activities or expertise "content idea, content creation, publishing, distribution, content aggregation…"
The next step is to categorize each actor in the list to make it more manageable. This can be done in the style of a mind-map or in Excel lists that are perhaps more easy to sort and filter. The way to categorize and group actors is very situational specific and the approaches above can be used as a starting point.
Analyzing the value network
It is important to understand how value is converted from one form to another across the value network. Ideally each actor and relationship should be analyzed and a starting point is to analyze each group of actors and each identified key actor:
How do value move through the network?
Where are the bottlenecks?
Who are benefiting from whom?
What values are provided from each actor?
Who are the main value creators?
What are their objectives and strategies?
Where are the unique assets and capabilities?
How well are assets being used?
How well are the values being realized?
Who are the main value recipients?
What do the value recipients need to compromise?
What social value or cost is generated by each actor?
Where are the main costs and risks of each actor?
With an understanding of the value network the next step for an organization is to analyze its own position in the value network.
Analyzing one’s own position
Based on the value network analysis the organization can start evaluating its own situation and different alternatives for adjusting its position in the value network:
What roles and relationships is it dependent upon?
What are the value propositions (including benefits) it provides to other actors?
How are different external offerings affecting own value propositions?
What are the financial and non-financial transactions in these relationships?
How will success increase other actors' success and vice-versa?
How will the organization enable other actors to win versus their competition?
How can it change the game to its own and others advantage?
How will its position evolve over time?
Positioning through strategic moves
Based on the existing and sought for position, the organization can then use strategic moves to affect identified actors, formulate alliances and partnerships and change its business models, to manage the value network:
Who to collaborate with, for what purpose, in what form?
What to bring to the table and what to expect from the collaboration?
What actions to take to affect other organizations or relationships?
How to adjust value propositions and business models?
Turning turbulence into an advantage
To understand the current and future capability for value creation, it is essential for every organization to understand the surrounding value network and how value is converted from one form to another across the network, and adjust its business models accordingly.
Opportunities arise from strategic moves and from pure luck. The challenge is for organizations to have agile business models to be able to act on these opportunities. I believe that organizations that really understand their different roles and surrounding value networks can turn the turbulence into an advantage.
2Describe the benefits of marketing to the organization, its interested parties, and society.
3Explain the marketing process.
Marketing Defined
When you ask a group of people, “What’s marketing?” most people will answer “advertising” or “selling.” It’s true that both of these functions are part of marketing, but marketing is also so much more. The American Marketing Association (AMA) defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”6That’s kind of a mouthful, so let’s see if we can simplify it a bit.
At its most basic level, marketing is made up of every process involved in moving a product or service from the organization to the consumer. It includes discerning the needs of customers, developing products or services to meet those needs, identifying who is likely to purchase the products or services, promoting them, and moving them through the appropriate distribution channels to reach those customers. Marketing, quite simply, is about understanding what your customers want and using that understanding to drive the business.
Marketing can also be defined as the set of activities involved in identifying and anticipating customer needs and then attempting to satisfy those needs profitably.7But what does that really mean? Let’s break down that definition:
Identifying customer needs. This is typically where marketing research comes in. Methods of marketing research will be covered in a later chapter, but market research helps a company develop a detailed picture of its customers, including a clear understanding of their wants and needs.
Anticipating customer needs. After analyzing the data collected, marketers can predict how products might be changed, adapted, or updated.
Satisfying customer needs. If marketers have done their homework correctly and clearly understand their customers’ needs, consumers will be pleased with their product purchase and will be more likely to make additional purchases.
Profitably. Profitability is a relatively simple term; it’s when a company’s revenue is greater than its expenses. In terms of marketing, the road to profitability means adding value to a product so that the price customers pay is greater than the cost of making the product.8
MARKETING IN PRACTICE
Reconciling Segmentation and Diversity
We live in a multicultural world where diversity, equity, inclusion, and belonging (DEIB) is no longer the “right” thing to do; rather, it’s imperative. This is particularly true in marketing, because as the consumer population diversifies, brands have to authentically reflect a wide range of backgrounds and life experiences in order to effectively connect with consumers. Therefore, marketers must increasingly respect individual preferences, celebrate differences, and promote customization of products and services to meet customers’ needs, wants, and preferences.
At the same time, to profitably produce and sell a viable product or service, marketers must identify potential customer groups and types with certain characteristics in common—i.e., market segmentation. Segmentation requires assigning individuals to predefined categories with predictable behaviors, based on standardized assumptions.
How does segmentation differ from stereotyping? How can segmentation support diversity?
Read the following articles to further explore these nuances:
How Marketing Benefits the Organization, Its Interested Parties, and Society
Before we go on, let’s consider all the people and groups that an organization needs to consider and serve. Interested parties are those persons or entities that have an interest in the success or failure of a company. These parties can be categorized into two types: internal and external, as shown in Figure 1.2. You may see these people and groups referred to as “stakeholders” in business writing and other media.
Figure 1.2Types of Interested Parties (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Internal interested parties are entities that reside within the organization and that affect—or are affected by—the actions of the company. These entities include employees, owners, managers, and investors (shareholders). When we think about marketing, marketers often tend to look outward. They build strategies to engage customers and show them what the company has to offer.
You might think that marketing would be primarily directed toward those outside the company, like customers, but marketing is also directed toward internal groups. Internal marketing involves promoting the objectives, products, and services of a company to its internal constituents—particularly employees.9
Think about a recent interaction you have had with a business employee. It could be the server who took your order at lunch or the sales associate at a big box store who showed you the features of the new laptop you were looking to purchase. Which interactions left you with a positive experience? Chances are that your evaluation of the experience is based on the interaction you had with the server or sales associate. That’s a function and benefit of good internal marketing, employees who are motivated and empowered to deliver a satisfying customer experience.
External interested parties include those outside the company, such as customers, creditors, suppliers, distributors, and even society at large. External groups don’t have a direct say in the company’s decision-making process. However they are vital to the success of the company because companies can only succeed with the support of others.
How does marketing benefit external parties? First, consider what marketing does for consumers. It draws out their needs, creates new demand, locates untapped opportunities, and determines the possibilities of selling new products. Second, marketing creates form, time, place, and possession utilities for the company’s goods and services. Utility refers to a product’s usefulness to customers so that they are convinced enough to make a purchase. In other words, when you hear “utility” in marketing, think “usefulness to customers.”
Marketing creates several different types of utility:
Form utility. Form utility refers to how well an organization can increase the value of its product in the customer’s eyes by making changes and altering its physical appearance.10For example, when you want a donut or a pastry, you don’t want to buy the ingredients to make it; you want a donut in its final form so you can eat it. That’s where the bakery and form utility come into play. The bakery combines flour, sugar, eggs, and other ingredients to make the cakes, donuts, and pastries that you purchase.
Time utility. Marketing creates time utility when it makes products and services available to customers so that they can buy it when it is most convenient for them. Consider how many stores are open evenings, weekends, or even 24/7 to make it convenient for customers to shop there!
Place utility. Marketing creates place utility when it makes goods or services physically available, convenient, and accessible to customers. Consider the ease a company like Uber Eats adds to your life when you’re craving tacos in the middle of the night and you don’t feel like getting dressed and driving to go get them. You can have your food delivered to you!
Possession utility. Marketers facilitate possession utility by ensuring that a product is relatively easy to acquire. For example, many automobile manufacturers offer low (or sometimes no) interest rates on car loans to make it easy for you to walk out the door with a new set of car keys. Possession utility also encompasses the pride or satisfaction you get from owning a new product, such as a great-fitting pair of running shoes or a smartphone with all of the features you’ve been wanting.
Marketing’s primary benefit to society is that it drives the consumer economy. Marketing leads to increased sales and revenue for a business which enables them to expand operations, create more internal jobs and external jobs for partners like suppliers. Marketing also contributes tax revenue to local, state, and federal governments, ultimately leading to overall economic growth.
The Marketing Process Defined
The marketing process refers to the series of steps that assist businesses in planning, analyzing, implementing, and adjusting their marketing strategy. Do an internet search for “steps in the marketing process,” and you’ll immediately see that some websites outline a 10-step process, whereas others propose a 4-step or 6-step process. For our purposes, we’re going to use a 5-step process.
Steps in the Marketing Process
The 5-step process (see Figure 1.3) involves understanding the marketplace and customers, developing a marketing strategy, delivering value, growing customer relations, and capturing value from customers.11
Figure 1.3Steps in the Marketing Process (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Step 1: Understand Both the Marketplace and Customers
Before you can start the marketing process, you need to have a good idea of what your marketplace looks like. This means answering some basic questions about your customers, like who they are, their income and purchasing power, and how much they’re likely to spend (particularly on your products or services). If you decide to sell at lower prices in order to attain higher unit sales volume, your marketing strategy would look very different than if you decided to sell fewer products at a higher price.
Another way to approach this is to create separate brands and compete in both arenas. Consider Volkswagen. You might immediately think of the VW Beetle or the Jetta, but the company’s brand portfolio extends beyond VW passenger cars and SUVs. It’s also the parent company for Audi, Bentley, Lamborghini, Porsche, and others, and these vehicles sell at very different price points than VW passenger cars.12
Step 2: Develop a Customer-Driven Marketing Strategy
Marketing strategy refers to a business’s overall “game plan” to focus its limited resources in order to reach prospective customers and turn them into paying customers, hopefully for the long run.
It’s said that there are two basic types of marketing strategy: a product-driven, “build-it-and-they-will-come” strategy and a customer-driven strategy, in which you analyze prospective consumers and then—and only then—create something that they want or need. We’re going to focus on the latter strategy. What happens in a customer-driven marketing strategy is that the company shifts the focus from the product or service itself to its users. Customers’ needs are the central focus and the point of beginning, not an afterthought. Your primary goal in a customer-driven marketing strategy is to determine what users want and/or need and then satisfy those users. Instead of being product-centric, it’s about being customer-centric and developing a mutually beneficial relationship with customers.13
In a nutshell, it’s about establishing a connection and a relationship. It’s about understanding who your customers are, what their needs and wants are, and how you can best meet those needs and wants. It’s about knowing your target market better than your competitors do and creating a strong value proposition for those users—a promise of value that communicates the benefits of your company’s products or services. In short, it’s what makes your product or service desirable to potential customers, helps them understand why they should buy it, how your company’s product or service differs from those of its competitors, and how your offerings are superior to similar offerings from your competitors. 14
Step 3: Deliver High Customer Value
Customers have myriad buying options and alternatives today. Given that, how can a company attract and—even more importantly—retain its customers? The answer is relatively simple: you give them value for their money. By definition, customer value is the ratio between the perceived benefits and costs incurred by the customer in acquiring your products or services.
The mathematical formula is simple:
But “value” from the customer’s perspective is a complex term, because we’re really considering four different values types:
Functional value: what the product “does” for the customer in terms of solving a particular want or need
Monetary value: what the product actually costs relative to its perceived worth
Social value: how much owning the product allows the customer to connect with others
Psychological value: how much that product allows the customer to “feel better”15
Value is increased by boosting the benefits (in the form of product, place, or promotion) or minimizing the price.
Step 4: Grow Profitable Customer Relations
The bottom line is that profitable customer relationships are the “secret sauce” of any business. This step in the marketing process is where marketers acquire, keep, and grow customer relationships. Successful marketers know that acquiring customers is one of the hardest (not to mention one of the most expensive) elements of marketing. However, when you know clearly who those potential customers are, you can more effectively determine how to reach them, thus maximizing your marketing dollars.
It isn’t enough to have a one-and-done sale. You want repeat buyers, so marketers need to remind customers about the company’s products and/or services and how those products and services have met their needs and improved their lives so they make repeat purchases. Marketers need to consider how to reach customers about their offerings and make it easy and convenient for those customers to make continued purchases.
When customers have a positive relationship with a company or its products or services, they’re more likely to become repeat buyers. Satisfied customers are also more likely to be interested in buying additional products or services from your company, and they tend to recommend products to others, further reducing the company’s costs of getting new customers.16
Step 5: Capture Customer Value in the Form of Profits
The goal of successful customer relationship management (CRM) is creating high customer equity—the potential profits a company earns from its current and potential customers. It’s a relatively simple concept: increasing customer loyalty results in higher customer equity.
Increasing customer equity is the goal of marketers because it’s a bellwether for financial success. Think about it in simple terms: the higher a company’s customer equity, the more profit the company generates, and the more valuable that company (and its products or services) becomes on the market.17
Knowledge Check
It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.
Coca-Cola’s mission is to refresh the world, and to that end, it has ensured that you can buy a Coke product at numerous locations—vending machines, convenience stores, restaurant fountains, stadiums, etc. What type of utility has marketing created through this process?
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.
As an example, by attaching sensors to a large wind turbine engineers can create a digital twin and then use this to understand faults in the current design. In this case, digital technologies are tools that provide new ways to innovate.
On the other hand, digital innovations can be new product-service systems like a Fitbit watch. Fitbit uses sensors on a physical watch that generate digital data and help people to understand their heart rate, fitness level and track their performance.
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.
Add to this the no-code movement and you have the ability for most business people to at least create a prototype digital business model.
What’s Driving The Change To Digital Business Models
digital business models trends
Compared to physical resources, digital technologies change the way an organization interacts with customers, partners as well as transforming internal processes.
What Is A Digital Business Model?
Digital technologies also present opportunities to identify and realise new and untapped revenue streams, distribution methods and monetization opportunities.
Examples of how digital business models change work, home and consumer behaviour
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.
The growth in IoT devices is massive. By 2025, there 41.6 billion IoT devices will generate over 79.4ZB.
Name
Unit
Size (in bytes)
b
bit
1/8 byte
B
bytes
1 byte
KB
kilobyte
1,000
MB
megabyte
1,000,000
GB
gigabyte
1,000,000,000
TB
terabyte
1,000,000,000,000
PB
petabyte
1,000,000,000,000,000
EB
exabyte
1,000,000,000,000,000,000
ZB
zettabyte
1,000,000,000,000,000,000,000
YB
yottabyte
1,000,000,000,000,000,000,000,000
The Scale of Digital Data
What types of data can create value?
Social data e.g. Tweets, posts on Facebook can be tracked to understand brand sentiment – negative or positive.
Customer data can be used to understand shopping behaviours and characteristics that then enable improved targetting and better conversion rates thus lowering cost of acquisition.
Sensor data – can help improve logistics, enable better management of infrastructures, help design smarter cities and model new ways of working.
Transaction data: this is data as a result of a transaction e.g. you buy a bitcoin, sell a bitcoin or buy something from an eCommerce store like Amazon.
Interactive Data: If you think of smart cities then you will interact with lots of different spaces, environments and systems. Understanding where people go, how they move through a city can help optimize the layout and design.
Digital Business Models Examples
Digital Platforms
Platforms like Uber run on large scale infrastructures with a global reach. Moreover, they harness the power of mobile devices and apps to connect customers with drivers.
How Uber has different sided platform models
Open Digital Models
Another familiar open-source business model is WordPress. WordPress is freely available and can be installed by anyone as long as they use it on a hosting service e.g. Bluehost. However, for those that want a more simple solution, they offer a premium ready-hosted solution on WordPress.com that is subscription-based and has other premium features.
ECommerce
Ecommerce stores like Amazon have transformed how we shop. Moreover, the AI and machine learning process Amazon employ help with personalized suggestions. Without digital technologies, the whole supply chain of Amazon would disintegrate.
Amazon business model simplified as a platform perspective
Software as a Service Business Model
Software as a Service (SaaS) companies typically uses subscription models. A good example is Salesforce.com. This digital business model lowers initial barriers to entry and also require less commitment long-term. To improve cash flow and lock-in customers many companies offer discounted rates for annual buy-in e.g. get two months free if you pay for twelve.
Both B2C- and B2B-facing organizations can benefit from subscription economics, assuming revenue and retention outweigh customer acquisition costs (CACs).
On-Demand model
Netflix Business Model Map
The on-demand business model is defined by fulfilling customer demand via the immediate provisioning of goods and services.
On-demand digital business models
Characteristics Of DIGITAL BUSINESS MODELS
If we focus on the different types of digital business models as they are now we can see how they will change. The diagram below shows the current digital business model characteristics.
The Characteristics of Digital Business Models
Digital Business Model Transformation
The core of future business models is the value proposition that solves a customer problem or satisfies a customer need.
Digital business models are both easy and complex to understand. So let’s start with the easy and look at how digital transforms the business model. We can use the business model canvas to do this.
Various trends and drivers determine the transformation of business models.
The complexity, speed and effectiveness of these influences make it increasingly difficult for companies to master the challenges of transformation.
digital business models – Value Propositions
How Digital Technologies Shape Future Digital Business Models
Various megatrends, as well as digital and technological trends, will fundamentally change the value proposition of the future.
Trends and technologies do not exist in isolation. They build on and reinforce one another to create the digital world. Combinatorial innovation explores the way trends combine to build this greater whole. Individual trends and related technologies are combining to begin realizing the overall vision embodied in the intelligent digital mesh.
Some statistics from Gartner that demonstrate the speed and impact of digital business models:
By 2022, at least 40% of new application development projects will have artificial intelligence co-developers on the team.
By 2024, most cloud service platforms will provide at least some services that execute at the point of need.
By 2023, blockchain will be scalable technically and will support trusted private transactions with the necessary data confidentiality.
Technology innovation leaders must adopt a mindset and new practices that accept and embrace perpetual change. That change may be incremental or radical and may be applied to existing or new business models and technologies.
DIGITALLY ENABLED VALUE PROPOSITIONS
Of course, each person is built differently and will need to examine how it creates value using digital business models. These ten building blocks for value proposition design are just some of the ways that digital technologies transform the value chain.
Digital Value Propositions examples
Digital Business Models: Trends Accelerating Innovation
There are four trends that relate to the democratization of technology which will, in turn, ignite new levels of innovation:
Democratization of Application Development. AI is now offered as a Platform as a Service (PaaS) providing access to sophisticated AI tools to leverage custom-developed applications. As a result, developers can harness powerful AI-model-building tools, APIs and associated middleware. Additionally, PaaS providers have quickly established valuable training and knowledge sharing communities, including pre-built modules. These processes and resources are accelerating the development of digital business models. New solutions include vision, voice, and general data classification and prediction models of any type. digital business models
Democratization of Data and Analytics. The tools used to build AI-powered solutions are expanding. New tools are built for the professional developer community (AI platforms and AI services) and the general data specialist. These tools enable rapid new modelling and testing and speed up innovation cycles.
Democratization of Design. In addition, low-code or in some cases no-code, application development platform tools exist to build AI-powered solutions. In turn, these are built on and have new AI-driven capabilities that assist professional developers to automate tasks. This expands on the low-code, no-code phenomenon with automation of additional application development functions to empower the citizen developer.
Democratization of Knowledge. Non-IT professionals increasingly have access to powerful tools and expert systems that empower them to exploit and apply specialized skills beyond their own expertise and training. Dealing with the issues around “shadow AI” in this user-led environment will be a challenge.
Blockchain Model
Blockchain has the potential to reshape industries by enabling trust, providing transparency and enabling value exchange across business ecosystems. There is a huge potential to lower costs, reduce transaction settlement times and improve cash flow. digital business models
Moreover, in combination with IOT technologies, assets can be traced and tracked from their origin to the point of production or purchase. Often it is the combination of blockchain and other digital technologies that produces more radical digital business models.
As a result, blockchain significantly improves supply logistics and reduces risks associated with counterfeit goods.
Another area in which blockchain has potential is identity management. Smart contracts can be programmed into the blockchain where events can trigger actions; for example, payment is released when goods are received.
The Blockchain Value Proposition
A key component of digital business models is the realization of value. Blockchain potentially drives value in a number of different ways:
Blockchain removes business and technical friction by making the ledger independent of individual applications and participants and replicating the ledger across a distributed network to create an authoritative record of significant events. Everyone with permission access sees the same information, and integration is simplified by having a single shared blockchain model.
Blockchain also enables a distributed trust architecture that allows parties that do not know or inherently trust one another to create and exchange value using a diverse range of assets.
With the use of smart contracts as part of the blockchain, actions can be codified such that changes in the blockchain trigger other actions.
Development of a digital business model
Despite the proliferation of technology, it is essential to put people at the centre 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. digital business models
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.
A persona is a useful tool to describe a target individual or group. The persona highlights the set of motivations, preferences, biases, needs, wants, desires and other characteristics that can be used to evaluate how applications of technology might impact that group. digital business models
Personas have been used for many years and have gained broadest adoption in design and marketing areas, where understanding the motivations of a target audience are particularly important.
The persona sets the context for evaluating the potential impact on people and the resulting business outcome. Personas can be used to anticipate the valuable business moments that emerge as people traverse technology-enabled smart spaces.
Persona-based analysis is a powerful tool that helps leaders diagnose and take action against digital-business-disruption opportunities. Enterprise architecture and technology innovation leaders can help business and IT leaders to consider the human side of digital business strategy decisions with personas.
A second useful tool is “journey maps.” A journey map is a model that shows the stages that target personas go through to accomplish a task or complete a process.
Customer journey maps diagram the stages a customer goes through to buy products, access customer service, or complain about a company on social networks. It can be linked to the jobs to be done framework and as such provides a compelling method to identify customer problems (pains and gains).
An alternative approach is to use a journey map to diagram the stages employees go through in onboarding or in adopting new systems. Journey maps look at how multiple constituencies interact around a provide a powerful way to identify improvements.
For example, a journey map for a customer purchase might consider not only the customer view but also that of a salesperson or a fulfilment group.
Journey maps provide even more concrete context for digital business model innovation. Executives and innovation teams should consider the pain points, inefficiencies, gaps, and opportunities to delight and create new digital business moments for all the relevant constituents.
Digital Business Models
Digital technologies are complex and organizations need to understand the recombination effect as well as the digital ecosystem. Subscribe to find out more about digital business models and how you can take advantage of the democratization of digital.
