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Author's profile photo MARCO CIGAINA

The New World of Digital Business Models

By Marco Cigaina and Uwe Riss

Did you know that developing business models has the same relevance as implementing IT solutions to accomplish the digital transformation? Digital Business Modelling helps design solutions integrating digital technology and business models.

Every company will become digital (or vanish)

Most business leaders have recognized that the digital transformation is not restricted to a few natively digital companies. In fact, it is transforming the whole economy that will become digital. Business leaders have to decide how they develop their companies’ digital capabilities. However, currently they hardly find a systematic procedure for this endeavor.

Digital transformation is primarily about business

The primary goal of digital transformation is growth and competitive advantage. This is a major challenge for both business and IT. Analysts such as Gartner have pointed out that business and technology innovators have to jointly and collaboratively deal with it. To accomplish this task, however, they need a common language.

A common language helps business and technology innovators work together

On the business side there is an established model that covers nine business model components: Value Proposition, Customer Segments, Revenue Streams, Channels, Customer Relationships, Key Partners, Key Resources, Key Activities, and Cost Structure.

/wp-content/uploads/2016/01/digital_business_300x185_875557.jpgTo include digital capabilities we introduced digital key elements: People, Businesses, Things, Data and Cloud. They represent the hotspots of digital transformation. digital-business These cover social media, enterprise platforms, Internet of Things, real-time analytics and their connection through a cloud-based network of worldwide available services. It is not so much the technology that determine these digital key elements but their value for customers.

There is systematic approach to digital business modeling

Since the digital transformation requires an integrated view, we have unified business and digital dimensions in a single model of digital value drivers, which serve as a sort of LEGO bricks for digital business modelling. They describe which value a certain digital key element contributes to a business model component. We used the model to analyze existing successful digital businesses like Amazon or Google, but it also became clear that it provide a powerful tool to jointly design approaches towards digital transformation with our customers. To this end we have gamified the approach representing digital value drivers as cards.

Use the digital business modelling language to design digital business

Digital business modelling including such gamification approach helps to better understand the fundamental characteristics of digital business, to learn about the nature and opportunities of digital technologies and thus to pave the way towards successful digital transformation. The approach has already been used in pilot workshops with customers and gained considerable recognition from their side; one message we got was that they expect SAP to guide them through this fundamental change and to provide them with suitable solutions to implement their novel digital business models.

Interested to know more? We invite you to read our paper and let us know your thoughts (CLICK ON THE IMAGE BELOW TO DOWNLOAD THE PAPER):

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      Author's profile photo Emma Ma
      Emma Ma

      agree with your point of view. the most important maybe the part of "how".

      especial for the existed business model, since it is easier to form 1 from o, comparing with founding 10 from 1... ....

      so while we face SAP's customers, who already have 1, but need to change to 10, whether there is a methodology, maybe the first question we need to answer.

      Author's profile photo Mauricio Cubillos
      Mauricio Cubillos

      I think this is other example of how moving to Value Added Services will lead the future of SAP. We are a technology company, but we need to help our customer how to get the best out of it.