5 Domains of
Digital
Transformation
Session 2
Agend
a
1. What is Digital Business Transformation?
2. Why is it important for you to understand?
3. How does it impact the traditional business model? What
skills and mindset do you need to be ready for it?
5 Domains of Digital Transformations
Five Domains of Business Strategy
that Digital is Changing
Digital technologies
change how business
connects with and
create values for
their customers
Columbia Business School
Strategic Themes / Key Concepts
Customers Harness customer networks ● reinvented marketing funnel
● path to purchase
● core behaviours of customer network
Competition Build platforms, not just ● platform business models
products ● (in)direct network effect
● (dis)intermediation
● competitive value train
Data Turn data into assets ● templates of data value
● drivers of big data
● data-driven decision making
Innovation Innovate by rapid ● divergent experimentation
experimentation ● convergent experimentation
● minimum viable prototype
Value Adapt your value proposition ● concepts of market value
● paths out of a declining market
● steps to value prop evolution
Shifts in Strategic Assumptions
Changes in Strategic Assumptions:
Customers
From Analog (Pre-Digital Era) To the Digital Age
Customers are mass market Customers as dynamic network
Communication are broadcast Communications are two-way
one-way to customers
Firm is the key influencer Customers are the key influencer
Marketing to purchase purchase Marketing to inspire
purchase, loyalty, advocacy
One-way value flows Reciprocal value flows
Economies of (firm) scale Economies of (customer) value
Changes in Strategic Assumptions:
Competition
From Analog (Pre-Digital Era) To the Digital Age
Competition within defined industries Competition across fluid industries
Clear distinctions between partners Blurred distinctions between partners
and rivals and rivals
Competition is a zero-sum game Competitors cooperate in key areas
Key assets are held inside the firm Key assets reside in outside networks
Products with unique features and Platforms with partners who exchange
benefits value
A few dominant competitors per category Winner-takes-all due to network effects
BUILD PLATFORMS, NOT JUST PRODUCTS
Changes in Strategic Assumptions:
Data
From Analog (Pre-Digital Era) To the Digital Age
Data is expensive to generate in firm Data is continuously generated
everywhere
The challenge of data is The challenge of data is turning it
storing and managing it into valuable insight for data-driven
decisions
Firms make use only of structured Unstructured data is increasingly
data useable and valuable
Data is managed in operational silos Value of data is in connecting it
across silos
Data is a tool for optimising Data is a key intangible asset for
processes value creation
Changes in Strategic Assumptions:
Innovation
From Analog (Pre-Digital Era) To the Digital Age
Decisions made based on intuition Decisions made based on testing and
and seniority validating
Testing ideas is expensive, slow, Testing ideas is cheap, fast, and easy
and difficult
Experiments conducted infrequently, Experiments conducted constantly, by
by experts everyone
Challenge of innovation is to find the Challenge of innovation is to solve
right solution the right problem
Failure is avoided at all cost Failure are learned from, early and
cheaply
Focus is on the “finished” product Focus is on minimum viable prototype
(MVP) and iteration after launch
Changes in Strategic Assumptions:
Value
From Analog (Pre-Digital Era) To the Digital Age
Value proposition defined by industry Value proposition defined by
changing customer needs
Execute your current value Uncover the next opportunity
proposition for customer value
Optimise your business model as Evolve before you must, to stay
long as possible ahead of the curve
Judge change by how it Judge change by how it could
impacts your current business create your next business
Market success allows for “Only the paranoid survive”
complacency
9 Tools / Methods for Digital Transformation
When & Where to apply Methodology / Tools
Strategic Tools for generating a new solution Customer Network Strategy
Ideation to a defined challenge by exploring Generator
different facets of a strategic
phenomenon Data Value Generator
Strategic Visual tools that can be used to Platform Business Model
Maps analyse an existing business Map
model or business strategy or to Competitive Value Train
assess and explore a new one
Disruptive Business Model
Map
9 Tools / Methods for Digital Transformation
When & Where to apply Methodology / Tools
Strategic Step-by-Step planning processes Convergent Experimental
Planning or methods that can be used to Method
develop a strategic plan tailored to
Divergent Experimental
a specific business context or
Method
challenge
Value Proposition Roadmap
Strategic Tools with criteria for evaluating Disruptive Response Planner
Decision and deciding among a set of
generic options available for a key
strategic decision
Cases / Examples to discuss
Encyclopedia Britannica “By the time we stopped publishing the print set, the sales
represented only about 1% of our business”.
Digital transformation from print to online education and
knowledge platform
Khan Academy A whole new business model based on immediacy of access
Amazon, Apple, Google Digital Titans
Uber, Grab, Airbnb Digital rising stars
Facebook, Youtube Emergent Social Software Platform (ESSP)
Fintech Financial (Retail banking) going through digital transformation
Business that failed to recognise that the rules of the game had changed and that did not
manage to change its strategy to match digital reality: Kodak, Blockbuster, Nokia
Digital Strategies: Developing & Thriving in
Digital Era
1. New ways of thinking about customers and competition
2. New ways of understanding data and its value
3. New ways of managing and leading innovation
4. New ways of defining and understanding our value to the
marketplace
Digital technologies are transforming not just one aspect
of business management, but virtually every aspect
They are rewriting the rules of customers, competition,
data, innovation and value