Part 1 outlined what and how core innovative technology is creating business disruption, and ended with the statement;  The realization that Digital Business is about adding a new online capability to your existing business model, but is the disruptive recreation of your industry sector is dawning rapidly in Boardrooms as sector news and financial results are the cause of serious evaluation.

Part 2 provides some examples of new business models that illustrate some of the basic principles of the ‘disruption’ built around the principles out lined in part 1

Some of the largest, most powerful, Global Enterprises have announced new strategic goals; as an example General Electric, GE, aims to establish itself as one of the top ten global software companies in the coming years. GE has, in the past, shown itself to be quick to react to change in order to add value to its businesses; (Financing sales became both an enabler of sales but also a very profitable addition to its equipment manufacturing some years back); now GE recognizes that it’s the Software that differentiates, adds value, and can be used to change the Business Model for ‘standardized’ equipment manufacturing.

Most people would associate this move with the disruption that Apple introduced to the phone market with its concept of iPhone personalization via the App Store. Even here this is a market that faces still further disruption, as a Smart Phone becomes a Digital token representing its human owner in the Internet of Things, IoT, and decentralized Services Digital Business economy.

It is generally accepted that some twenty percent of western world Smart Phones are rarely used for voice calls, but they are indispensable to their owner’s life as they check their health, pay for items, and indulge in an ever-increasing number of other activities. Their Smart Phone has, in fact, become their Digital Persona projecting, and representing, them to the Digital World, just as surely as an IoT sensor represents the machine, or process, to which it is attached. Vodafone, a leading telecoms operator in the Mobile market, speaks of this as the opportunity to build a whole new business model aggregating and managing Digital Services that are directly applicable to the person/persona. With their Smart Phone providing a flow of information about the person’s location, event, even a sensed medical emergency, the value of a managed concierge style of guardianship seems a distinct possibility. (see Ray Wang’s blog with examples for more information on the use of a smart phone as a persona)

Global Market Leaders in many sectors are recognizing the market opportunities that come from rethinking, or repackaging, services and information to offer increased personalized value. Consumers (buyers) have been shown to be willing to quickly recognize the value in products and markets that align with enabling their more complex demands.

For these global enterprises the challenge lies in reinvention of their current operational thinking and management into the true Digital Economy of ‘Services’. The removal of long-term investment based resource decisions and the substitution of quick reaction, dynamic optimization, of events using skilled operational workers introduces time frames and financial reporting structures alien to the existing business and the majority of its management.

There is no simple template answer as to the right moves for a particular enterprise as in past transformations, though in several industry sectors the basis of the new competitive model is becoming clearer. As an example Aggregation works particularly well when coupled to activities such as process administration where there is no link to pleasure only to compliance. On the other hand Disaggregation is usually linked to activities associated with pleasure such as travel and holidays. 

Disaggregation and de-centralization would seem to infer the removal of market opportunities in the face of consumers (users) wanting to manage the assembly of their own personalized product combinations. This has turned out not to be true with some of the best examples of emerging new market opportunities around enabling, and supporting, the necessary administration process elements between participants; good examples include; AirBnB, Booking.com, or TripAdvisor.

There are many revenue rich products, and markets, being created currently, what they have in common is that they are real innovations with a comprehensive and cohesive approach to an emerging recognizable issue; what is being offered, to whom, and how they operate are all innovatively addressed. None of them are merely offering the existing product from an existing market place with availability online, the old definition of multi Channel operations in a Digital Business environment!

 

Footnotes

  1. Part 3 in this series (following next week) will endeavor to answer the key question; So what if anything can be pin pointed as under pining successful markets and competitive products? 
  2. In judging the awards for Constellation Research Connected Enterprise annual Super Nova competition it was extremely noticeable that new hardly known startups dominated the entries submitted by their satisfied customers. In each case the change achieved could truly be described as both innovative and disruptive, whilst the outcomes for the enterprise and its business were remarkable and substantial. See Constellation Connected Enterprise for more details on awards.