Embracing digital business models to reinvent your company
New digital technologies have disrupted how businesses deliver services to consumers and clients. While this offers opportunities for new services, products, revenue models, and increased efficiencies, companies must look closely at their business models if they hope to capitalise on digital disruption.
We interviewed and analysed a range of organisations, both start-ups and traditional businesses, to establish how companies can best plan their responses to the growing global digital disruption.
“Digital technology has changed and will continue to change how your business makes money. What is new today is the unprecedented pace of change created by a combination of mobile, digital, and infrastructure technologies in the hands of both your employees and your customers,” comments Julie A. Ask, Forrester VP and principal analyst, and co-author with Forrester VP and Principal Analyst Martin Gill in their report, “How To Embrace New Digital Business Models.”
We believes digital leaders face three key challenges:
First, eBusiness leaders must weave seemingly disparate consumer and enterprise technologies into a coherent experience. Second, they must convince their more traditional colleagues that the new opportunities that technology unlocks are worth pursuing, and may even represent the future of their firm. And third, they should understand that their competitors are doing exactly the same thing, only faster.
Digital tech is accelerating the pace of business
In a digital world, even physical products collect and transmit data. This allows companies to track how their customers are actually using and engaging with their products. Digital professionals can use this data to constantly refine and improve their products. Digital professionals would do well to learn from the likes of Nike, Tesla, and Nest.
Streamlining your supply chain and bringing your end-user closer to your company can be achieved in a digital economy. Expedia’s API allows thousands of websites to offer their customers the ability to reserve and book rooms and flights via Expedia’s booking engine. Compelling digital customer experiences create opportunities to disintermediate other suppliers.
Alibaba’s online marketplace for third parties is the first stop for many brands entering the Chinese market. Platforms such as these have the infrastructure for payments and shipping along with a ready customer base to help foreign companies to scale quickly into global markets which would otherwise be out of their reach.
Companies like Apple, Google, and Microsoft are developing platforms that allow consumers to share their health data, while individual apps are opening APIs to allow consumers to share even more data from their car, home, and financial services. More than that, artificial intelligence has advanced to the point of offering very humanlike coaching. Democratised data and AI can cut down on person-to-person interaction and help customers make better decisions.
Mobile remains one of the biggest drivers of change. While we already see mobile tech blanketing the world, Forrester believes there will be constant shifts even while e-business leaders are adapting to the current realities.
Opportunities such as location-based services, value-adds, and real-time monitoring allow companies to overcome traditional product, service, and digital boundaries.
“Digital professionals who see mobile, the Internet of Things (IoT), data, and advanced analytics as separate technology initiatives will flounder. Those who focus obsessively on delivering convenient, simple, and context-aware moments will thrive as consumers increasingly embrace connected technologies for fitness, health, entertainment, home security, insurance, travel, and more,” explain Ask and Gill.
Using digital to unlock new business models
Many firms are piloting new ways of pricing and selling their product, creating new revenue streams, and cutting costs at scale. However, to compete in the age of the customer, we suggest digital business professionals should focus on three critical questions: How can I optimise existing revenues? How can I create new revenue streams? And how can I optimise my cost base?
We also recommend that digital business executives experiment.
“Some new ventures are bound to fail, while others could well grow to become your firm’s future business model. Take General Electric, which expects to triple its software revenues by 2020, generating more than $15 billion from the industrial application of digital technology. Its belief in digital is so complete that it is divesting its $30 billion commercial leasing and lending portfolio to Wells Fargo.”
Finally, we caution digital leaders that these new business models will have far reaching consequences for their business, beyond the new product and revenue opportunities.
Digital business will demand a tighter relationship between the digital business executive and their technology management counterpart. This allows them to effectively transform how the company designs, develops, and delivers new products and services as well as the technology needed to underpin these.
New operating models will call for a new way of accounting and reporting on companies’ health. New metrics will need to be employed, and customer lifetime value, retention, and wallet share will become increasingly vital measures to demonstrate overall success as firms pivot their revenues from traditional sources to new digitally driven ones.
Most particularly, companies will need to ensure they adequately protect all the customer and product data generated in their new digital business operations.
“Your industry may not be as vulnerable to the forces of digital disruption as the media, entertainment or banking. But whether you firm manufactures high-end medical equipment or digs rocks out of the ground, digital can and probably will change the basis for competition in your field. Your firm can position itself as a leader or a follower. It all depends on how you plan your response,” Ask and Gill conclude in the study.
Forrester is an international research and advisory firm.
Intelliwave SiteSense boosts APTIM material tracking
“We’ve been engaged with the APTIM team since early 2019 providing SiteSense, our mobile construction SaaS solution, for their maintenance and construction projects, allowing them to track materials and equipment, and manage inventory.
We have been working with the APTIM team to standardize material tracking processes and procedures, ultimately with the goal of reducing the amount of time spent looking for materials. Industry studies show that better management of materials can lead to a 16% increase in craft labour productivity.
Everyone knows construction is one of the oldest industries but it’s one of the least tech driven comparatively. About 95% of Engineering and Construction data captured goes unused, 13% of working hours are spent looking for data and around 30% of companies have applications that don’t integrate.
With APTIM, we’re looking at early risk detection, through predictive analysis and forecasting of material constraints, integrating with the ecosystem of software platforms and reporting on real-time data with a ‘field-first’ focus – through initiatives like the Digital Foreman. The APTIM team has seen great wins in the field, utilising bar-code technology, to check in thousands of material items quickly compared to manual methods.
There are three key areas when it comes to successful Materials Management in the software sector – culture, technology, and vendor engagement.
Given the state of world affairs, access to data needs to be off site via the cloud to support remote working conditions, providing a ‘single source of truth’ accessed by many parties; the tech sector is always growing, so companies need faster and more reliable access to this cloud data; digital supply chain initiatives engage vendors a lot earlier in the process to drive collaboration and to engage with their clients, which gives more assurance as there is more emphasis on automating data capture.
It’s been a challenging period with the pandemic, particularly for the supply chain. Look what happened in the Suez Canal – things can suddenly impact material costs and availability, and you really have to be more efficient to survive and succeed. Virtual system access can solve some issues and you need to look at data access in a wider net.
Solving problems comes down to better visibility, and proactively solving issues with vendors and enabling construction teams to execute their work. The biggest cause of delays is not being able to provide teams with what they need.
On average 2% of materials are lost or re-ordered, which only factors in the material cost, what is not captured is the duplicated effort of procurement, vendor and shipping costs, all of which have an environmental impact.
As things start to stabilise, APTIM continues to utilize SiteSense to boost efficiencies and solve productivity issues proactively. Integrating with 3D/4D modelling is just the precipice of what we can do. Access to data can help you firm up bids to win work, to make better cost estimates, and AI and ML are the next phase, providing an eco-system of tools.
A key focus for Intelliwave and APTIM is to increase the availability of data, whether it’s creating a data warehouse for visualisations or increasing integrations to provide additional value. We want to move to a more of an enterprise usage phase – up to now it’s been project based – so more people can access data in real time.