By digitising their own business model and building additional digital business units, many companies gain stability and reach. Companies can become more independent and better serve a variety of customer needs. The basic prerequisites are the right attitude, clean data management, scalable infrastructure and a platform/application.
Digitisation should not be seen as a diversification of the business model, but as an extension of products and solutions that have proven themselves on the market in other forms and are included in the value chain in an extended form. Personal trainers in fitness studios, as an example, have proven themselves and are readily booked on site. In times of home offices, digitalisation of these services is an opportunity to expand the service portfolio.
Digital business models create stability
To take up the example of the fitness studio again: If a gym were to decide to rent out space as a co-working space or to run its own café in the gym, this might make economic sense and be quite successful. But in neither project does the studio benefit directly from its experience and expertise as a fitness studio. The situation is different when it starts to develop a new digital business model around its expertise. One possible approach is online courses or an online shop with specific paraphernalia around the product of fitness.
Studies show that the development of new, digital business models is receiving a great deal of attention, especially in the insurance and finance industries. Here, too, stability-driving and customer experience-enhancing digital business models are being scrutinised in order to expand their own products or build new ones. In other sectors, this mindset is less pronounced, especially in industry, where only about 1/3 of decision-makers see data-driven business models as stability drivers. At the same time, they enable manufacturing companies to provide comprehensive services for their products. If a company previously only earned money from the sale of a single product, the digital business model enables recurring services and thus a more stable cash flow.
Promoting the connection between product and digital services
The automotive industry knows how this works. The car manufacturer Audi wants to provide an increased number of digital services and functions in the future and thus significantly increase its share of sales. The entire business model and the value chain are changing decisively. Instead of one-off sales, the focus is shifting to digital aftersales. Customers can, for example, add or cancel upgrades or functions for their vehicle as needed.
Printer manufacturers have also adopted this principle and offer, for example, access to various software packages, services and also materials such as inks and papers.
Another example is provided by well-known sports goods retailers. These built up the classic online and offline retail business with sports articles for their assortment early on. Now it can be observed that an ecosystem of services is being built up for the respective selected products, thus complementing the portfolio.
4 crucial components as the basis for a digital business model
- The corporate culture: The networking of different disciplines forms the starting point for the change and the development of digital business models. Cross-disciplinary, agile teams are a central anchor point in the corporate culture that must be built up and promoted. The idea of service must be merged with the product and considered across sectors.
- Data: Data is needed to develop digital business models. Companies can draw on data that they already receive through the production and provision of their products, or they can tap into new data sources. In the manufacturing industry, for example, IoT sensors built into the finished product can provide information about the condition or use of the product. The same can serve as a starting point in the transport industry.
- The infrastructure: Cloud computing is particularly attractive because it is scalable and simplifies networking with other systems. Power can be accessed according to need and location. Many legacy systems and IT landscapes that have grown over decades and are designed as on-premises solutions, on the other hand, are coming under pressure in view of the requirements for agility and interfaces.
- The platform: Closely interwoven with the topic of infrastructure is thinking in terms of platforms. The possibilities of platforms are still underestimated. They open up access to new customer groups, enable new types of cooperation and can help to reduce one’s own distribution costs. One thing is clear: not every company can build its own platform. For many companies, however, it is probably more interesting to position themselves with a highly specialised service in an ecosystem close to their customers and to play a relevant role in the niche.
Building digital business models offers companies a way to differentiate themselves from the competition and leave their own footprint. There is always the possibility to expand one’s own portfolio or to participate in digital platforms and thus tap into new customer groups. But it is also possible to build one’s own platform that is made available to other companies to benefit from cooperation and network effects. There are practically no limits to imagination and entrepreneurship.
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