Archiv der Kategorie: Business modeling

Business modeling consists of topics like business idea, business concept.

The Digital – Lapis Philosophorum of the 21 Century

At a time when people were torn between the material and the ideal world, alchemists were searching for the means of the means, the philosopher’s stone. It should draw the ignoble by transmutation out of base metals and diseased creatures and thus pave the way for gold or the eternal life. However, even under torture, the alchemists did not manage to produce real gold. Nevertheless, many are still looking for a way to turn the world for the better. Currently they speak of the digital.

Like the Philosopher’s Stone, hopes are raised among today’s decision makers, hopes which, above all, offer special benefits for today’s alchemists. Despite this, the digital transformation means dramatic changes in the flow before anything else.

  • Delays affect stronger than before
    Those who couldn’t get a hold on unpunctuality will have additional difficulties with the digital transformation. Processes that take too long, piles of orders that are growing steadily, and delivery dates that are not fulfilled result now faster in problems. As long as parts of the process take place outside of computers, different processing speeds, unnecessary additional activities and extensive reworking burden a reliable flow – even with a high degree of digitization. In the future, the participants expect results that are almost immediately available.
  • Error sources create more serious consequences
    Today’s complexity offers a variety of error sources that are difficult to trace back to the root cause. If a delivery does not reach its destination because the address is incorrect or if the wrong articles are delivered, the customer gets frustrated. First of all because the order does not arrive on time and secondly, above all, he feels badly served – of course because of missing personal appreciation. Digitization offers an improvement by automating simple routines. However, this requires that you know your processes. The launch of IT systems always had been difficult. With digitization, clear processes become even faster and more important and thus the implementation becomes more difficult.
  • Shortcomings harm more intense
    Particularly unpleasant are the little quirks that interfere with the process, such as a less intuitive user interface, products and services which have small defects, and an uncomfortable way to fix deficiencies. Bad response times of the website, excessive entry validation or unclear contact persons spoil the customer for further businesses. Digitization will increase the share of IT in the value creation and accelerate everything. If you do solve these flaws, the customer is gone – forever.
  • Foresight does not work anymore
    The good news is that in the future potential customers can be found everywhere – globally. All are just one click away and expect prompt delivery. This changes the entire previous thinking – ten hour hotlines are no longer enough; many new regulations and laws have to be taken into account; one or two languages ​​are no longer sufficient for the user interface and the hotline. The list can be expanded as desired. Digital transformation needs a new look at the customers – How big is the target group? Where are the customers of tomorrow? When are you active? How fast do we have to deliver? A forward-looking planning becomes impossible, especially because there is no time left to react.
  • Customer loyalty is gone with one click
    In the absence of personal contact it is also increasingly difficult to adjust to the customers. As a result, they remain loyal only until the next click delivers a better result. The digital transformation requires a new form of customer intimacy. For example, completely new services can offer customers added value that motivates them to come back. Examples are the history of past purchases or personal referrals depending on your own buying behavior. Additional services such as access to an exclusive network or the provision of special information are imaginable. Thus, the digital transformation has a fundamental influence on the existing business model.

Bottom line: As in the earlier centuries, it turns out that the philosopher’s stone, the digital, still produces a false shimmer. In all this it would be possible today to benefit from the digital transformation with an appropriate preparation. Delays, errors, shortcomings, the lack of foresight and the crumbling customer loyalty can be improved by overhauling the business model. The digital transformation not only requires IT systems for this, but rather involves all areas of the company. That way the digital becomes the Lapis Philosophorum of the 21st century.

Unnecessary loss of friction in the process

Business procedures, such as the development of new services, the procurement of material, the production of goods or the distribution of commodities, are improved through the active Business Process Management (BPM). For this purpose, the procedures are described and weaknesses are visualized in order to optimize the sequence of activities so that only the right thing is done right, e.g.

  • better involved customers,
  • more reliable delivery,
  • accelerated turnaround time,
  • automated tasks
  • minimized time and costs,
  • increased quality,
  • and so on.

The desired effects can not be accomplished, if existing approaches and demands get in the way of real progress. This leads to losses of friction that do not disappear with the designing of processes.

Often these hurdles are homemade. A good example of impeding attitudes is the way of dealing with tasks, authority and responsibility.

  • Tasks without authority and responsibility
    The actual work is performed as a task. Usually something is created, processed, finished or executed – e.g. building a prototype, polishing a surface, assembling a device, washing a car. In order to be able to perform the task, the performers need appropriate knowledge and skills.
    However, if they lack the appropriate authority and responsibility for the results, then the fulfillment will be poor.
  • Authority without tasks and responsibility
    The authority describes the rights that somebody has. This includes the permissions to perform or direct something – e.g. to use a certain machine for manufacturing or to give instructions to the employees. The corresponding permissions must be known by all involved people.
    If someone has sufficient authorities, but no task or responsibility, the competence loses its effect.
  • Responsibility without task and authority
    Responsibility describes the commitments that you make. This can be direct responsibility or shared responsibility – direct responsibility refers to one’s own actions and the activities of directly assigned employees; the shared responsibility arises, if one has indirect influence on occurrences as part of a team (in the sense of cling together, swing together).
    Individuals like to adorn themselves with the glow of responsibility – especially, if it does not result in any consequences, because there are no tasks associated or special permissions required.

In simple words: Tasks, authority and responsibility should ALWAYS be in one hand for the sake of adequate results. It makes no sense to assign someone to a task without the necessary authorities for the fulfillment and without the responsibility for the result. Good examples are the Japanese line workers, who perform subtasks in making a car.  They have the right and duty to immediately stop the line, if they find a mistake. This allows the earliest possible correction of the flaw. That way they avoid the accumulation of unnecessary rework. At the same time, costly decision-making processes are avoided, which would burden the process.

Bottom line: The design of processes often begins with the application of IT, in the hope that this can improve the process. However, often old rules and roles are retained. As a result, for example, task, authority and responsibility remain in different hands. Even, if it is faster and you only have to click once to fulfill your responsibilities or to allow the performers to do their job. The largest effect is achieved by transferring the task, authority and responsibility to the people, who fulfill the task. They know what to do, can decide how to do it, and strive for the required quality of the result. That way, the losses of friction in a process are minimized.