With the Z1 of Konrad Zuse in the early forties of the last century, the first electronic computer was created. However, the fifth Kondratiev that announced the information technology as a disruptive change in the economy and society started not before the 1970s. The access to the global network is possible anytime, anywhere with mobile devices of all kinds. Together with the gigantic computing power of today’s computers, a big wave to implement well-known concepts is being piled up: the automation of processes, embedded systems in all moving and unmoved objects, data management in the cloud as well as the processing of unimaginably huge amounts of data with Big Data. But what do all these approaches mean for the commercial Canvas ?
Every business can be depicted on the Business Model Canvas. In the following bullet points, the momentum of the digital transformation is considered.
Already in the course of e-business more than twenty years ago, three customer areas were identified: business, consumer and government. Business describes the commercial enterprises, consumer the private customers and government the state/public institutions. In the beginning ventures should explore the digital reality of their own clientele. How digital are the customer areas? Where and when are the customers active? What do the customers want?
- Customer relationships
E-business already elaborated the possible customer relationships at an early stage: namely, all possible combinations of the axes business, consumer and government (i.e. B2B, B2C, B2G, C2B, C2C, C2G, G2B, G2C, and G2G). For most fields famous examples are available, like Amazon (B2C), eBay (C2C). A look at one’s own relationship structures and the degree of its digitization provides initial starting points for the digital transformation. What relationships exist or are possible? How, when and where does the customer wants to get in contact with the provider? What kind of digitization is needed?
The path through which the participants get in contact with each other is determined by the previous routine. These channels range from personal visits, telephone calls, publications, trade shows, to the Internet. It is an advantage to use all possible channels. Which media is already used? Which channels should be developed?
The proposals are split into two groups. 1) Physical products and on-site services as well as 2) digitizable products and remote services. While the second group comprises purely digital propositions, the first group can be extended with digital building blocks, e.g. the remote maintenance of a machine, the 24-hour hotline, online training. The digital opportunities of the propositions are often not clear. Which parts of the assortment can be digitized? Which new digital services fit into the product range?
- Revenue streams
In addition to the core business, the accumulated knowledge and contacts provide additional sources of revenue. The digital transformation opens up these information-rich opportunities. Which digital sources of income are available in the field of the propositions? What else can one earn with the existing knowledge? What can you do with the contacts?
It is always surprising how far or how little the internal possibilities of the IT are used. Thus, value creation continues to take place with traditional, paper-based practices. At the latest when the customers are no longer satisfied with the slow, manual processes and if a closer involvement is desired, nothing else remains but adapting digitally. The affected activities can be derived from the digitizable proposals. Which processes are partly or fully automatable? How does the transformation take place?
Digital companies have virtual resources, i.e. the IT with its networks. A look at the degree of internal digitization, the already automated processes, the data landscape and the applications quickly shows the need for action. Which processes are already IT-based? What data is available? Which applications have a digital future?
The participants in the provision of deliverables are the internal and external co-workers. They need new skills in the digital world, such as strong customer focus, lifelong learning, teamwork, change management as well as IT-specific knowledge of computer literacy, data security, data analysis, the Internet, etc. Who are the internal and external partners? Which skill profiles are there or are required? Which skills are missing?
- Cost structure
The digital transformation is not free of charge. The savings in expenditure and the increases in sales can not be realized overnight. Looking at Amazon, sales are growing steadily, but profits are not developing in the same way. Before you start with the digital transformation, you need an honest commitment concerning the costs. Where do the expenses arise? How long may the digital transformation take? What is the cost of not digitizing?
Bottom line: The complete Business Model Canvas is affected by the digital transformation. The already achieved digital penetration and readiness of all components determine the expected effort. The first step into the digital future is the conscious decision of all involved people for the necessary efforts. The Business Model Canvas provides the required overview.