Schlagwort-Archive: Relationships

The digital on the Business Model Canvas

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.

  • Customer
    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?
  • Channels
    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?
  • Propositions
    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?
  • Activities
    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?
  • Resources
    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?
  • Partners
    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.

Deciding with system

Today’s decisions are characterized by volatility, uncertainty, complexity and ambiguity – VUCA for short. The underlying influences are constantly on the move and offer with their volatility no robust basis for painstakingly elaborated decisions. The lack of predictability creates uncertainty and burdens business with surprises. The set of influencing factors and their interdependencies create a complexity that is hard to understand. The criteria, which can never be described adequately, might be interpreted in all possible directions and thus create an ambiguity that is difficult to handle. In a VUCA world, decisions have to be made quickly in order to have the opportunity to influence the changing conditions. What it needs is a system to decide.

The following system is scalable. The larger the task, the more attention is needed for one or the other step.

  • Specifying problem and goal
    A long-term analysis of the initial situation is always counterproductive, since it leads to the fact that the conditions have already evolved, when one finally decides. A snapshot of the future target state is sufficient to enable the participants to present the details of the solution. A brief description of the actual problem and an idea of the desired target state are the prerequisites for the next steps.
  • Understanding aspects, relationships and limitations
    An overview of the respective aspects of a decision, such as the involved people, information, objects, locations, etc., is the starting point. The relevant dependencies and influences between the areas determine the dynamics. Since we are only able to deal with 7plusminus2 aspects, we have to confine ourselves to look at these relationships individually. In addition to these restrictions resulting from the mutual effects, there are the limitations imposed by rules and laws. It is crucial to understand the interaction – not trying to simulate extensively.
  • Developing alternatives
    On the basis of this information, the search for possible choices starts. The larger the differences between the alternatives, the more likely that you will not miss a favorable alternative. This determines the solution space. In order to discuss the alternatives, it is helpful to create an appropriate documentation per option depending on the size of the task. Rough estimates are better than complex Excel tables. Simple sentences and representations are better than thick books.
  • Anticipate effects
    In order to evaluate the alternatives, it is a good idea to present the effects. Therefore, visions of the proposals are made, as if they have already been implemented. The individual images of the future are then questioned concerning the responses of the affected areas (for example the customers, the market, the competitors, the employees, the executives, the shareholders). It is very likely that those in this discussion involved people will have a picture of the future that is very close to reality. All statements should be taken seriously and taken into account in the assessment.
  • Decide
    The final step is the decision for one of the alternatives without fuss and quibble. Whoever leaves the decision at this point to a coin is not able to decide and puts his fate into the hands of other people.

Bottom line: Deciding with system is a quick way to make actively progress in VUCA times. The way from the problem/ goal specification, to an understanding of the situation, the creation of selection possibilities, the anticipation of the future, to the actual decision is moving faster or somewhat slower depending on the size of the task. If a decision takes months, the whole thing is needless, since the world has already moved on. Deciding with system offers a structure that allows decisive executives to make quick advances.