Managing Digital Change

Incumbents

(Established companies) Focus on improving their products and services for their most demanding customers and usually the most profitable ones. They exceed the needs of some segments and ignore others needs.

Entrants

(New comers) Targeting those overlooked segments gaining a foothold by delivering more suitable functionality often at a lower price.

Digital Maturity Matrix

- Fashionistas -Digital masters -Beginners -Conservatives

Digital Trends

- Global immersive networked computing environment built through the continued proliferation of smart technologies. - Reputation. We will have a picture of how someone has spent their time. -Augmented reality -Artificial intelligence will be present

Open innovation benefits

- Reduced cost of conducting research and development - Incorporate of customers early in the development process - Increase in accuracy for market research and customer targeting - Potential for synergism between internal and external innovations - Potential for viral marketing

Benefits of the Big Data Use

-Cost reductions -Quick decisions -"Better" decisions - Product and service innovations -More efficient corporate management -Mass customization of services -Intelligent products

Elements of Digital Transformation

-Customer experience -Operational Processes -Business Models

Big Data

-Datasets whose size is beyond the ability of a typical database software tools to capture, store, manage and analyze -a broad term for datasets so large or complex that traditional data processing applications are inadequate.

Who of a business model

Target customer

The Role of a CDO

The CDO leads the utilization and governance of data across an organization. As CDO, you're an executive that understands strategy as well as how to use data to drive a business in the desired direction. The best CDOs are then able to justify that direction to investors and stakeholders.

Volume (Big Data)

The amount of data matters. With big data, you'll have to process high volumes of low-density, unstructured data. -This can be data of unknown value, such as twitter data feeds. -scale of data

Moore's Law

The number of transistors per square inch on an integrated chip doubles every 18 months

Why of a business model

how you make money

Digital Darwinism

implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction

Options for developing and expanding the digital organization

1. Innovation team 2. Internal innovation lab / innovation 3. Accelerators 4. Incubators 5. Unstructured participation

DX Drivers

-Exponential development of the performance of available technologies and systems -Digitization covers more and more areas value creation -The combinatronics of different lines of development and the increasing linking of objects and living beings.

Beginners

-Management is skeptical of the business value of advanced digital technologies -May be carrying out some experiments -Immature digital culture These firms do very little with advanced digital capabilities, although they may be mature with more traditional applications such as ERP or electronic commerce. Although companies may be Beginners by choice, more often than not they are in this quadrant by accident. They may be unaware of the opportunities, or may be starting some small investments without effective transformation management in place.

Hype Cycle Stages

1. Innovation trigger 2. Peak of inflated expectations 3. Through of disillusionment 4. Slope of enlightenment 5. Plateau of productivity

4 Industries

1. Mechanization 2. Mass production 3 Automation 4. Cyber physical Systems

Fashionistas

-No overarching vision .-Underdeveloped coordination - Have the ideas, but not the leadership to incorporate them These companies have implemented or experimented with many sexy digital applications. Some of these initiatives may create value, but many do not. While they may look good together, they are not implemented with the vision of gaining synergies among the items. Digital Fashionistas are motivated to bring on digitally powered change, but the digital transformation strategy is not founded on real knowledge of how to maximize business benefits. Companies lacking enterprise-level governance may find they are in this quadrant at the corporate level, even if digital efforts are more mature in some business units.

Conservatives

-Overarching digital vision exists, but may be underdeveloped -Few advanced digital features, but traditional capabilities may be mature -Strong governance -Taking active steps to build digital skills and culture -They favor prudence over innovation. Conservatives understand the need for a strong unifying vision as well as for governance and corporate culture to ensure investments are managed well. However, they are typically skeptical of the value of new digital trends, sometimes to their detriment. Though aiming to spend wisely, their careful approach may cause them to miss valuable opportunities upon which their more stylish competitors will pounce.

Open innovations concepts

-Overcoming the closed innovation model -Customer integration into the innovation process is a must -As well as suppliers, universities, start-ups and competitors

Customer resistance to innovation

-Postponement -Opposition -Rejection

3 stages of a lean start up

-Problems/solution -Product/market fit -Scale

Digital Transformation Definitions

-Realignment of products, services, processes and business models of established companies to the conditions of an increasingly growing digital world. - Technology-induced change of many levels in the organization that includes both the exploitation of digital technologies to improve existing processes and the exploration of digital innovation, which can potentially transform the business model. -Transformation simultaneously affects affects multiple areas within an organization and there are many stakeholders involved in defining a transformation strategy. -Often mistakenly thought as a technical implementation in which a new system or suite of tools changes how businesses perform, when really it is a company wide process that involves both technology and people.

Digital masters

-Strong overarching digital vision -Good governance -Many digital initiatives generating business value in measurable ways -Strong digital culture They truly understand how to drive value with digital transformation. Theycombine a transformative vision, careful governance and engagement, with sufficient investment in new opportunities. Through vision and engagement, they develop a digital culture that can envision further changes and implement them wisely. By investing and carefully coordinating digital initiatives, they continuously advance their digital competitive advantage.

Network-oriented organization

-Unknown digital tomorrow -Agile, innovative -Fast and dynamic -Unclear economic output

What Assets will be valuable in a digitally transformed business

-Valuable -Rare -Inmitable -Organized

Crafting a digital vision

-Vision that builds on their own strengths, engages employees and can evolve over time Digital master companies have a shared digital vision -Creating transformative business change means a competitive advantage when: -Defining a clear intent and outcome -Make your digital vision specific enough to give employees a clear direction, while giving them the flexibility to build on it -Evolving the vision over time

Digital Enablers

-World Wide Web -Open source software

Six Stages of Digital Business Life Cycle

1. Analog 2. Web 3. E-Business 4. Digital Marketing 5. Digital Business 6. Autonomous

New Customer Mindset

1. Anytime, anywhere, any device 2. Want it now 3. Free 4. Designing the experience 5. Transparency

Fields of Action for open innovation concepts

1. Crowdsourced innovation 2. User-generated content (UGC) 3. Co-creation or co-production

3 Battlegrounds for the digital customer

1. Products and services to experiences 2. Hyperpersonalization 3. Ownership to access

open innovation

A model that assumes that companies can improve their business to use external ad internal ideas, and the internal and external paths to market, which will contribute to their development

Innovation trigger (HC)

A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven

World Wide Web (WWW)

A system for finding information on the Internet through the use of linked documents.

How of a business model

Activities

digital disruption

Adapting to changing times involve not blocking your business just to operational effectiveness. The focus is often put in quality time, and cost optimization. The approach of the digital disruption processes is different.

Level of change

Best measured by the degree to which individual expectations are disrupted, and the time taken to recover from the disruption

Operational Analytics

Businesses may forecast behavior or staff workload -Data science allows hotels to predict demand and patterns of customer behavior more accurately

Traditional Organization

Centralized authority focused on top level decision making -Clear objectives -Operational today -Incremental optimization -Clear economic output -Risk of organizational resistance

Autonomous stage (6 stages)

Companies use humanlike technologies or have applications that completely replace the human beings. Digitization and dematerialization is reached.

Digitization

Conversion of data with sensors and IoT

Transformation

Creation of the business. Meet the guest's needs and preferences, improve the efficiency of your operations and increase your revenues.

Hyperpersonalization

Customers expect and value increasingly personalized interactions at all points of their journey, and digital technology is enabling companies to deliver personalization economically at scale.

Innovation Team

Dedicated team dealing with innovative digital projects within the company. The persons responsible are usually fully associated with the generation of innovative ideas and the coordination of innovation projects. Projects are implemented either by temporary purchase of external resources or through the own internal capacity of of the hierarchical organization part. New concepts and solutions are integrated directly and without offset.

Development of business model innovations (BMI)

Describes the basic principle by which an organization creates, communicates ad records value.

Digital business (6 stages)

Digitization runs through the entire business model and does not remain focused on marketing alone. - Further convergence of people, things, and processes is happening. -Requires the creation of smart data for making business decisions - Seamless integration. -Leads to the creation of an ecosystem.

Operational operations

Digitizing to manage the business in real time and on a demand-driven basis

Ownership to Access

Enabled by digital platforms, customers are substituting ownership of goods with access-based models. Companies should evaluate opportunities to cater to customer preferences for access-based models before competitors or start-ups sweep in.

Horizon 1 (3 HM)

Existing business logic of the company. An incremental digital optimization is needed.

Velocity (Big Data)

Fast rate at which data records are collected, recreated, updated or deleted completely. -The forms of data collection, which are reflected in the required loading and updated times, have an effect on these change cycles. -Some internet-enabled smart products operate in real time, or near real time and will require real-time evaluation and action

Gartner's Hype Cycle

Graphical depiction of a common pattern that arises with each new technology or other innovation

Who, what, how and why of a business

How the business of a company works

Leadership capability

How to measure management aspects such as vision, governance and the digital skills of the workforce.

Unstructured Participation (e.g. VC, Business Angels)

In the networked-oriented organization part is seen as an investment vehicle. Exchange with the hierarchical organization part of the parent company takes place only on the basis of regular service relationship. Promising established companies or start-up are incorporated either completely at once or partially by a significant investment.

Internal innovation lab/ innovation center

In the networked-oriented organization part new business are worked on according to the latest creative and innovative methods. Employees of the hierarchical organization part are regularly involved in the innovation process, in which workshops or even longer lasting formats are being held in order to generate customer insights and specific ideas or to evaluate and further develop already generated solutions.

Incubators

Independent programs or subsidiaries founded to this end that focus on founder teams with promising ideas or existing start-ups. In general this means a larger investment than in the case of accelerators. The start-ups initially remain without time limitation in the incubator, while providing the founding team with for example, working space and managerial support. An exchange with the hierarchical organization take according to individual needs. These start-ups will continue to operate as independent organizations or to be integrated by acquiring remaining shares.

AI

Is a wide-ranging branch of computer science concerned with building smart machines capable of performing tasks that typically require human intelligence. AI is an interdisciplinary science with multiple approaches, but advancements in machine learning and deep learning are creating a paradigm shift in virtually every sector of the tech industry.

Main concern with data

Large amounts of data, which cannot be sufficiently processed by traditional databases and data management tools

Customer experience

Reenvisioning the CX Digital has to help the store partners and help the company be the way that it can be. Tell the story, brand, and relationship

Horizon 2 (3HM)

New business model options in existing markets

Horizon 3 (3HM)

New disruptive business models

Analog business

Not using web-based applications. This stage of development was at the height of business before internets came into being. The primary targets were to improve revenue or reduce costs.

Products and services to experiences

Offering just goods and services is no longer enough for businesses to achieve success. A number of companies are using digital technologies to offer customers unique and unforgettable experiences, as an increasingly important differentiator alongside the quality of their core offering.

Mechanization

Opening of factory production by the invention of the steam engine

E-Business (6 stages)

Opportunities that provide sales and procurement via the internet are comprehensively exploited. The goals of the analog business achieve scalable performance when combined with the reach of the internet. Key is not only to focus on the business relationship, but also integration. Uses internet to leverage its reach across to the mass. E-business exploits the reach, availability and ubiquity of the internet and was able to connect customers and businesses together.

2 structures, one organization

Organizational dualism Competing with digital disruptors that are agile, innovative, fast and dynamic

User generated content

Original content that is created by the audience of the brand. This content can be anything, from comments on a blog to photos and videos.

Variety (Big Data)

Refers to the many types of data that are available like company's data ppol. Traditional data types were structured and fit neatly in a relational database With the rise of big data, data comes in new unstructured data types.

Framing a BMI

Requires the continuos and parallel development of business models at different levels of innovation. -Not start with the technology - Start on how to deliver value operationally at profit -Exploit the possibilities offered by a digital technology to help getting there smarter, cheaper and faster.

Crowdsourced innovation

People help generate the content for the source such as Waze.

Change

Planned or unplanned shift in the status quo

Web Based (6 stages)

Primarily use internet communications. The business had a good presence on the internet which was mostly used for basic level promotions of making people familiar with the name and its workings. Attributes: - Business is engaged in making its presence known to increase its business volumes by increasing personal traffic, phone calls or email. - Security wise, they used to consider internet too risky as technology for secure transactions were not in place yet.

Digitalization

Process of adaption with data driven process and analytics

What in a business of a company

Product or service

Automation

Productivity revolution with factory automation

Organizational change from the inside vs.outside in

Setting one digital vision and direction but working at multiple speeds and layers. Each part of the organization needs to move at a different pace, but in the same direction. Executing through intelligent experimentation to rapidly test the hypotheses, advancing

Reenvisioning business models

Shifting what you sell, how we sell and how to make money from it

Exponential Business Model

Shoot for the stars. Looks at the same key areas as a traditional business model but their goals are different. Get 10x more growth.

Linear Business Model

Slow and steady approach. Everything occurs sequentially and flows in the same direction. Use raw materials to produce something, distribute and get paid, moving to the next customer.

Cyber-Physical Systems (CPS)

Smart networked systems with embedded sensors, processors, and actuators that are designed to sense and interact with the physical world and support real-time, guaranteed performance in safety-critical applications.

Open Source Software (OSS)

Software that is free and where anyone can look at and potentially modify the code.

Industrialization

Standardization and start of division of labor using conveyor belts

Accelerators

Structured programs that repeated at regular intervals by subsidiaries established for this purpose. Start-ups are attracted by innovative projects which are fitting to the industry focus of the accelerator. In exchange for less than 10% equity, the start-up future development is accelerated. Selection and support processes ensures quality within the porfolio. The assigned staff of the network organization designs the accelerator, and mentors guide the development of the portfolio companies. Promising start-ups will continue to operate as independent companies or will be integrated through acquisition.

Why use the six stages of digital business life cycle

This Life Cycle is designed to help companies have a precise understanding of their current stage of digital business transformation, and then to identify the way forward with the support of top level management and board of directors, given the complexities of integrating with the world of digital business.

Digital capability

What the level of digitization of crucial processes and the level of use of digital technologies

Co-creation or co-production

When customers are integrated into the production process or realizing creation in production.

Digital marketing (6 stages)

When digitization runs through the entire marketing and a comprehensively online and offline customer experience is created. - No longer distinction between online and offline - Led to a more closer connect with the customers, their needs, preferences and aspirations. Also followe the increase in the influencing power of customers due to the availability of many players and the power to choose a vendor or to migrate to another.

Digital Age

a possible fifth era of specialized electronic tribes contentious over diverse beliefs and values

Disruptive Innovation

a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors

dual organization

network-oriented and hierarchal

User Experience

the overall experience of a person using a product such as a website or computer application, especially in terms of how easy or pleasing it is to use. More important to have UX than design

Predictive analysis

the use of data warehouses and complex algorithms to forecast future events, based on historical trends and calculated probabilities

3 V's of Big Data

volume velocity variety