As organizations in every sector continue to pursue digital transformation strategies and programs to compete in an increasingly digital-first world, a key challenge is driving business model transformation.
Earlier posts in this blog series have covered the impact of digitalization on the market environment, along with digital leader actions with respect to organizational change and innovation. In this post, we’ll talk about business model change. Digital leaders are competing beyond boundaries and fundamentally changing their business and operating models to introduce innovative products and services, disrupt their markets, and drive competitive advantage.
The findings covered in this blog series are based on our 2017 CGI Client Global Insights, which includes insights from face-to-face interviews with more than 1,300 business and IT leaders, as well as research we conducted in partnership with IDC in which more than 200 business leaders were surveyed on the topic of organizational design.
Our findings show that innovating new business models and engaging within a wider ecosystem are key building blocks for digital transformation:
- 40% of organizations have a digital strategy at an enterprise level (up from just 12% in 2016)
- 55% of organizations want their digital transformation to deliver better innovation
- 54% of organizations want their digital transformation to drive growth
- 37% of organizations have included ecosystem partners in their strategy
- 46% of organizations are expanding their ecosystem to generate new revenue streams
How important is the ecosystem?
As the findings demonstrate, digital leaders understand the importance of thinking outside in and proactively engaging within the wider ecosystem of their business. This has become a critical part of their growth strategies. They’re expanding their ecosystems and creating new business combinations to achieve a number of strategic goals, including generating new revenue streams, driving innovation and accessing new markets, customers, talent, technologies and more.
To successfully transform their business models, digital leaders are focused on balancing the priorities of:
- Supporting the existing business, continuing to compete and driving efficiencies
- Innovating and incubating new business models, products and services
- Building the support required to transform the organization’s structure, management systems, culture, people and working practices to become an agile and customer-centric business
Organizations also are looking more closely at their supply networks. They’re re-evaluating the role of their suppliers and asking if those suppliers have the agility and digital capabilities necessary to continue delivering what they need in an increasingly dynamic market.
While partnering is not new, there are some new business combinations (e.g., crowd innovation, serendipity working locations, open source and crowd source development communities) that provide innovation opportunities but require the organization to adopt its commercial, legal and cultural position on collaboration.
Does your organization’s digital transformation strategy include new business combinations? How is your organization engaging in its ecosystem?
Share your thoughts in the comments or, if you would like to start a conversation, contact me.