Every company is faced with the task of getting very individual answers to the digital transformation and asserting itself in the market environment. Medium-sized companies are also increasingly relying on the development of digital business models in order to either expand or expand their existing business.
But what is generally important when developing digital business models? What mistakes should you be aware of when choosing business ideas? And what should you pay attention to when composing an innovation team?
Below are 4 tips that will help you become even more successful in developing a digital business model.
Commitment at management level
Employees perceive management as the central driver for successful implementation of the digital transformation. The commitment of the management is an interplay of many factors of all roles involved, regardless of whether management, CIO / CDO or middle management (to name just a few roles). In entrepreneurial practice, the generation of innovations and the development of digital business models from within one's own ranks is often desired (“bottom up”). For the success of any project, however, it must be understood that digital transformation is still a top-top process that is driven by management.
With the start of your project to develop a digital business model, you should get the commitment of the management. To this end, it can help to hold a joint kick-off workshop at the beginning of business model development, to work out a project schedule or to involve management in the decision-making process at certain times. It also helps that you agree on defined KPIs with management. KPIs enable management to measure success using specific measured values and offer you the opportunity to develop the strategy of the business model in a targeted manner.
Assign your own teams to develop
The development of digital business models from day-to-day business presents employees with new challenges. On the one hand, this concerns the way in which employees work together in innovation teams and, on the other hand, the technologies used to implement developed ideas. The most important learning experiences along the entire product development process arise within this innovation team. The whole company can benefit from these learning experiences. In order to maximize the project and thus also the learning success, it is advisable to start the business model development with as constant a team as possible.
When selecting the employees for the innovation teams, it is important to select those employees who can offer the innovation team the most added value in the matter. This is not about commissioning “digital natives” with the development of digital business models. It's about including those employees who have the right mindset for the topic and who have contact with the target group. In order to keep the team efficient and agile, even a small team size of 2 - 5 people is sufficient. Missing know-how, for example in UI / UX design, business design or development, can be brought into the team by experienced digital experts. At the same time, digital experts help you to evaluate the return on investment with realistic data, to choose the right strategy and to keep an eye on the implementation at an early stage.
Good business ideas make good use of assets
Unlike startups, innovation teams in medium-sized companies never start from scratch. Established companies have existing structures and assets that should be meaningfully incorporated into the business strategy when developing digital business models. Examples of structures and assets are:
- Supplier relationships and networks
- Assets, such as machines or manufacturing facilities
- Technical infrastructure
- Corporate networks
- (supra-regional) sales networks
- Existing customer relationships
Even for innovation units that work with the so-called “greenfield” approach, it makes sense to check the extent to which structures and assets can be used for their own benefit when generating ideas. Good business models manage to meaningfully incorporate the existing structures and assets and thus contribute to the success of the business model.
Only implemented business ideas have added value
In order to advance digitization, working groups are created in which ideas for digitization are developed. A large number of service providers have specialized in accompanying companies precisely on this path. However, digital transformation is not about sketching ideas on PowerPoint slides. It's about implementing ideas and learning from them.
Companies are only successful in digital transformation if digital services and digital products can increase sales, reduce costs or increase customer satisfaction. It is of course important to always generate new ideas that contribute precisely to these goals. The real added value for companies, however, lies in the successful implementation of precisely these ideas. Through intensive project work, employees also learn “on the job” the digital mindset that is important for digital transformation in the company. Even if a business idea fails in the end, the case for companies pays off: The collected empirical values are difficult to evaluate in monetary terms, but are of immense importance for future digital projects and continuous digital transformation of the company.