Article Synopsis :
What percentage of your company’s revenues are under threat from digital disruption over the next 5 years? (Hint: for large firms it’s 53%. For all firms it’s 33%.)
In “Leading the Next Generation Business: Increased Customer Intimacy & Digital Ecosystems,” Peter Weill from MIT Sloan discusses the impact of increasing digitisation on the enterprise. Irrespective of industry, the report suggests four goals as it relates to customers:
- Have great information about customers’ goals and ‘life events.’
- Amplify the customer voice inside your company.
- Implement evidence-based decision making.
- Deliver integrated multi-product / channel customer experience.
As it relates to business design, Mr. Weill suggests four goals:
- Be the first choice in your space.
- Be great at partnerships and acquisitions.
- Deliver service-enabled core business transactions (with exposed APIs)
- Compliance as a competence.
The report shares IT-enabled transformation initiatives and offers case studies on what it takes to become an ecosystem driver in highly volatile markets.
A key insight in the report is that businesses zeroed in on value chains are at a disadvantage; they need to think more in terms of digital business ecosystems. Companies with a higher percentage of revenues from digital ecosystems enjoy higher profit margins than peers who still bank on traditional modes of operation. The report presents a high-level framework for helping executives think about emerging environments within the context of four distinct business models:
- Omnichannel businesses
- Ecosystem drivers
- Modular producers
Lastly, the report touches on ‘softscaling’ (i.e., informed empathy based on data) as a viable growth strategy for particularly volatile environments.
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