The Value of Data for Digital Business Models

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This presentation outlines the challenges and opportunities of digitization and highlights the important role of data quality. The presentation uses a well-known business model conceptualization to …

This presentation outlines the challenges and opportunities of digitization and highlights the important role of data quality. The presentation uses a well-known business model conceptualization to illustrate successful digitization examples.

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  • 1. © Fraunhofer DIGITAL BUSINESS MODELS AND THE VALUE OF DATA Prof. Dr. Boris Otto Nice, June 6, 2014
  • 2. © Fraunhofer AGENDA  Digitization and the Data Economy  Data-Driven Business Models  The Way Ahead
  • 3. © Fraunhofer Digitization is the overarching development today affecting every industry Source: Financial Times, 2014.
  • 4. © Fraunhofer The number of different data sources is increasing 46 54 Social media (Facebook, Twitter, Blogs etc.) 66 34 Internet data (Click Streams etc.) 47 53 Smart Grid (Sensor data, machine data.) 43 57 RFID tags and barcodes 39 61 GPS data 51 49 Financial data 51 49 Mobile device usage data What data sources do you exploit? Source: The Economist Intelligence Unit Limited: Big Data – Lessons from the leaders, 2012, n = 752, figures are percentages. Legend: already used planned to be used.
  • 5. © Fraunhofer Industrial Big Data is one key development in the Data Economy
  • 6. © Fraunhofer The other one is Social Big Data referring to our digital footprints Source: http://edublogs.misd.net/ric17nicoler/2013/02/14/my-digital-footprint/, 2014.
  • 7. © Fraunhofer AGENDA  Digitization and the Data Economy  Data-Driven Business Models  The Way Ahead
  • 8. © Fraunhofer Business model innovation is a prerequisite to sustain competitive advantage Source of the image: Jam Visual Thinking, 2014.
  • 9. © Fraunhofer Businesses have to answer the question as to how the Data Economy affects business model innovation
  • 10. © Fraunhofer Digital Business Models leverage data-centric value propositions Hybrid solutions Convenience Differentiation
  • 11. © Fraunhofer Customer value proposition goes beyond the business logic of free pricing models such as Facebook etc. If you’re not paying for it, you‘re not the customer - you‘re the product …
  • 12. © Fraunhofer adidas miCoach is a good example of data-driven customer value 1 2 3
  • 13. © Fraunhofer Digital Businesses use multiple channels to interact with the customer Churn prevention Recommender systems Personalized offers
  • 14. © Fraunhofer Multi-channel integration is key to successful Digital Business Models
  • 15. © Fraunhofer Digital Business Models use the power of data to improve operations Sales assistance Supply chain visibility Inventory mnagament
  • 16. © Fraunhofer Amazon patented “Anticipatory Shipping”  End-consumer centricity  Shipment before customer buys  Speculative Shipping  Reducing delivery times by predicting what buyers are going to buy before they actually do it  Analyzed data includes historical buying patterns, preferences expressed explicitly via surveys/questionnaires, demographic data, browsing habits, wish- lists and so on. 12-24-2013: Amazon US Patent
  • 17. © Fraunhofer Digital Business Models leverage the potentials of ecosystems Ecosystem Collaborative business processes Converging industries
  • 18. © Fraunhofer Competition is not within verticals any longer, but takes place cross-industry 2004 2014 Internet Search Internet Search Automotive Autonomous driving Energy Smart metering Telecommunications Fiber-to-the-Home
  • 19. © Fraunhofer Data is a strategic resource in Digital Business Models Data
  • 20. © Fraunhofer “Native” digital enterprises use a new generation of data management capabilities “Modern data markets will employ a whole new generation of technology, processes, and data science that supersedes the previous generation of data management systems”1 Cloud Computing Big Data Software Data Science and Machine Learning APIs Crowdsourcing and Social Processes Organizational & ICT Capabilities Source: Elbaz, Gil: Data Markets: The Emerging Data Economy. © 2012. http://techcrunch.com/2012/09/30/data-markets-the-emerging-data-economy/. Requested on 2014-02-07.
  • 21. © Fraunhofer The “Smart Service Welt” initiative advances our understanding of the “mechanics” of digital businesses Data Economy Focus on the Individual Data- centricity Hybrid Service Offerings Converging industries/ Ecosystems Cloud Platforms New Business Models
  • 22. © Fraunhofer AGENDA  Digitization and the Data Economy  Data-Driven Business Models  The Way Ahead
  • 23. © Fraunhofer Success is not guaranteed…
  • 24. © Fraunhofer Companies have to overcome a couple of challenges 52 % Inappropriate organizational structure 51 % Missing IT infrastructure and systems 46 %Poor data quality 45 %Lack of leadership 43 %Lack of functional expertise 31 %Lack of IT expertise Source: McKinsey: Minding your digital business. In: MicKinsey on Business Technology (2012) Nr. 27, S. 24-31.
  • 25. © Fraunhofer The Competence Center Digital Consumer Business (CC DCB) facilitates Digital Business Model innovation
  • 26. © Fraunhofer Please get in touch for further information Univ.-Prof. Dr. Ing. Boris Otto TU Dortmund University Audi-Endowed Chair of Supply Net Order Management LogistikCampus Joseph-v.-Fraunhofer-Straße 2-4 D-44227 Dortmund Tel.: +49-231-755-5959 Boris.Otto@tu-dortmund.de Fraunhofer-Institute for Material Flow and Logistics Director Information Management & Engineering Joseph-v.-Fraunhofer-Straße 2-4 D-44227 Dortmund Tel.: +49-231-9743-655 Boris.Otto@iml.fraunhofer.de