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Digital Disruptives
The rise of digital business ecosystems
@jeremycaine
#nemode2013
© 2013 IBM Corporation
2
DigitalDigitalDigitalDigital
FirstFirstFirstFirst
Source: Google
3 Source: IBM
4
5
1995
2013
6
7
Net Promoter Stars by Sector
2136TripAdvisorTravel Websites
4170Apple iPhoneSmartphones
4369Amazon.comOnline Shopping
27...
8
In the past customers came to do transactions with
businesses over a variety of their channels
Systems of Record
Web Pho...
9
Technology and societal changes have brought about omni-
channel behaviour from customers
Now we are building
Systems of...
10
A convergence of key technologies is enabling this change
SocialMobile
CloudAnalytics
AppApp
Location
UI simplicity
Cam...
11
BusinessBusinessBusinessBusiness
ModelModelModelModel
ThinkingThinkingThinkingThinking
Source: businessmodelgeneration....
12
The Stand Out digital businesses have similar characteristics
Adjacency
New product, service or market
Geographic expan...
13
What business model direction do you need to take?
Disruptive
Non-core industry
Novel use of technology
New monetisatio...
14
The rules of successful* companies over the last 44 years
Source: Harvard Business Review, April 2013
* Performance mea...
15
Value Creation – Price or Non-Price?
16
Analysing Hassle Maps can help identify the technology and
organisational change that can enable Value Capture
Go to Vi...
17
Your data
on them
Their data
shared
Outside data
influencing
insight
Transactions
History
Personal details
Net worth
Wo...
18
18
Figuring out new business models is not necessarily obvious
© Foursquare Labs
19
Digital Business Model
Source: MIT Sloan Management Review, Weill
20
EcosystemEcosystemEcosystemEcosystem
EvolutionEvolutionEvolutionEvolution
21 21
BusinessBusiness Business
Platform
Business
Platform
Disruptive
Business
Platform
Disruptive
Business
Platform
Produ...
22
Digital Disruptives are building digital business models
that are exploiting new technology capabilities
Value Chain Ec...
23
business ecosystem =
interacting organisation and individuals
producing products / services
integrating customers
ecosy...
24 © 2013 IBM Corporation
Design for a Digital First experience
Build for differentiation and value capture
Data at the he...
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Digital Disruptives

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The rise of the digital business ecosystem presented at NEMODE community meeting July 2013

Published in: Technology, Business
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Digital Disruptives

  1. 1. 1 Digital Disruptives The rise of digital business ecosystems @jeremycaine #nemode2013 © 2013 IBM Corporation
  2. 2. 2 DigitalDigitalDigitalDigital FirstFirstFirstFirst Source: Google
  3. 3. 3 Source: IBM
  4. 4. 4
  5. 5. 5 1995 2013
  6. 6. 6
  7. 7. 7 Net Promoter Stars by Sector 2136TripAdvisorTravel Websites 4170Apple iPhoneSmartphones 4369Amazon.comOnline Shopping 2750Netflix OnlineOnline Entertainment 929Brighthouse NetworksInternet Service 4180USAAHome Insurance 1235KaiserHealth Insurance 6278CostcoDepartment / Speciality Stores 2546American ExpressCredit Cards 1556VerizonCable / Satellite TV 2978USAABanking 4176USAAAuto Insurance 3066SouthwestAirlines Industry AverageTop Firm NPSLeading CompanyIndustry Source: Satmetrix 2013 Net Promoter Benchmark Study of US Consumers
  8. 8. 8 In the past customers came to do transactions with businesses over a variety of their channels Systems of Record Web Phone Branch Systems of Record Web Phone Branch Systems of Record Web Phone Branch We built multi-channel capabilities atop our Systems of Record © 2013 IBM Corporation
  9. 9. 9 Technology and societal changes have brought about omni- channel behaviour from customers Now we are building Systems of Engagement to serve the empowered consumer Systems of Record Systems of Record Systems of Record Systems of Engagement Systems of Engagement Systems of Engagement Social Chat Tablet Smartphone Web Telephone Physical WorldSmart TV Augmented Reality © 2013 IBM Corporation
  10. 10. 10 A convergence of key technologies is enabling this change SocialMobile CloudAnalytics AppApp Location UI simplicity Camera Accelerometer Any-to-many-to-one Gamification Unstructured Data Massive content New Processing Visualisation Open Data Sets Software service API Security © 2013 IBM Corporation
  11. 11. 11 BusinessBusinessBusinessBusiness ModelModelModelModel ThinkingThinkingThinkingThinking Source: businessmodelgeneration.com
  12. 12. 12 The Stand Out digital businesses have similar characteristics Adjacency New product, service or market Geographic expansion Differentiation Elicit market segment from data Myth of the Average Customer Scaling Ecosystems Third party collaborators Automated contractual relationships Dynamic Operating Model Business Platforms, software ecosystems Cloud computing service infrastructure Source: Elastic Enterprise, Vilatari and Shaughnessy
  13. 13. 13 What business model direction do you need to take? Disruptive Non-core industry Novel use of technology New monetisation models INDUSTRYTARGET PRODUCT / SERVICE Core Existing Competencies Existing market Traditional Physical products Multi-channel service Transaction revenue Digital Instrumented / Digitised Data influenced usage Reciprocal revenues © 2013 IBM Corporation
  14. 14. 14 The rules of successful* companies over the last 44 years Source: Harvard Business Review, April 2013 * Performance measured using Return on Assets (ROA); n = 25,453 1 2 Better before cheaper Complete on differentiators other than price Revenue before cost Prioritise increasing revenue over reducing costs Business Model = Value Creation + Value Capture
  15. 15. 15 Value Creation – Price or Non-Price?
  16. 16. 16 Analysing Hassle Maps can help identify the technology and organisational change that can enable Value Capture Go to Video Store Choose Video Take Home Watch Video Forget Video Take Video Back Pay Late Fee Get Another Go Online Choose Video Post Delivery Watch Video Keep as Long As You Want Easy Post Back Mechanism No Late Fees Get Another Wish list matched to available stock Strategically geographic distribution centres Envelope designed to not be mail exception The Killer Punch Source: Demand, Slywotzky and Weber
  17. 17. 17 Your data on them Their data shared Outside data influencing insight Transactions History Personal details Net worth World events Real-time Capitalise React What’s happening? Opinion Self-promotion Information sharing Data is the new landfill © 2013 IBM Corporation Data driven business models – we have passed the tipping point of volume and ability to analyse in real time
  18. 18. 18 18 Figuring out new business models is not necessarily obvious © Foursquare Labs
  19. 19. 19 Digital Business Model Source: MIT Sloan Management Review, Weill
  20. 20. 20 EcosystemEcosystemEcosystemEcosystem EvolutionEvolutionEvolutionEvolution
  21. 21. 21 21 BusinessBusiness Business Platform Business Platform Disruptive Business Platform Disruptive Business Platform Products & Services Capabilities Costs, profits Strategies Revenue streams Capability enhancement Technology enablement Processing efficiency Increase straight- through processing Per-click business models Integrated Product- Service systems Value creation and market control Multi-sided business models Open connectedness to partners and suppliers Depending on your legacy starting point technology led business platforms are the foundation for becoming a Digital Disruptive © 2013 IBM Corporation
  22. 22. 22 Digital Disruptives are building digital business models that are exploiting new technology capabilities Value Chain Ecosystem Complete Partial KNOWLEDGEOFENDUCSTOMER BUSINESS DESIGN Ecosystem Driver • Open platform based on current reach or brand • Greater customer experience • Uses customer knowledge to match needs with providers • Core skills: extracts “rents”, exploits knowledge of customer Examples: Amazon Omni-channel Business • “owns customer relationship • Telecom Modular Producer • Creates plug and play products and services • Adapts to any ecosystem • Core skills: constant innovation of product and service Examples: Paypal Omni-channel Business • “owns” customer relationship • Provides multi-product customer experience • Core skills: integrated value chain, cross-sells Examples: USAA, CBA, Sears, France Telecom Supplier • Has potential loss of power • Core skills: low-cost production, incremental innovation Examples: insurance via agent, electronic producer via retailers Source: MIT Sloan CISR © 2013 IBM Corporation
  23. 23. 23 business ecosystem = interacting organisation and individuals producing products / services integrating customers ecosystem leader mutual goals ^^^^ digitaldigitaldigitaldigital via technology platform provider virtual and / or physical web, devices, things monetisation Digital Disruptives are re-shaping the economy with their digital business ecosystems © 2013 IBM Corporation
  24. 24. 24 © 2013 IBM Corporation Design for a Digital First experience Build for differentiation and value capture Data at the heart of the business model Instrument, gather, exploit Automate and Connect Scale and open up the operating model

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