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Digital Business Engineering
The document discusses the concept of digitization and its impact on business models, highlighting various challenges companies face, such as organizational structure and IT infrastructure. It introduces the Digital Business Engineering (DBE) methodology, which consists of phases that focus on understanding customer processes, designing digital products and capabilities, and mapping necessary data and technology. The approach offers business benefits like accelerated time-to-market and guided digital business design, informed by research and practical application.
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Digital Business Engineering
- 1. © Fraunhofer DIGITAL BUSINESSENGINEERING Prof. Dr. Boris Otto Dortmund, January 2015 Source: Financial Times, 2014.
- 2. © Fraunhofer CONTENT Digitization Digital Business Engineering Approach Business Benefits
- 3. © Fraunhofer Digitization isa term describing an array of various influential developments Society Business Technology Individualization »Shareconomy« Data privacy Consumer-centricity Hybrid services »Industrie 4.0« Cyber-physical systems In-memory-computing, Hadoop etc. Mobile and ubiquitous computing Digitization
- 4. © Fraunhofer These developmentsask for the impact of digitization on existing business models
- 5. © Fraunhofer In thisendeavor, companies across all industries are confronted with a set of open issues How does digitization affect our business model? Which digital services offer most value to our customers? What data is required? Where does the data come from? Whom do we need to partner with in order provide these services? What capabilities does our organization need to provide these services? What technology must be in place?
- 6. © Fraunhofer CONTENT Digitization Digital Business Engineering Approach Business Benefits
- 7. © Fraunhofer Companies haveto overcome various challenges when developing a digital business model 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.
- 8. © Fraunhofer Digital BusinessEngineering is a methodology for sustainable digital business transformation Digitization Digital Business Model Strategic Perspective Process Perspective Systems Perspective E2E Customer Process Design Ecosystem Design Digital Product & Service Design Digital Capabilities Design Data Mapping Digital Technology Architecture 1 2 3 4 5 6 Legend: E2E - End-to-End.
- 9. © Fraunhofer Digital BusinessEngineering (DBE) is a model-oriented and method-driven approach DBE Phase Description Goal Involved Roles Techniques 1 Customer Process Understand end-to-end customer process from outside- in Digital business development Sales and marketing a. Customer journeys b. Multi-channel analysis c. Consumer process modeling 2 Ecosystem Understand actors within customer process and customer interaction points Digital business development Sales and marketing Product management a. SWOT analysis b. Network analysis 3 Digital Products and Services Design digital products and services based on end-to-end understanding of customer process Digital business development Sales and marketing Product management Business architect a. Business model canvas b. Digital artifact design c. Design thinking 4 Digital Capabilities Identify capabilities needed to provide digital products and services Digital business development Business architect IT architect a. Capability modeling 5 Data mapping Identify data assets needed to provide digital products and services Digital business development Data architect IT architect a. Data architecture 6 Digital technology architecture Sketch digital technology architecture Data architect IT architect a. Digital tool chain
- 10. © Fraunhofer Technique 1a:Customer Journey Approach Orientierungsphase Finanzierungsphase Abschluss KundeMobiliar Kunden- berater Externe Partner Immobilien- plattform SuchtImmobilie Objektdaten Angebote Rückkaufwerte Lebensversicherung Bank Angebot Bestätigung eRechnung Bearbeiter Kunden- betreuer BearbeiterBearbeiter
- 11. © Fraunhofer Technique 1b:Multi-Channel Analysis Channel used in consumer process illustrative channel use. Information Advice Return ServiceShipment Track and Trace SaleAvailability Payment Print TV/Radio Mailing Store Internet E-Mail Phone Fax Text message Channels Consumer Process Source: Migros.
- 12. © Fraunhofer Technique 1c:Consumer Process Modeling «Ecosystem» Information Flow.Process Scope Interact w/ Service Provider Use Service Reflect Customer Experience Book Search and Get Info Consumer Process Legend:
- 13. © Fraunhofer Technique 2b:Network Analysis in the Ecosystem 2007 Media 2012 NB: Graphs show betweenness centrality, i.e. the distribution of power in a network.
- 14. © Fraunhofer Technique 3b:Digital Artifact Design With digital technology the content and services gets separated from the physical medium This leads to a modular layered product architecture The modular layers can be decoupled Products become digital platforms by themselves Multiple stakeholders can contribute – and compete! – at different stages across the four layers Ex.: Apple and amazon with iPad vs. Kindle and iPad & Apps cables, transmitters network standards application functionality data products computer hardware operating system Source: Yoo et al. (2010).
- 15. © Fraunhofer Technique 3c:Design Thinking Design Thinking Stage Gate TRIZ Six Sigma Scrum Improvement / Development Incremental innovation Revolutionary innovation Disruptive innovation ... creates a new market which unexpectedly overtakes an existing market. ... an unexpected innovation in an existing market. ... the gradual improvement of a product by using new insights. ... the improvement/development of a product through better use of existing resources. Source: University of St. Gallen, Institute of Information Management, 2014.
- 16. © Fraunhofer Technique 4a:Digital Capability Modeling Hybrid (modular) product platform management Innovation & market capitalizing agility Value proposition Business analytics & information-driven problem-solving/ decision making Operational adjustment agility Process automation & digitization/ virtualization Digital / IT mindset & abilities Value architecture Multi-channel connectivity to ecosystem Value network Revenue creation models for hybrid modular products Cost optimization & scalability of ordinary capabilities / resources Value finance Organizational capabilities (“competitive priorities for digital business”) IS capabilities Ecosystem control Clear lead / ownership of digital initiatives IT business partnerships Analytics ability: recognize and prepare the relevant data Metadata: data provenance & data credibility transparency MDM & metadata mgmt. „The golden record“ across systems and ecosystem New databases and BI tools understanding IT personnel expertise Ad-hoc, predictive & prescriptive analytics Visualization & self-service BIDWH & BI Data integration Data privacy & data security Scalability, speed & cost efficiency Data architecture Governance of external and shared data Source: University of St. Gallen, Institute of Information Management, 2014.
- 17. © Fraunhofer Technique 5a:Data Mapping Source: Hilti, 2014.
- 18. © Fraunhofer CONTENT Digitization Digital Business Engineering Approach Business Benefits
- 19. © Fraunhofer The DigitalBusiness Engineering approach delivers multiple business benefits Accelerated time-to-market Guided digital business design Fast deployment Leading edge Built on latest knowledge on digital business models Research-driven Proven methodology Sound method engineering expertise Used in real-life cases Neutral approach Combines best practices
- 20. © Fraunhofer DIGITAL BUSINESSENGINEERING Prof. Dr. Boris Otto Dortmund, January 2015 Source: Financial Times, 2014.