Your Business Model and Digital Transformation 

As a software technologist, my mind is inclined first to think of technology rather than to consider the impact of digital transformation on the business model of an organization. I want to skip straight to looking at products, architectures and technologies to implement a new, transformative solution for my company InfoStrat or one of our clients.

I should ignore my preference for technology, though, and start any new initiative with serious consideration of the business model and also the business culture.

Are you open to changing your business model? Digital transformation initiatives can force you to re-examine your business and come up with new ways of looking at your contribution of value to your customers, your supply chain, and relationships with other industry partners or even competitors. Unsuccessful attempts to change your business model can be expensive and damaging to your business, so digital transformation should not be undertaken lightly.

Serious intentional change can only come through determined leadership and buy-in from executive sponsors. Having a tiger team of nimble thought leaders and technology experts can help an initiative but they are not sufficient without broader backing. The greatest incentive for change is from competitive pressure or failure to catch a trend that threatens your industry — and no industry seems safe these days.

Amazon has changed their business model several times in the company’s history, and continues to be a driver of digital transformation. Starting as a bookseller, not exactly a growth industry at the time, Amazon became an e-commerce pioneer. Along the way, Amazon created cloud infrastructure to serve its own purposes which it realized would be valuable to other companies and customers. Today, Amazon is poised to disrupt the transportation and logistics industries as well whether through drones, autonomous trucks, pickup centers and more.

What does all this mean to a small business? Can you undertake a journey of digital transformation based on what you learn from leaders such as Amazon?

The World Economic Forum has published a series of case studies on digital transformation, including companies such as Audi, Airbus, Disney and DHL. You can gain insights from case studies such as these which are in your industry or in industries from which you can draw analogies to yours. If you are a distributor of physical goods, case studies on logistics may give you insights on avenues to transform your business.

The transformation of Lego is obvious from the new Lego Batman movie. Here is a company that makes classic children’s plastic toys that has embraced robots, movie tie-ins, and ultimately their own movies to engage a new generation of children and parents alike.

Adobe, the pioneer of desktop publishing and electronic documents, has embraced the cloud as its distribution mechanism for customers of the Adobe Creative Suite and other products. I probably would not have purchased all the products that make up this suite but benefit from the low monthly pricing and updates available through this business model. The new Adobe business model is to sell subscriptions rather than traditional software licenses.

Like Amazon did with its e-commerce, Adobe is now selling tools to other business to help them with their own digital transformation initiatives. These include content creation, digital documents, marketing automation, and analytics.