Thanks to a variety of trends and technologies in the private (social media, smart home, mobile internet…) and business environments (3D printing, advanced robotics, machine learning, etc.), the phenomenon of digitalisation has long been an influential one. The digital change can be felt in both our private and professional lives, and is gaining momentum with enormous speed.
Figure 1: Examples of disruptive technologies over the course of time
In regard to the expectations associated with digital change, there is a great deal of uncertainty: projections for the future range from substantial opportunities to existential risks. Against this background, “digitalisation” has thus far been viewed by companies as a means of increasing efficiency. However, the structural changes associated with technological progress have an impact far beyond this. Within the framework of digital change, it is the intelligent, global networking of market participants (people, things and machines), in particular, that represents an explosive mix with the potential to significantly alter or even break up existing value chains and established business models. As such, we can understand digitalisation and the resulting digital change as part of the holistic shift to a new digital economy. The associated digital transformation uses technological advances to develop innovative value chains and business models. In the sense of Schumpeter’s “creative destruction”, this leads to the aforementioned disruption of established value chain structures and business models. Examples of such digital disruption are:
Figure 2: Examples of disruptive business models
The examples illustrate how modern technologies can exploit unused resources and be transferred into new digital business models in combination with the corresponding customer benefits. Case studies for the entry of such dynamic, digitally-oriented market participants can be found in almost all industries. As a consequence, pressure is increasing on the old brick-and-mortar “top dogs” to find their own answers to the challenges of digital change.
One particularly expansive and multifaceted example is the Amazon ecosystem.
Figure 3: Amazon as an example of a disruptive ecosystem
As can be seen in Figure 3, the Amazon ecosystem extends into many areas and includes both private (B2C) and business (B2B) offerings. Furthermore, media content, hardware and the marketing of these are all included in the ecosystem. This results in disruption by Amazon on a wide variety of fronts and across a diverse range of sectors.
Against the backdrop of the wide-ranging opportunities and risks of the digital economy and the associated digital transformation, the field of digitalisation focuses primarily on the following six areas:
- Digital disruption health check & strategy: that is, an analysis of the extent to which a risk of digital disruption to the value chain and the entire business model exists as a result of new, dynamic, digitally-oriented market participants.
- Digital readiness: that is, the creation of a comparative competitive analysis using specific evaluation criteria for digitalisation maturity in regard to strategy, organisation, customers, competitors and technology.
- Digital transformation strategy: that is, creation of an individual roadmap for the systematic digital transformation of your company in line with specific stages of digital evolution.
- Industry 4.0: that is, the interlinking of actors, processes and data with state-of-the-art information and communication technology, with the aim of intelligent and flexible production.
- Internet of things (IoT): that is, the analysis of strategic, value-adding integration options for the digital interactions between the physical and real worlds created by the Internet of Things.
- Artificial Intelligence (AI) / Machine Learning (ML): that is, an analysis of the potential for increasing value through integrating machine learning and artificial intelligence into complex, expansive processes.
- Digital operational excellence: that is, analysis of the operational optimisation potential in accordance with a digital transformation strategy and creation of a roadmap with corresponding measures.
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Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.Learn more