Thought Leadership on Business Strategy & Technology Value presented by Paragon Solutions.
The phrase “digital transformation” in business today inherently refers to change in the way businesses have to engage customers to deliver in an entirely new fashion.
Increasingly they are expected to provide services-led experiences in terms of the way they engage with products and services. A large part of this is about leveraging the ecosystem to amplify the experience, but most challenging is the associated “business model shift” that all companies embarking on their digital transformation journey will have to undergo. It involves a completely new vision for the company that is cross-domain and impacts every division, but it could take various forms.
IDC believes that an organization’s ability to make money from any of these business model shifts is directly correlated to its digital maturity across a number of dimensions.
Based on information and data from IDC customers, surveys, public sources of data, and anecdotal evidence gathered by analyst-client interactions, IDC explores five business model shifts with associated case studies to help demonstrate best practices in digital transformation in the IDC white paper, Monetizing Digital Transformation Blending the Physical and Digital Worlds to Generate New Revenue Streams. IDC interviewed eight organizations to assess digital transformation maturity, and their focus on billing and revenue management as part of their efforts in this space.
IDC’s research revealed multiple paths to digital transformation, with 5 Digital Transformation “Business Model Shift” stages being:
- Subscriptions: Moving from physical product to a subscription service leveraging usage-based pricing models as opposed to a traditional product approach. The subscription model needs to be effectively built into the product (depending on whether it is user based or transaction based). Use dynamic pricing models as a competitive differentiator to enhance the customer experience.
- Ecosystem First: Taking an “ecosystem first” approach to delivering new products and services to market with a focus on partners and third-party stakeholders. Reassess the traditional “make-sell” enterprise orientation to one more dependent on developing the ability to engage multilaterally with the external ecosystem (e.g., customers, markets, partners, competitors, regulators) to engage new markets that were previously inaccessible.
- Customer Experience: Delivering an entirely new customer experience through a variety of channels with a focus on ecommerce.Gain insights by analyzing consumer data to ensure that your organization can deliver the ideal omni-channel experience based on a highly personalized engagement approach with the end customer.
- New Markets: Targeting an entirely new market, with a new set of customers, that brings a different level of scale and volume that had not been dealt with previously. Ensure a clear approach to the way that revenues are recognized, allocated, and reported across business units and to shareholders based on the new business model compared with your traditional business. This will help to improve existing business processes and systems that may be ill-adapted for new businesses with different scale that require greater levels of automation for the customer engagement and revenue management processes.