©2019 by David J Banger | Founder CHANGE lead ® 

Insights from "What's Your Digital Business Model?"

The opening sentence of the book, "digital transformation is not about technology; it's about change. And it is not a matter of if, but a question of when and how."


Organisations are not great at transforming, and the book includes six key questions that help organisations "course correct". Additionally, there are self-assessments at the end of every chapter to help guide areas of focus. These questions are carefully crafted based on the experience of the authors Peter Weill and Stephanie L. Woerner, both MIT digital research leaders. They conducted fifty-plus workshops for C-level executive teams and surveyed 334 enterprises. In the workshops, they noticed that the higher the threat of digital disruption, the more radical the change would need to be and this was exceptionally challenging for people within the enterprise as they struggled to make decisions.


The book simplifies the complexity of what businesses can transform; their research concludes on two critical dimensions of change being; getting closer to end customers

and moving from supplier models to digital ecosystems. The organisations that have achieved both outperformed their average industry profitability by 25%.


The Digital Business Model framework is introduced early on (page 8) and continues to be referred to throughout; it will be necessary for any organisation to determine if they are a (% of organisations align to this with the research);

  • Ecosystem driver (31%)

  • Omni channel (18%)

  • Supplier (18%)

  • Modular producers 15%.


What can your organisation do to compete in a digital economy? Another insightful gem, with at least one or more of three capabilities:

  • Content, products and information

  • Customer experience, multi-channel and multi-product

  • Digitised platforms, internal and external.


How? By mastering these through;

  • Refreshing and enriching content, new sources of revenues will be driven

  • Superior customer experiences, creating cross seeking opportunities resulting in increased revenue per customer

  • Digitised platforms to enable economies of scale for better margins.


Not all business will be affected equally. The research indicates that large enterprises with more than $7 billion in revenues have the most to lose; executives estimate that an average of 46% of their revenues is under threat. Why? Due to their hefty profits and inability to change rapidly. Small businesses are very effective at digital disruption as they create strong customer connections with their end customers, and partner well with other companies and suppliers.


There are sensible suggestions based on research for an organisation that is starting to transform. They should strive to understand better what their end customers want and seek to create value through a coordinated network of enterprises and customers.

The engagement of customers will change from a place to "a space" and rethinking is required;

  • Establish how owns the customer internally, which area manages multi experiences? It will not be who manages the product

  • Processes, how can these be automated to be self-service and seamless across channels

  • Accessibility to customer data organisation-wide, data improves decision making.


Customer mobile engagement is essential; organisations that focused on this and achieved their goals had net margins and revenue growth of 5.5% and 6.1%.


If the points extracted are not sufficiently compelling or there is uncertainty on what to do? Consider what makes your enterprise distinctive, and how will you become your customers first choice in that distinctive space? What are your "crown jewels" within your business? How can these be made into digitised services? What would be the consequences of your enterprise not doing this?


There are some great insights sprinkled across the book -

What success have organisations had? "Some enterprises have moved significantly up the vertical axis by rethinking their customers and remaking their organisation to reflect the changed relationship."

  • How do we win in a plug and play product market? To survive, they must be one of the best producers of their core activity. How to thrive? Innovate ensuring they offer the best option at the right price.

  • Every enterprise is to consider becoming an ecosystem driver for at least some of their best customers. Enterprises who are ecosystem drivers will likely consolidate industries.

  • Those enterprises that were in the top third of a digital customer experience had 8.5% high net profit margins and 7.8% higher revenue growth than their competitors.

  • Industry analysis of content, customer experience and platform found that in the financial services industry the top third of economic performers had 29% - 35% - 26% better content – customer experience – platform scores. The IT and Services industry had the highest industry scores and energy, mining and health care scored poorly.

Board members believe digital disruption as a significant threat, estimating that 32% of revenues could be impacted in the next five years. However, only 39% of board members recalled specifically discussing digitisation and the consequences for their enterprise business model.


The future outlook considers things such as; the Internet of Things (IoT) with an estimated business market of $11.1 trillion by 2025 and with companies investing $6 trillion globally. Those enterprises that succeed in this area have a higher probability of moving their business model towards ecosystems. Some manufacturers have made significant commitments to IoT and generate between 60% to 90% of their revenues from new products and services introduced in the last three years.


A closing thought for every organisation how "ambidextrous" are you? Are you innovating and cutting costs, often using money saved to fund the innovation? The book contains an abundance of great advice with enterprise case studies that can help you start now.


Finally, if you ever have the opportunity to see Peter present his research, it's well worth attending.