Summary Digital Business & Transformation
Summary of Book (Rogers) and Lectures
Including all the chapters for DBT
Contents
Chapter 1: The five domains of digital transformation ............................................................ 2
Chapter 2: Harness Customer Networks................................................................................ 7
Chapter 3: Build Platforms, not just products ....................................................................... 15
Chapter 4: Turning Data into assets .................................................................................... 23
Chapter 5: Innovate by rapid experimentation ..................................................................... 31
Chapter 6: Adapt your value proposition .............................................................................. 40
Chapter 7: Mastering disruptive business models ................................................................ 46
,Chapter 1: The five domains of digital transformation
Digital transformation
= A change in how a firm employs digital technologies, to develop a new digital
business model that helps to create and appropriate more value for the firm (Verhoef
et al., 2019, p. 1)
The phases of digital transformation:
The five domains of strategy are:
1. Customers
2. Competition
3. Data
4. Innovation
5. Value
The five domains of strategy are changing:
The impact of the digital transformation is enormous, as barriers disappear
under which virtually every business domain operates.
1. Customers
From To (digital)
Customers as mass market Customers as dynamic network
Communications are broadcast Communications are two-way
to customers
Firm is key influencer Customers are the key influencer
Marketing to persuade Marketing to inspire purchase,
loyalty, advocacy
One-way value Reciprocal value flows
Economies of scale Economies of customer value
- This is forcing businesses to rethink their traditional marketing
funnel and reexamine their customers’ path to purchase.
- Rather than seeing customers only as targets for selling, businesses
, need to recognize that a dynamic, networked customer may just be
the best innovation partner they will ever find.
2. Competition
From To (digital)
Clear distinctions between Blurred distinctions between
partners and rivals partners and rivals
Competition is a zero-sum game Competitors cooperate in key
areas
Key assets are held inside the Key assets reside in outside
firm networks
A few dominant competitors per Winner-takes-all due to network
category effects
- Zero-sum game = a situation in which an advantage for one party must
necessarily result in an equally large disadvantage for one or more other
parties
- Today, we are moving to a world of fluid industry boundaries, one where our
biggest challengers may be asymmetric competitors— companies from
outside our industry that look nothing like us but that offer competing value to
our customers
3. Data
From To (digital)
Data is expensive to generate in Data is continuously generated
firm everywhere
Challenge of data is storing and Challenge of data is turning it
managing it into valuable information
Data is a tool for optimizing Data is a key intangible asset for
processes value creation
- The current “big data” tools allow firms to make new kinds of predictions,
uncover unexpected patterns in business activity, and unlock new sources of
value. Data is a vital part of how every business operates, differentiates itself
in the market, and generates new value.
4. Innovation
From To (digital)
Decisions made based on Decisions made based on
intuition and seniority testing and validating
Testing ideas is expensive, slow, Testing ideas is cheap, fast, and
and difficult easy
Failure is avoided at all cost Failures are learned from, early
and cheaply
Focus is on the ‘’finished’’ Focus is on minimum viable
product prototypes and iteration after
launch
- Digital technologies make it easier and faster to test ideas, to can gain market
feedback from the very beginning of our innovation process, all the way
through to launch, and even afterwards.
5. Value
To (digital)
, From
Value proposition defined by Value proposition defined by
industry changing customer needs
Optimize your business model Evolve before you must, to stay
as long as possible ahead of the curve
Judge change by how it impacts Failures are learned from, early
your current business and cheaply
Market success allows for ‘’only the paranoid survive’’
complacency
- The only secure response to a changing business environment is a path of
continuous evolution, where each technology is viewed to expand and improve
our value proposition to our customers.
- Rather than waiting to adapt when change becomes a matter of life or death,
businesses need to focus on seizing emerging opportunities
A playbook for digital transformation
To master competition in the digital age, businesses must learn to cope with
asymmetric challengers who are reshuffling the roles of competition and cooperation
in every industry. They must also understand the increasing importance of strategies
to build platforms, not just products.
Digital Transformation playbook = the five strategic themes for businesses related
to the five domains by uncovering how the limitations of your traditional strategy are
changing and how opportunities are emerging to build your business in new ways.
Domains Strategic Key concepts
themes
Customers Harness - Reinvented marketing funnel
customer - Path to purchase
networks
- Core behaviors of customers networks
Competition Build platforms, - Platform business models
not just - (In)direct network effects
products - (Dis)intermediation
- Competitive value trains
Data Turn data into - Templates of data value
assets - Drivers of big data
- Data-driven decision-making
Innovation Innovate by - Divergent experimentation
rapid - Convergent experimentation
experimentation - Minimum variable prototype
- Paths to scaling up
Value Adapt your - Concepts of market value
value - Paths out of a declining market
proposition
- Steps to value proposition evolution
