Data-driven and software-driven business models fulfill new experience demand

In our online world every use of technology leaves behind a digital footprint, which can be useful. By definition, information-based business models are fueled by any traceable digital footprint created by a human being, a component, a machine or a service. Additionally, technologies like low-code or no-code environments, which lead to an increased use of software, do reinforce productivity in the provision of services. Related data-processing becomes the fuel of such a hyper-productive machine.

Other recent technology shifts allow a much more efficient exploitation of data, and the employment of AI algorithms fortifies the interpretation of data, providing valuable insights about customer needs or even increasing conversion rates. This means: innovation is very much driven by purpose-oriented human needs for resources, wellness, spaces, mobility, (financial) value, leisure, community activities, etc. Digitally-enabled eco-systems will then concentrate on presenting customer journeys, rather than selling product units, and without benefiting from feedback loops regarding their usage. This is exactly the reason, why the designing, provision and improvement of customer journeys for commercialization in respective market places requires data-driven and software-driven business models. As a consequence for today, companies need to understand how to use their data in the best possible way - to build and entertain a data eco-system and become digitally literate.

Every company is becoming a software company

In such a connected world and to survive in novel ecosystems, where customer journeys are proliferated based on purpose driven human needs, every company is a software company and every organization needs to become agile, free from functional silos, and with humans working with artificial intelligence across the enterprise.

Agility frameworks formerly to be found in software development have been extended beyond IT departments – like an operating system to achieve business agility. However, to apply such a framework to the own operating model does require a tech-enabled transformation for the entire company. We’re seeing unprecedented innovation speed forcing companies to revisit their management and leadership styles. In the digital age command-and-control chains are not working anymore and leaders with a growth mindset are needed.

The ability to deliver is more than ever an interdisciplinary exercise of continuous innovation, experimentation, and knowledge from various domains. It’s important to understand that underlying tech platforms / IT platforms need to be run like a business – a new taxonomy is needed where the transparency about provided business value, IT consumption and service quality are being clearly exchanged between Business and Tech departments. In our work, we encounter organizations, which want to start a tech-enabled or digital transformation without having completed important prerequisites, like modernization of their tech platform and digitizing their processes. Companies are not really prepared for the digital age. And there are a couple of reasons for this:

Technology employment is still managed and budgeted as a cost center with all implications coming along during yearly budget rounds. Additionally, the convergence of information and operational technology platforms does indeed enable innovative digital business models, but hasn’t been implemented in many companies, yet. Trapped in past success and with a strong desire to keep the legacy, companies concentrate on digitizing single use cases, rather than designing a business model, which is digital at the core.

This is exactly our starting point for creating sustainable blueprints based on an understanding that technology determines business. Our work does not just comprise the technical aspects of conducting operating model changes but also in providing educational insights at top-management level that decisions are taken, based on a profound understanding how professional technology employment does assure future business performance of a company. The educational part is really important: a remarkable conclusion of a MIT Sloan Management Review survey shows, that only 9% of executives say their leaders have the right digital skills.