Transforming Your Products & Business

 

 

Digital Transformation

Transforming Your Products & Business

 

 

We have taken the first step in our Digital Transformation journey by quickly mapping technology to our core business needs. Our goal, in the early phases of Digital Transformation, is to deploy a hybrid cloud infrastructure to provide the flexibility, scalability and secure operating environment required by our business.

As outlined in my previous post (The Path to Digital Optimization), we use the pillars of Microsoft’s Digital Transformation Strategy to focus our investments and build out our infrastructure to Optimize Operations, Empower Employees and Engage Customers. Our efforts in this first phase of Digital Transformation are intended to Digitally Optimize our organization. We have over-simplified our Digital Optimization process by selecting a primary vendor (Microsoft) and then leveraging Microsoft’s Cloud Solutions and the solutions developed and supported by leading Microsoft Partners. Our initial Digital Optimization projects are focused on quickly enabling a flexible & scalable hybrid cloud infrastructure that will capture the low-hanging benefits available as we reduce costs, improve team productivity and enhance our customer engagements.

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Transforming our Products / Business

With our investments in a Hybrid Cloud infrastructure, relevant training for our staff and improvements in our processes now complete, we are prepared to embark on the Digital Transformation of our Products and Business.

To Digitally Transform our Products / Business we will hold on our selection of technology and instead, focus our efforts on selecting an appropriate Business Model to drive our Digital Transformation.

With Business Model as our primary focus, we naturally start with   the basic question: “How many Business Models should I consider as I attempt to Digitally Transform my business?”.

Thanks to the team at St. Gallen University in Switzerland, the answer to this question is easily at hand. After a quick read of the book, ‘Business Model Navigator’ (FT Publishing), I am quite sure that you will agree we’ve found an amazing resource for navigating the waters of business model selection. And, to give credit where credit is due, I must thank Microsoft’s team in Germany for introducing me to this valuable research and associated transformation methodology.

The Business Model Innovation guidance provided by St. Galen encapsulates decades of research and presents this research via an inventory of 55 business models. A deck of cards! And while there is likely a new business model lurking in the corners of the known business world, our ability to leverage the research done by the St. Gallen team and the existing inventory of 55 models is none the less amazing.

To leverage this research and methodology, we engage our Digital Transformation Leadership Team and start down the path:

  • Using the Business Model Canvas to document the primary capabilities and values of your current product / business,
  • Comparing and contrasting the inventory of St. Gallen business models to define the pillars of our new venture,
  • Integrating the business model(s) that best apply, and
  • Testing our new business to ensure delivery of unique customer value and optimal business performance.

The team at St. Gallen provides us with a simple, graphical process flow to support our use of the Business Model Inventory. The process is mostly self-explanatory; however, if you want additional detail then please take the time to read ‘Business Model Navigator’.

The book provides a number of stories to communicate both the process and value of business model transformation; and you may leverage these examples in combination with other transformative stories from ‘Leading Digital’, ‘The Digital Transformation Playbook’ and ‘Digital to the Core’ to inspire your team and give them a creative boost.

Truly break-through business model design seems to follow the same premise as the movie ‘Field of Dreams’ (i.e. “If you build it, he will come”). However, it doesn’t need to be that far-fetched. The St. Gallen team gives us a sound foundation, with each business model directly linked to 2 or 3 existing companies who serve as living proof of the model and it’s value. As a result, the process of building our own break-through business model, simply requires the use and integration of 1 or more of these proven models.

With a little exercise in imagination, your team will be doing some amazing business model redesign in a relatively short period of time. To get you started, let’s walk through a couple examples to show how a set of integrated business models can deliver significant customer and business value.

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Sensoria is one of my favorite digital transformation examples because of their intelligent integration of business models and their innovative products and platform. Sensoria, when viewed from a business model perspective, represents (Integrator + Digitization + Leverage Customer Data + License).

A quick tour of the Sensoria Fitness webpage gives you a direct view into their Integration & Digitization capability. With sensors knit directly into your socks, your shirt, etc.; the Sensoria team goes beyond tracking basic fitness data. Sensoria socks, as an example, measure your speed, heart rate, stride and foot impact multiple times per second. This data is then fed directly to your Bluetooth connected device and up to the cloud, providing the user with either real-time feedback or a work-out summary.

Now, this data is quite interesting to the individual athlete; and is invaluable when viewed by a Doctor (Sensoria as a Digital Monitor for Diabetic or Cardiology patients), when viewed by a Football Coach (Sensoria as an Individual Coach/Trainer) or by a Shoe Company (Sensoria as a Product Manager for an athletic shoe). Each of these Health / Athletic / Product Managers can leverage Sensoria’s platform to analyze the performance of individual users or cohorts of users with an unprecedented level of granularity and insight.

With their integrated business model and their precise selection of technology, you can see how Sensoria has clearly differentiated their business from the sea of digital athletic devices. A business model and technology platform that plays at an entirely different level.

 

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Another favorite Digital Transformation story comes from Navco. I love this story because when you talk about Digital Transformation and the Cloud, the topic of Security always comes to the forefront. So, who better to address the question of security than a company that specializes in Integrated Security Systems! So, we share the story of Navco.

Navco is by no means a new-comer to the security systems market. They’ve been around for over 40 years and have an established customer base that numbers in the thousands and includes banks, hospitals and many other security sensitive organizations.   And, of course, as the primary provider of security systems for these customers, Navco is at the center of a highly secure and trusted customer relationship.

Navco’s Digital Transformation was designed atop their traditional business model of Integrator + Solution Provider. With improved mobile access to customer data for their Navco service technicians, immediate customer access to service call & account information and a secure/transparent view of contract performance via shared security analytics; Navco now has the option of extending their business model to include Guaranteed Availability + Performance-Based Contracting.

To support these enhancements in both customer experience and business model; Navco adopted Microsoft Dynamics CRM as their native platform for customer service; integrating security system status, service calls, financial statements and other supporting data to enable security systems performance. The results speak for themselves with >95% fix rate on first service calls for every Navco customer! It’s quite stunning the value that Navco delivers by combining a great business model with effective use of technology to drive a truly differentiated customer experience.

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These two examples provide us the opportunity to assess Digital Transformation from both a Business Model and supporting technology perspective. You can find additional examples on St. Gallen’s Business Model Innovation Blog Page as well as Microsoft’s Digital Transformation webpage. These Case Studies give us the insight and confidence required to embark on our own journey of Business Model Innovation and Digital Transformation.

I sincerely hope that you share my enthusiasm for the BMI methodology, the Digital Transformation success stories and the bottom-line results that are possible.

Now, it’s your turn. Time to transform!

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