Digitalization of the Business Model

Information technologies have been one of the major driving forces behind the business landscape evolution since its introduction and its widespread adoption by organizations towards the turn of last century. As business IT infrastructures began to take shape they were viewed by companies both as a great opportunity and as an enormous threat. Some saw it as a chance to achieve a high degree of process automation thus allowing the organization to make significant gains in speed, scale, and cost optimization, while other companies felt threatened and appalled by the thought of adopting a new and unexplored technology in their operations. As history teaches us, the second category of organizations paid the high price of their stubbornness and conservatism and were either driven out of business or forced to implement the new IT systems with a significant late-mover penalty.


The lessons learned from the past are more relevant today than ever. The current environment businesses operate in is characterized by dynamism, turbulence, demanding customers, and cutthroat competition. In order to tackle those challenges and remain competitive organizations must depart from their traditional organizational view focused on cost cutting and efficiency and move to a more customer-centric approach that requires them to develop new organizational capabilities. For assistance in this vital transition, companies should employ the power of modern IT technologies. IT has made a giant leap forward in functionality and has spread its influence to both businesses and consumers alike. Cloud computing, big data, social media usage, and mobile platforms are an inseparable part of the modern business landscape and companies should embrace them rather sooner than later in order to avoid the fate of their predecessors. Organizations are currently at the doorstep of the next IT revolution – digitalization.


Digitalization, however, is more than just an IT upgrade. It affects all organizational levels and business units. It entails a change in the ways reporting is done and performance is measured. If traditional IT systems focused on process optimization in order to remove redundancies, reduce costs, improve speed, and achieve scale economy effects, the digitalization era requires a rethinking and redesign of the whole business model of the organization in order to cater as effectively as possible to the needs and wants of the company’s customers. This customer-centered way of thinking and doing business is the key to success in the modern world where consumers, thanks to the rise of Internet technologies, have nearly unlimited access to information, which makes them highly demanding and less concerned about switching providers. For this reason, organizations must have as exhaustive and thorough knowledge of its consumers as possible and employ tools that allow them to measure effectively customer satisfaction and mood. The digitalization of the enterprise model can not only provide the platform to develop those objectives but can also offer guidelines on how to achieve them.


Another modern day issue that digitalization can help in addressing comes from the turbulence of the current commercial environment. The business landscape is undergoing changes faster and more frequently than ever and many organizations struggle to keep up. In order to overcome this challenge, businesses must possess a business model capable of supporting a dynamic strategy. This is where the power of digitalization can be unleashed. Modern IT systems offer the benefits of quick adjustments in the structure, big data collection, and fast information dissemination. This in turn promotes flexibility and the capability to anticipate market shifts, consumer trend changes, and competitor actions thus allowing the digitalized organization to be proactive in its operations.


There is no doubt that the business landscape is currently undergoing a revolution. Organizations nowadays need to fulfill the harsh requirements of being dynamic, flexible, well-informed, and customer-centric. In order to achieve those characteristics, businesses must leave the traditional organizational view fixated on internal process optimization and shift their focus towards the outside of the organization – its customers, competitors, and environment. This requires companies to develop new capabilities and redesign their business models. Digitalization offers the roadmap and infrastructure to do just that.

Use Your Digital Potential

Find out what opportunities and risks digitalization holds for your company and how to boost your provided customer value.