Businesses in the digital age are facing unprecedented challenges that threaten their very existence. The relentless force of disruptive technologies, such as cloud, mobile and big data has dramatically lowered barriers to entry for new entrants and start-ups. These rapid developments in digital technologies in particular the Internet of Things, have flooded the marketplace with revolutionary new products and services. This phenomenon, known as digital disruption, has unleashed a wave of innovation that threatens to engulf executives who are unable to adapt quickly enough to the new status quo.
In this chaotic, hyperconnected world, where only the most nimble-footed businesses survive, forward-thinking executives know that innovation, reinvented business models, new products, services and customer engagement models, will be the key to getting ahead of new entrants.
Business model reinvention can take many forms; Apple’s transformative business model went beyond pure product innovation to creating a business model around the concept of a design experience both with their products and in-store experiences. Google invented the concept of a ‘free’ service for consumers with revenue flowing from data collection, monetisation and advertising. Amazon wasn’t the first online store, but by building a new retail platform they reinvented the traditional retail business model and the way consumers shop. Digiotology believes every organisation has the potential not only to replicate these success stories but to create their own.
Some of these organisations are already exploring different ways to fast-track innovation and unlock incredible value by running hackathons. These promise breakthrough innovation at start-up speed by bringing together people from all across the business with developers, designers and data scientists to solve challenges and generate new solutions to existing problems.
But developing great ideas is only the first phase of the journey and many businesses will go on to discover that they don’t have the right capabilities, strategy or the much publicised start-up culture that will enable them to go on to achieve full digital transformation from their innovation efforts.
And while for many executives the need to innovate is well understood, the biggest challenge is: where do I start? Traditional innovation models just don’t cut it in the new digital ecosystem where speed, agility and scalability are seen as the key to value creation. The boundaries that once separated industries are blurring as platforms reshape traditional industries and the most visionary digital leaders are starting to explore new ways to collaborate and build new partnerships, often outside the organisation, for example with technology companies, universities and start-ups.
Research with Nimbus Ninety members has revealed that most executives agree about the importance of business model reinvention in their battle to become digital organisations. But it is on the challenges preventing them from doing so that opinions differ widely. Data silos, inaccessible legacy systems, poorly aligned operating models, culture, a shortage of skills and a lack of agility are some of the most commonly stated barriers to fast-tracking innovation in their organisations.
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