Venturing into digital business models – what are the success factors?

Experts have long agreed that the future belongs to digital business models. There are now also a large number of commercially successful digital business models, most of which also offer their providers and their customers additional benefits, including in terms of sustainability.

Nevertheless, in everyday life – especially in B2B business relationships – we do not experience euphoria, but rather reluctance with regard to the digital transformation of business models. In our opinion, this reluctance is mainly due to the fact that the people “involved” tend to view the digitalisation of business models with scepticism, e.g:

Managers who fear that digital business models will cannibalise sales/ margins from analogue models. Or do not provide the necessary resources/ investments because they do not believe in the sustainable success of digital business models.

Employees who fear that digital business models will increase additional work/complexity (e.g. due to the parallel operation of analogue and digital business models) and that there will be no other advantages or rather disadvantages for them.

Customers who value the familiar analogue business models because they work well and tend to be critical of the added value of digital business models.

Nevertheless, how can the digitalisation of business models be started and successfully implemented despite the often not entirely unjustified scepticism of the people involved?

What measures do we recommend?

In our view, the best way to deal with the scepticism of the “acting” people is to actively involve them in the development and implementation of digital business models and to communicate transparently about successes and failures. The following ten points are important here:

1. Digital business models should always be introduced in addition to current business models
2. Ideas for digital business models are developed in interdisciplinary teams where possible (including selected customers/users, employees, management)
3. When developing ideas, the focus should be on developing new business models rather than replacing current business models 1:1
4. The ideas developed are described and evaluated from the perspective of all “acting” groups of people. The aim is not to develop a detailed business case, but to identify the achievable added value (monetary and non-monetary)
5. The ideas with the most positive evaluations from the perspective of as many/all “acting” groups of people as possible are prioritised for piloting
6. The decision to implement selected pilots is linked to the provision of the necessary internal and external resources to put them into practice
7. The implementation of the respective pilots starts with the most important components of the digital business model
8. As soon as a first “usable version” of the digital business model is available, it is tested with selected customers/users
9. Critical feedback from test customers/users will serve to successively optimise the business model. A constructive error culture in the company is a key success factor here. Positive feedback is a reason to celebrate together and may be a good time to offer the model to other customers for testing
10. As soon as the key components of the digital business model have been stably implemented and successfully tested by an extended number of customers, further components can be added to the business model

It is therefore not about working through a detailed project plan quickly and fulfilling detailed business cases, but about learning step by step how digital business models affect everyone involved. This allows undesirable developments to be corrected quickly and the benefits to be presented transparently. This reduces scepticism among “acting” people and makes them want to expand digital business models.

Conclusion

The earlier a company sets out with its employees and customers to identify and test digital business models, the earlier the learning process starts on how these can be successfully implemented in the long term. In this way, the risk of a digital business model can result in a real competitive advantage over market competitors.