Introduction E-Business & Digital Transformation

e-Business & Internet Applicationssummer term 2017

Frank Wiedemann, MBA

Introduction e-Business & Digital TransformationFrank Wiedemann, eMBALecture: e-Business & Internet Applications, summer term 2017

HNU University of Applied SciencesNeu-Ulm, 24/03/2017

› Personal Introduction Frank Wiedemann› Since 2016 Chief Sales & Marketing Officer at mission-one GmbH

› 2013 – 2016 CEO NPG Digital

› 2011 – 2013 Head Online Business Development, Swisscom Schweiz AG

› 2007 – 2011 Digitals Strategy Consultant, various Online Agencies

› eMBA – Study Strategic Information Management, HNU

› Diploma – Study Business Administration, HNU

› Banker

https://www.xing.com/profile/Frank_Wiedemann6?sc_o=mxb_p

https://www.linkedin.com/in/frank-wiedemann-88168721/

e-Business Definition

„E-Business (electronic business) is, in ist simplest form, the conduct of business on

the Internet. It is a more generic term than eCommerce because it refers to not only

buying and selling but also serving customers, empowering internal processes an

collaborating with business partner. It therefore also impacts management,

marketing and sales operations, and legal aspects of operating a firms business“

In 1997, IBM was one of the first companys who used the term when they launcheda campaign built arroud the term e-business.

e-Business Definition

› Content delineation e-business vs. e-commerce

E-Business

E-Commerce

E-Business

Business Intelligence

Customer RelationshipManagement

Supply Chain Management

EnterpriceResource

Management

E-Commerce

Online Activitiesbetween

Businesses

Collaboration

Electronic transfer

within firm

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Digital Evolution

source: Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion, CISCO 2013

Internet of Things (IoT) –Internet of Everything

number of connected devices worldwide from 2012 to 2020 (in billions)

source: https://www.statista.com/statistics/471264/iot-number-of-connected-devices-worldwide/

Global Population

The Internet of Things has the Power toRevolutionize Everything … smart Home

Source: https://www.11880-elektriker.com/ratgeber/hausautomation/smart-home-systeme

The Internet of Things has the Power toRevolutionize Everything

Source: https://www.produktion.de/video/smart-factory-audi-schafft-das-fliessband-ab-290.html

… smart Factory

… smart City

Source: https://www.linkedin.com/pulse/smart-city-blueprint-confluence-dynamic-master-plan-chakrabarti

General development - it just starts!

“We are currently at the beginning of a transformation phase. The DNA of our customers is changing fundamentally.”

source: PwC: Oktober 2013, Analysis Swiss population

...the key to digital transformation is re-envisioning

and driving change in how the company operates.

That‘s a management and people challange, not just

a technology one.

Capgemini Consulting, Digital Transformation Report

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Digital Business Models

source: Elgar Fleisch Professor of Information and Technology Management ETH Zurich / University of St. Gallen

Platform Model(Network effects)

Transaction Platforms

Innovation Model

(digital technology)

Scale Model(digital greatadvantage)

IoT Data Model(connection digital an physical world)

Digital chargedPhysical Products

Sensor Data as a Service

Remote Monitoring

Digital Add-on

PhysicalFreemium

Object SelfService

Innovation Platforms

Free Freemium

Subscription

On-Demand

Sharing

Marketplace

Premium

Ecosystem

1

2

3

4

Internet of Things Value Chain

source: Telecomcircle, https://www.linkedin.com/pulse/internet-things-business-models-mohit-agrawal

Platform Disruption – How it Works

› Platforms bring together producers and consumers on a large scale as intermediaries. Consumer reduce their transaction costs (e.g. search, negotiation, transaction), the producers can easily find customers, but they have to surrender part of their profit margin to the platform operator.

› Platforms are today the dominant business model of the digital world

The Top Online Platformsdidn´t DisruptTraditional Businesses

source: https://hbr.org/2016/09/the-businesses-that-platforms-are-actually-disrupting / David S. Evans and Richard Schmalensee, based on data from PwC, Alexa, CB insights

In most cases, victim was another matchmaker ofconsumers and services orproducts

Overview basic e-Business Models

The Brokerage Model (B2B, B2C)

The Utility Model (B2C)

The Advertising Model (B2C)

The InfomediaryModel(B2B)

The Merchant Model (B2C)

The ManufacturerModel (B2B)

The Community Model (B2C, B2B)

The SubscriptionModel (B2C)

The Affiliate Model (B2C)

source: http://digitalenterprise.org/models/models.html





Infomediary(B2B)


The ManufactorModel (B2B)




source:http://digitalenterprise.org/models/models.html





Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)











Infomediary(B2B)







The web attacks traditional ways of doing

things and elites, and this is very

uncomfortable for traditional businesses

to deal with.

Sir Martin Sorrell, CEO, WPP Group

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Disruption Definition

Disruptive innovation describes a process by which a

product or service takes root initially in simple applications

at the bottom of a market and then relentlessly moves up

market, eventually displacing established competitors.

Prof. Clayton Christensen, Harvard Business School

source: http://www.claytonchristensen.com/

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Disruption Examples

› Any Ideas?

› Car Horse carriage

› Electric locomotive Steam locomotive

› Computer Typewriter

› Mobile Phone Smart Phone

› renewable energy Nuclear energy

› iTunes Compact Disc

The Innovator's Dilemma

source: Replication from „The Innovator´s Dilemma“ by Clayton Christensen

Sustaining Technology

Disruptive Technology

High End Customer

Low End Customer

Time

Perf

orm

ance

None of these six Companies existedTwenty Years ago

› The world´s largest taxi company owns no vehicles

› The largest accommodation provider owns no real estate

› The most popular media provider creates no content

› The most valuable photo company sells no cameras

› The fastest growing television network lays no cables

› The most valuable retailer has no inventory

Uber now has a $66

billion valuation

Alibaba logged a record $14.3

billion in sales on Singles' Day

Most Valuable Companies in the Fortune 500

COMPANY INDUSTRYMARKET Value

$Bil

1 Apple Computers, Office Equipment 534

2 Alphabet Internet Services and Retailing 507

3 Microsoft Computer Software 413

4 Exxon Mobil Petroleum Refining 326

5 Facebook Internet Services and Retailing 321

6 Berkshire Hathaway Insurance: Property and Casualty (Stock) 312

7 Johnson & Johnson Pharmaceuticals 288

8 General Electric Diversified Financials 271

9 Amazon.com Internet Services and Retailing 250

10 Wells Fargo Commercial Banks 242

source: S&P Capital IQ 2016/2

Disruption hurts

17.5 Billion SMS daily

3.5 Billion Users

70/% profitmargin per SMS

32 SMS per user per day

7 Billion SMS per year in switzerland

source: swisscom PPT

Disruption hurts

Disrupt yourself before someoneelse does.

Otherwise it could hurt you!

We have moved from a world

where the big eat the small

to a world where the fast eat the slow

Klaus Schwab, President of the Davos Economic Forum

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Conversations on Digital Tranformationat Microsoft's Envision 2016

source: Microsoft , blogs.microsoft.com

Digital Maturity MatrixD

igit

al in

ten

sity

Transformation management intensity

Fashionistas> Many advanced digital features (such as social,

mobile) in silos

> No overarching vision

> Underdeveloped coordination

> Digital culture may exist in silos

Beginners> Management skeptical of the business value of

advanced digital technologies

> May carry out some experimentation

> Immature digital culture

Digirati> Strong overarching digital vision

> Good governance

> Many digital initiatives generating business value in measurable ways

> Strong Digital culture

Conservatives> Overarching digital vision exists, but may be

underdeveloped

> Few advanced digital features, though traditional digital capabilities many be mature

> Strong digital governance across silos

> Taking active steps to build digital skills and culture

source: MIT Center for Digital Business and Capgemini Consulting

Digital Maturity MatrixD

igit

al in

ten

sity

Transformation management intensity

> Fashionistas

> Beginners

> Digirati

> ConservativesMedia

Finance

Insurance

Travel

Telco

Google

Industry

Pharmacy

source: MIT Center for Digital Business and Capgemini Consulting

Facebook

Newsp.

Opportunities and advantages of digital transformation

> Customer Insights

> Customer Experience

Customer Product Processes

Digital Business Transformation

> New Products Services

> New Tecnology > Cost & time savings

> increase ofproductivity

> Professional web controlling enables the analysis of usage behavior and generation of insights

> Cross-media customer experiences through mobile, social and online platforms

> New digital services and products, e.g. apps offer added value for customers

> New technologies enable advanced services such as apps or digital signage terminals

> Reduced sales, delivery and service costs for fast time to market

> Increase process and employee productivity through the use of digital applications

External Chances Internal Opportunities

source: TWT Consulting

Four ways digital transformation drives business value

source: McKinsey analysis

„Digital canreshape everyaspect of the

modern enterprise“

Digital Service Unit

Digital Business Creation

Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills

Digital Monetization

Roles and Key Functions of a DSU

source: Capgemini Consulting, Digital Transformation Report 2013

> Digital Services Unit as a Tool toAccelerate Digital Transformation

> A Digital Services Unit (DSU) is a centralized entity that delivers a broad catalog of digital services and coordinates efforts across various units



Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills


Roles and key functions of a DSU


> Focuses on ensuring seamless Digital Transformation by aligning marketing, Finance, HR, Operations, Branding functions with all digital channels.



Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills




> Key objective of DSU is to give back to the brands and markets, the data and intelligence on their consumers Facilitates collaboration across various resources in the organization



Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills




> Promotes online innovation and establishes a culture of ideation and collaboration in the company



Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills




> Enhances digital skills and capabilities across the organization Avoids silos of digital capabilities



Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills




> Evaluates new platforms such as e-commerce, social media, viral video etc., to create new revenue generating avenues and drive sales


Digital BusinessCreation

Digital Strategy&

Transformation

Digital Factory

Digital Innovation

Digital Skills




> Develops IT services to support internal and external clients such as marketing, sales, customers etc. Develops online content to facilitate new business opportunities

Alternative Business Transformation Pathways

source: Deloitte analysis /Deloitte University Press

source: McKinsey analysis

Six Steps Help get the Digital Transformation going

Thank You