- Digital technologies can actually change the things
that our customers value
and what they're willing to pay for it.
So we need to be ready to adopt new business models
throughout the supply chain.
Let's look at five business models
that are often enabled by a digital transformation.
The first one is automation
where we take it a test
that's normally done by people
and develop a device or a piece of software
that can do it better.
Automation makes sense
when workers are expensive or hard to find
or hard to train.
Automation can apply to physical tasks
but it can also apply to information tasks.
The next is digital marketplaces.
eBay, Uber and Airbnb are all examples
of digital marketplaces.
There are lots of other marketplaces
that connect customers
and suppliers throughout the supply chain.
Marketplaces generally earn a small fee
for each transaction
or they charge a membership fee
or they charge a fee to advertisers.
The next category is digitalization
where we convert a physical product
into a digital one.
A great example of this
was the transition from CDs to streaming music.
Digitalization eliminates the cost
of manufacturing and distributing physical products
and that makes it easier for any company
to serve customers around the world.
As we look at the potential for the metaverse,
the digital world will need to be supported
by companies with digital supply chains.
The next category is servitization.
That's where we change the business relationship
from one where we're selling a product
to one where we're providing a service.
For customers, this resembles a change
from buying and maintaining assets
to just renting the things that we need.
And for suppliers, servitization can enable a shift
from a costly and unpredictable sales process
to a steady stream of recurring revenue from subscribers.
And the final category is new platforms.
This covers products and services
that are truly brand new
that weren't available or even possible before.
Smartphones are a good example
of a platform that challenged all of us
to rethink our businesses,
and blockchains are a new platform
that may have a big impact in the future.
The new platform could also include bringing a product
or service into a new market
where it wasn't available before.
Some of the changes that digital transformation creates
are small improvements
but others can have a huge impact,
such as creating new industries
or making existing industries obsolete.
So what are some of the ways
that digital transformation could create new business models
that might actually work better for you?