A new Harvard Business Review Analytic Services report, An Inflection Point for the Data-driven Enterprise, reveals that only 28% of over 700 organizations said creating new, data-driven business models was a goal of their evolution as a data-driven enterprise.
Introducing new business models fell far down the list of goals, which was topped by delivering better customer insights (77%), faster decision-making (70%), process and cost efficiency improvements (65%), and streamlined operations (61%). But with accelerating digital disruption and digital business models now creating a winner-take-all market, Stephanie L. Woerner, research scientist at the MIT Sloan Center for Information Systems Research (CISR) and coauthor of What’s Your Business Model? Six Questions to Help You Build the Next-Generation Enterprise, says the low prioritization of business model transformation as an evolutionary goal is “a fundamental problem.”
The Impetus for Change
Warns Woerner in the report, “If you’re not thinking about the need for new business models or even a new business unit with a new business model, there’s no impetus for change.
“The very best companies are always thinking about how they are going to change their business model. They’re always thinking about the new ways of gaining revenues. They’re always thinking about the new kinds of services or the same service or products delivered in new ways.
“If companies think seriously about the business models they want to get to, it gives them some impetus to look carefully at what their data should look like, what their processes should look like, and what they’re platform should look like.”
Granted, Woerner says, “it’s a challenge to work on customer experience at the same time as you’re working on the automation and process rationalization required for digital transformation.
“Often, brands put off what needs to be done with data because they’ve got a greater customer need.The problem is that they’re putting off some needed structural underpinnings, and if they’re not careful, it could all come crashing down.”
Making Transformation a Focus Now
In the same HBR Analytic Services report, Constellation CEO, Principal Analyst, and Disrupting Digital Business author Ray Wang notes that time is of the essence for organizations to get their data house in order to drive transformative change.
“The situation in almost every market is that executives realize they need to transform. They want to start using artificial intelligence, for example. But they don’t realize that these changes happen along a continuum. It’s an intensive, multi-year process.
Every board member and CEO needs to understand that data assets have to be managed the same way they manage any other asset. If they don’t, they will be disrupted. —Ray Wang, Constellation Research
“This is a top-down strategic business model decision that boards have to address,” says Wang. “Boards aren’t doing their jobs because they don’t understand the problem: they’re in a data war, and data is a weapon.”
Ready to hear more about creating new data-driven business models and how AI-driven analytics will transform the future of business? Join Ray Wang for the fast-paced, information-packed webcast, Digital Transformation and Zero-Click Intelligence. Register today to watch live or on-demand.