With a new decade of accelerated innovation at our doorstep, Constellation Research reveals that today’s digital leaders haven’t just created a digital divide—they’ve set the stage for a winner-take-all market. Overall, digital leaders are now taking up to 69.8% of market share. And in percentage of profits, they lead with 77.1%.
"Using data-driven business models, digital leaders are able to create an unfair advantage, and it’s happening in every single market and every single industry," says Constellation founder and Disrupting Digital Business author Ray Wang.
In his new eBook, The Future of Data in Digital Transformation, the analyst and author says if your organization hasn't made the shift, time’s running out. "Organizations have to figure out what is their data strategy, how they're going to build data-driven business models—and more importantly, how much they're going to invest in the talent that's required to help them make better decisions."
"If you're not making the shift—if you’re not even moving in that direction—you're probably going to be merged, be acquired, or go bankrupt," warns Wang.
"Data is the foundation of digital businesses. It determines how business models are created. It determines how business models are evaluated. It determines how business models are optimized, and how they should be adjusted going forward." - Ray Wang
Wang notes that right now, about 5 to 10% of companies are leading this data-driven change—their executives back the change and the company has taken a long view regarding strategy. In terms of what success is possible by making this change, Wang uses Domino’s Pizza as an exceptional example. "Over the last 10 years, they've outperformed most of the major stocks, including tech stocks, and they've done that not just because they've transformed their business model and the channels of how they work, but they moved to a data-driven business."
Domino's Pizza stock increased from approximately $3 per share in 2008 to almost $300 in 2018.
In Constellation's latest digital transformation study, only 36% of respondents said the most important goal of their digital transformation strategy was to implement new, data-driven business models, but Wang says it's okay to start with incremental improvements ahead of transformational change.
"A lot of organizations are trying to figure out, can I do digital transformation and improve operational efficiency at the same time? And the answer is yes, and no. You're working to find operational improvements using data, which is great. That gives you the efficiency bump. But to really do transformation, it's about figuring out what new business models you can create.
"I think this is really a definitional issue where a lot of people look at digital transformation and just assume it's a business transformation on its own. But it's really not—it's about building data-driven business models."
Want to read more of Ray Wang’s POV on data-driven business models, the imperative for organizations to get their data house in order, and what investments to focus on for the future? Get MicroStrategy’s Q&A eBook featuring key insights and advice from analyst, author, and Global 2000 adviser Ray Wang. Download The Future of Data in Digital Transformation today.