The COVID-19 pandemic has accelerated digitalisation for businesses worldwide. However, as the world is transitioning back to the office, companies face the same uncertainties regarding digitalisation as before the pandemic. The crucial question at the heart of this uncertainty is how digitalisation can create a sustainable and meaningful impact on businesses rather than merely following the next tech hype. Digitalisation leaders are trying to determine how new tech trends can benefit their businesses, from AI and blockchain to quantum computing. Although these trends are hyped initially, they often fail to produce measurable results, leading to abandoned projects.
To avoid this situation, companies must focus on changes in products and processes more than changes in technology. Unfortunately, many businesses need help to look beyond the shiny promises of new technologies, dedicating too many resources and too much attention to technology in digital transformation projects. To counter this imbalance, one approach is to consider digitalisation as business model innovation rather than technology-related change.
The business model canvas, developed by Alexander Osterwalder and Yves Pigneur, is an intuitive tool that consists of nine key elements with the value proposition at heart. The canvas helps businesses sketch out and transform their business models, capturing customer segments, channels, and relationships, while also considering key activities, resources, partners, and cost structures and anticipating revenue streams.
Two aspects of the canvas make it particularly suited to digital transformation conversations. First, it serves as a checklist, ensuring that all of the nine essential elements are noticed while also pulling them together to understand the crucial interplay between them. Changes in one element usually affect the entire canvas, emphasising the importance of investing in the right technologies and complementary changes in organisations that ensure technologies are used efficiently and effectively. Second, the business model canvas is rooted in the idea that a perfect business plan only sometimes emerges in its final form overnight. It is an iterative refinement process driven by intense customer testing, gradually refining or pivoting the whole idea.
To use the business model canvas for digital transformation, organisations must start by mapping out their current business model, identifying the strengths and weaknesses, and identifying the areas that need improvement. Next, they need to identify the digitalisation initiatives that can improve their business model, considering factors such as the impact on their value proposition, customers, channels, relationships, key activities, resources, partners, cost structures, and revenue streams. Finally, they must test the digitalisation initiatives with key stakeholders to refine or pivot the business model, aligning technological and organisational changes iteratively.
In conclusion, the pandemic has accelerated digitalisation for businesses worldwide. Still, organisations must consider business model innovation rather than technology-related change to create a sustainable and meaningful impact on their businesses. The business model canvas is a useful tool for digital transformation, enabling organisations to identify areas for improvement and digitalisation initiatives that can improve their business model. By iterating and refining the business model through intense customer testing, businesses can align both technological and organisational changes iteratively to create a genuinely transformative enterprise.