digital business engineering
TRANSCRIPT
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DIGITAL BUSINESS ENGINEERING
Prof. Dr. Boris Otto
Dortmund, January 2015
Source: Financial Times, 2014.
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CONTENT
Digitization
Digital Business Engineering Approach
Business Benefits
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Digitization is a term describing an array of various influential developments
Society Business Technology
Individualization
»Shareconomy«
Data privacy
Consumer-centricity
Hybrid services
»Industrie 4.0«
Cyber-physical systems
In-memory-computing, Hadoop etc.
Mobile and ubiquitous computing
Digitization
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These developments ask for the impact of digitization on existing business models
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In this endeavor, companies across all industries are confronted with a set of open issues
How does digitization affect our business model?
Which digital services offer most value to our customers?
What data is required? Where does the data come from?
Whom do we need to partner with in order provide these services?
What capabilities does our organization need to provide these services?
What technology must be in place?
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CONTENT
Digitization
Digital Business Engineering Approach
Business Benefits
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Companies have to overcome various challenges when developing a digital business model
52 %Inappropriate organizational
structure
51 %Missing IT infrastructure and
systems
46 %Poor data quality
45 %Lack of leadership
43 %Lack of functional expertise
31 %Lack of IT expertise
Source: McKinsey: Minding your digital business. In: MicKinsey on Business Technology (2012) Nr. 27, S. 24-31.
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Digital Business Engineering is a methodology for sustainable digital business transformation
Digitization
Digital Business Model
StrategicPerspective
ProcessPerspective
SystemsPerspective
E2E Customer Process Design
Ecosystem Design
Digital Product & Service Design
Digital Capabilities Design Data Mapping
Digital Technology Architecture
1
2
3
4 5
6
Legend: E2E - End-to-End.
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Digital Business Engineering (DBE) is a model-oriented and method-driven approach
DBE Phase
Description Goal Involved Roles Techniques
1 CustomerProcess
Understand end-to-end customer process from outside-in
Digital business development Sales and marketing
a. Customer journeysb. Multi-channel
analysisc. Consumer process
modeling
2 Ecosystem Understand actors within customer process and customer interaction points
Digital business development Sales and marketing Product management
a. SWOT analysisb. Network analysis
3 Digital Products and Services
Design digital products and services based on end-to-end understanding of customer process
Digital business development Sales and marketing Product management Business architect
a. Business model canvas
b. Digital artifact design
c. Design thinking
4 DigitalCapabilities
Identify capabilities needed to provide digital products and services
Digital business development Business architect IT architect
a. Capability modeling
5 Datamapping
Identify data assets needed to provide digital products and services
Digital business development Data architect IT architect
a. Data architecture
6 Digital technology architecture
Sketch digital technology architecture
Data architect IT architect
a. Digital tool chain
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Technique 1a: Customer Journey Approach
Orientierungsphase Finanzierungsphase Abschluss
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Bearbeiter
Kunden-betreuer
BearbeiterBearbeiter
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Technique 1b: Multi-Channel Analysis
Channel used in consumer process illustrative channel use.
Information Advice Return ServiceShipmentTrack
and TraceSaleAvailability Payment
TV/Radio
Mailing
Store
Internet
Phone
Fax
Text message
Ch
an
ne
ls
Consumer Process
Source: Migros.
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Technique 1c: Consumer Process Modeling
«Ecosystem»
Information Flow.Process Scope
Interact w/ Service
ProviderUse Service
ReflectCustomer
ExperienceBook
Search andGet Info
Consumer Process
Legend:
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Technique 2b: Network Analysis in the Ecosystem
2007
Media
2012
NB: Graphs show betweenness centrality, i.e. the distribution of power in a network.
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Technique 3b: Digital Artifact Design
With digital technology the content and services gets separated from the physical medium
This leads to a modular layered product architecture
The modular layers can be decoupled
Products become digital platforms by themselves
Multiple stakeholders can contribute – and compete! – at different stages across the four layers
Ex.: Apple and amazon with iPad vs. Kindle and iPad & Apps
cables, transmitters
network standards
application functionality
data products
computer hardware
operating system
Source: Yoo et al. (2010).
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Technique 3c: Design Thinking
Design Thinking
Stage Gate
TRIZ
Six Sigma
Scrum
Improvement / Development
Incremental innovation
Revolutionary innovation
Disruptive innovation
... creates a new market which unexpectedly overtakes an existing market.
... an unexpected innovation in an existing market.
... the gradual improvement of a product by using new insights.
... the improvement/development of a product through better use
of existing resources.
Source: University of St. Gallen, Institute of Information Management, 2014.
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Technique 4a: Digital Capability Modeling
Hybrid (modular) product platform
management
Innovation & marketcapitalizing agility
Value proposition
Business analytics & information-drivenproblem-solving/ decision making
Operational adjustment agility
Process automation & digitization/ virtualization
Digital / IT mindset & abilities
Value architecture
Multi-channel connectivity to
ecosystem
Value network
Revenue creation models for hybrid modular products
Cost optimization & scalability of ordinary capabilities / resources
Value finance
Organizational capabilities (“competitive priorities for
digital business”)
IS capabilities
Ecosystem control
Clear lead / ownership of digital initiatives
IT business partnerships
Analytics ability: recognize and prepare the relevant data
Metadata: data provenance & data credibility transparency
MDM & metadata mgmt.
„The golden record“ across systems and ecosystem
New databases and BI tools understanding
IT personnel expertise
Ad-hoc, predictive & prescriptive analytics
Visualization & self-service BIDWH & BI
Data integration
Data privacy & data security
Scalability, speed & cost efficiency
Data architectureGovernance of external and shared
dataSource: University of St. Gallen, Institute of Information Management, 2014.
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Technique 5a: Data Mapping
Source: Hilti, 2014.
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CONTENT
Digitization
Digital Business Engineering Approach
Business Benefits
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The Digital Business Engineering approach delivers multiple business benefits
Accelerated time-to-market
Guided digital business design
Fast deployment
Leading edge
Built on latest knowledge on digital business models
Research-driven
Proven methodology
Sound method engineering expertise
Used in real-life cases
Neutral approach
Combines best practices
© Fraunhofer
DIGITAL BUSINESS ENGINEERING
Prof. Dr. Boris Otto
Dortmund, January 2015
Source: Financial Times, 2014.