In todays fast moving economy business eventually need to adapt their business model to digital influences and take advantage of all the possible potentials that come with it. The increasing impact of digitalization on the corporate environment promises not only new opportunities for the development and innovation of business models but also new value creation potentials.

In the long-term product and process innovations will not secure long-term competitiveness, but business model innovations that capitalize on digital products, services and processes. Therefore, it is worthwhile to shed light on the two different objectives of innovations. The business model evolution enhances the previous business model whereas the business model disruption aims to break out of the dominant industrial logic. Within this context, one often speaks of sustaining and disruptive changes, which contain different potentials for the business model. In particular, disruptive or so-called revolutionary changes to the business model can lead to promising corporate success. However, it is also more difficult for companies to identify and implement them.

As such changes rarely happen over night, stages of development towards a business model which is enriched by digital technologies and application or even a fully digital business model can be defined.

eBusiness: E-business, has been an issue for many companies since the 90s, and is regarded as a prerequisite for any digitalization activities and marks the beginning of the digital transformation process. E-business marks the basic prerequisite for digitalization, namely the electronic representation of the business model. Within the so-called e-business, existing processes and if possible products are digitalized using technologies and applications such as ERP and CRM- systems[1], Computer Aided Design (CAD) and SMAC[2] technologies. Thereby the focus is on improving efficiency along the value chain, which allows the optimization of costs (reduction of process costs), time (reduction of process times) and quality (accuracy of data, global reach, improved conditions of collaboration).

Digital Value Proposition: The second stage of development is closely linked to the digital transformation of products and services. With the emergence of digital enablers, such as SMAC technologies, the high level of penetration of mobile devices, etc., and thus possible services, an increasing service orientation becomes possible and has the potential to change the logic of the existing value proposition. As a result, Internet-based and digital value propositions are becoming increasingly important and applicable.

Smart Value Chain: Furthermore, digitalization or digital transformation can go beyond e-business and a digital value proposition. It can also affect the processes of research, development and production. The buzzword here is industry 4.0. The focus is on the transformation of internal and intra-organizational processes with the endeavor to create an intelligent value chain meaning a flexible, decentralized and efficient control of processes.

Digital Business Model: The fourth stage of development - the Digital Business Model - will be achieved if production, processes and the value proposition are both digitally adapted, penetrated or even revolutionized. A digital business model is used when a high degree of service orientation is sought, data points are measured and collected, and digital enablers are used across all stages of the value chain or different elements of the traditional business

Of course, the boundaries of these stages are blurring and can be skipped depending on the organizational culture and external environment. With regards to the DIGITRANS Project the project partners were able to detect a series of examples in matter to their level of digitalization.

Companies such as Portokal bg LTD and Shterev Hospital from Bulgaria, Sobočan Interijeri d.o.o. from Croatia but also Biogena from Salzburg, Austria take “digital” initiatives which mainly focus on the e-Business, Digital value proposition and a smart value chain. Whilst the boundaries are blurry it can be stated that all three companies engage at some extent in the digitalization of their processes and try to enhance their service level. Also Kupmet Ltd. (Hungary) engages heavily in e-Business but also the implementation of a smart value chain by ensuring that “The product's production process can be fully traced from incoming raw materials to finished product delivery to the customer.”.

With regard to a smart value chain especially the business cases from Kovinarstvo Bučar (Slovenia) and) represent strong characteristics towards a smart value chain and steps towards a digital value proposition by providing the service of placing orders via an app.

Proterus Biostructure GmbH and Hermes Arzneimittel from Germany, both set great examples by enaging in e-Business activities but also the digital transformation of their value chain which resulted in a new IT-infrastructure that should result in higher competiveness, less administrative expenses and a higher degree of scalability.

The case from the German company Lecos GmbH also sets a very interesting example for a digital transformation process. Introducing a new system which optimized the complex project operations internally lead to a well-developed solution which is planned to be sold as a product to external companies as well. This example can be considered a hybrid between stage 3- smart value chain and stage 4 – digital business model.

The list of examples is not exhaustive and as it can be seen the mentioned companies engage in the transformation process by choosing activities which suit them best. Keeping this knowledge and results in mind the DIGITRANS method provides not only “grounded theory” but also a method tool which helps to move forward SMEs in the project partners regions.

The members of the DIGITRANS project are looking forward to gain even further knowledge and hope to be able to initiate business model changes in the respective workshops in the partner regions.

Sources:

Al-Debei, Mutaz M.; El-Haddadeh, Ramzi; Avison, David (2008): Defining the business model in the new world of digital business.

Amit, Raphael; Zott, Christoph (2012): Creating Value Through Business Model Innovation. In: MIT Sloan Management Review (53 (3)), S. 41–49.

Breitfuß, Gert; Mauthner, Katrin; Lassnig, Markus; Stabauer, Petra; Güntner, Georg; Stummer, Michael et al. (2017): Analyse von Geschäftsmodellinnovationen durch die digitale Transformation mit Industrie 4.0. Salzburg Research (Band 3).

Sauer, Roman; Dopfer, Martina; Gassmann, Oliver (2016): Geschäftsmodell als Gral der Digitalisierung. In: Oliver Gassmann und Philipp Sutter (Hg.): Digitale Transformation im Unternehmen gestalten. Geschäftsmodelle, Erfolgsfaktoren, Handlungsanweisungen, Fallstudien. München: Hanser, S. 15–27.

Weinberger, Markus; Bilgeri, Dominik; Fleisch, Elgar (2016): 20 Linsen auf digitale Geschäftsmodelle. In: Oliver Gassmann und Philipp Sutter (Hg.): Digitale Transformation im Unternehmen gestalten. Geschäftsmodelle, Erfolgsfaktoren, Handlungsanweisungen, Fallstudien. München: Hanser.

[1] Enterprise Resource Planning and Customer Relationship Management System

[2] Social Mobile Analytics and Cloud Technologies