Digitalization In A Company Context PDF

Digitalization in a Company Context Prof. Dr. Sebastian Fischer Bachelor of Arts | Business Administration/International Service Management | 2023 Definition of digitalization Historical Our understanding Digitalization is not a topic...

Digitalization in a Company Context Prof. Dr. Sebastian Fischer Bachelor of Arts | Business Administration/International Service Management | 2023 Definition of digitalization Historical Our understanding Digitalization is not a topic of In the narrower sense, the pure conversion of analogue into modern times digital data (e.g. images, texts, sounds) (Depending on the source) This allows: Digitization begins with Reproduction at low cost Conversion of Arabic numbers Reproduction without loss of quality into binary characters by Gottfried Wilhelm Leibnitz (1646 Distribution in a few seconds – 1716), Efficient machine evaluation and distribution with the development of the first Influence on: telegraph in 1833 by Samuel Use of information and communication technology FB Morse Business models and processes The introduction of the first mainframe computers in the Working world, education, society, politics 1960s. Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only The fourth industrial revolution The change from analog to digital data creates new technological possibilities à Digitalization as a driver of a new industrial revolution Change in general conditions for companies, especially production, marketing and sales Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Global Megatrends 2022 (PMI) Digital disruption Demographic change Labor shortage Climate crisis Economic changes Civil and equality movements https://www.pmi.org/learning/thought-leadership/megatrends Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digitalization as a megatrend The term megatrend was first coined by John Naisbitt in 1982. Megatrends are particularly characterized by their great potential for change, which initially only appears slowly but lasts over decades. This means it differs significantly from fashion and consumer trends, which often only have an impact for a few years. According to Horx, a megatrend has the following characteristics: The emergence of a megatrend can occur over decades and last over 100 years Megatrends often grow slowly The origins of a megatrend usually lie in the past A megatrend is omnipresent and sends signals into all areas of life A megatrend has a global character despite regional differences A megatrend loses none of its momentum despite a few setbacks (but not a linear progression) Naisbitt, J. (1982), Megatrends. Ten new directions transforming our lives, Warner Books, New York, NY. Horx, M. (2011), Das Megatrend-Prinzip. Wie die Welt von morgen entsteht, Deutsche Verlags-Anstalt, München. Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Global Megatrends 2022 (PMI) Digitalization is (more than?) a global megatrend. Digital disruption Digitalization is driving disruptive changes in every industry , at all times, everywhere in the world. It is not an (exclusively) technological concept , but rather a revolutionary change in our society that affects all areas of life. It makes the world more informed, more transparent, more efficient, more objective and therefore better - and not just in the consumer sector, but especially when it comes to issues such as innovative strength, equal opportunities and Streibich, K.-H. (2015), Software industry in environmental protection. transition: The digital company of the future. In: Linnhoff-Popien , C./Zaddach , M./Grahl, A. (eds.), Marketplaces in transition. Digital Overall, digitalization drives growth and prosperity like no strategies for services in the mobile Internet, other change of our time. Springer Vieweg, Berlin, pp. 15–18. Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only The “ABCD” of digitalization Automation and algorithms Broadband Internet Algorithm = clear instructions for solving a specific problem. Internet as a global network of smaller networks in which (built into software) computers communicate with each other. We distinguish between “peer-to-peer (P2P) communication” (between two By using algorithm-based software and hardware, computers) and “client-server communication” (more processes that were previously carried out by humans typical case when sending an email or are (partially) automated retrieving a website A b Computer _ Hardware: all physical components used to process, C D D ata Data is the basic building block of digitalization and store or transmit data a collective term for sequences of characters that represent information Software: Calculation rules such as operating systems or other programs along with the associated data Information is measured by sensors or determined by people and entered in the form of data (and can therefore Devices of all sizes, from smartphones, laptops, desktops be read and processed by machines) to mainframes and supercomputers Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Effects of digitalization on companies and customers strong Digital Digitalization brings potential for disruption transformation of as market entry barriers are reduced. business models Companies like Uber, Netflix and Airbnb are attacking traditional business models Economic impact Digitalization offers companies new Digital distribution opportunities for further development, in particular the ability to address their own target group regardless of time and place small amount At the same time: changed customer Digital products expectations due to digitalization, i.e. a and infrastructure larger gap between digital outsiders, digital immigrants (born before 1980) and digital natives Late 1990s Turn of the from 2010 millennium Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Proposal for a uniform understanding of the term “digital transformation” “[..] new digital technologies “[..] consistent and consistent such as B. to use social networking of all economic “[..] when ICT is used, not media [..] to bring about sectors and the adaptation of “[..] Use of technology to only for automation, but significant improvements, “ Digital transformation refers to the introduction or use of all actors to the circumstances resulting from optimize the performance or reach of a company.” e.g. B. in the area of rather new possibilities are created in companies, customer experience or the digital technologies to increase productivity, create value the new digital economy.” development of new administration or in society.” or improve social welfare” business areas.” ( Ebert, C./Duarte, CHC (2018), Digital Transformation, IEEE Software, Volume 35, No. 4, pp. 16–21. ) “[..] fundamental change in “[..] conscious and ongoing “[..] goes far beyond the the corporate world through digital development of mere digitization of the introduction and “It is digital transformation companies, business models, resources. It results in values establishment of new when changes are brought ways of generating ideas and and sales that are made technologies. The basis is about in aspects of human methods – both on a tactical possible by digitalization.” the Internet, some of which life based on digitalization.” and strategic level.” has fundamental effects on society.” Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Objectives of digital transformation Implementation of new and revision of existing business models Increase productivity Organizations Generation of new values and competitive advantages, e.g. new customer communication options or new functions Improving technical standards Promoting an innovative and collaborative culture Changing the education system so that learners are prepared for new technologies and their application Introduction of new communication infrastructures that are not only fast and low- Society maintenance, but also inexpensive and have high availability Attention to data protection and data security despite increasing digitalization Improving the availability and quality of digital services provided to people (e.g. by public authorities) Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Characteristics of digital transformation Digital transformation is inevitable Digital transformation is irreversible The digitalization megatrend continues and provides Better cost/benefit ratio of digital products means analog assistance with many questions, e.g. B. globalization, technologies disappear from the market social change or urbanization Once such a technology has established itself on the Companies must take this path in order not to be overtaken market and convinced users, they get used to the by other companies technology, at the end of which it becomes indispensable, e.g. B. the smartphone Digital transformation is necessary at ever Digital transformation is subject to uncertainty shorter intervals High development speeds and constant technological For many companies, constantly reviewing and adapting innovations make it impossible to predict exactly which has become the norm. company will be successful with which products and services in the future. Example: Alphabet Inc. (Google parent) is opening up many new business areas in order to participate in market opportunities early on Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Germany’s level of digitalization maturity in comparison Compared to EU member states: Domestic German analysis DESI: Digital Economy and Society Index Digitization index (Created by the EU Commission) (Created by BMWK) Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital Economy and Society Index ( DESI: Digital Economy and Society Index ) The EU Commission has been monitoring the digital progress of the member states since 2014 Every year, DESI contains country profiles that help Member States identify areas of priority need for action Connectivity Landline broadband, mobile broadband, mobile speeds and prices Human capital Digital skills, software components, IT specialists, IT graduates Internet use Internet users, Internet traffic, online activities, online transactions (e.g. banking) Digital public services Users of e-government, maturity of the services offered, open data Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digitalization index of the Federal Ministry for Economic Affairs and Climate Protection The basis is a company survey, with a total of 2095 answers recently taken into account. Answers in the following categories: Digital maturity level, processes and networking Purely digital products and products with digital components Internal to the Digital procurement channels, digital sales channels, digital business models company Further training for IT specialists/users, employment in digitalization professions Research and innovation activities (expenses, people, patents) Broadband availability households, businesses, landline, internet and mobile phone prices Administrative-legal framework conditions (including public online services) External to the Society: Digital transformation as a topic in the press, level of internet usage company Skilled workers, graduates, trainees in digitalization professions Innovation landscape: including publications, start-ups, research collaborations Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only 3 reasons for slow digitalization in Germany and what is being done about it. Political decision-makers are still often “digital immigrants ”. They do not understand 1. the connections and effects of digitalization - or they ignore them out of short-term political calculations. 2. 3. ü The advisory board “Young Digital Economy” was founded in 2013 to advise the Federal Minister of Economics on issues relating to the digital economy ü Founding of the Bundestag Committee “Digital Agenda” in 2014 (“The committee is intended to discuss the various aspects of digitalization and networking across disciplines and to set the decisive course for digital change. Network policy is not a ‘niche topic’ for the committee”) § Enough? Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only 3 reasons for slow digitalization in Germany and what is being done about it. 1. 2. Digitalization as a topic is currently not suitable for winning elections. 3. § Some digital topics can be found in the election programs of the various parties for the 2012 federal election, e.g. E.g.: ü Expansion of 5G, improvement of infrastructure, especially in rural areas ü Expansion of e-government offerings, digitization of schools ü Building digital skills at school, robotics in care ü Improving cybersecurity and leveraging artificial intelligence § Enough? Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only 3 reasons for slow digitalization in Germany and what is being done about it. 1. 2. There are currently no ministries that can significantly advance the topic of 3. digitalization and have the appropriate budget. ü For a long time there has been no clear responsibilities within the federal government ü Until the federal government was formed in 2018, three federal ministries were responsible for digital issues: the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of the Interior and the Federal Ministry for Transport and Digital Infrastructure. ü The current federal government has set up the Ministry of Transport and Digital since 2021. This was published by https://www.digitalstrategie-deutschland.de/ in August 2022. Sufficient? Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Summary of learning unit 1 Digitalization in the narrower sense: pure conversion of analogue into digital data, which was an issue at the latest with the invention of the first telegraph in 1833 Digitalization in the broader sense also includes the conversion of processes and actions into a language that can be read by machines Digitalization enables digital data to be reproduced as often as desired and distributed within seconds at low costs. This leads to profound changes, e.g. B. on existing business models as well as the use and deployment of information and communication technologies. Digitalization is the fourth industrial revolution. Because digitalization meets the relevant criteria, it can also be described as a megatrend (including global significance or long-term persistence) Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Summary of learning unit 1 Digital transformation and digitalization are often incorrectly used synonymously, even though they are different concepts. We understand digital transformation as changes brought about in the company that are based on the use of new digital technologies. These changes are brought about consciously and are linked to specific objectives. Companies must constantly revise their own business model in order to adapt to new technological conditions (risk of market displacement) Digital transformation is characterized by four central characteristics: 1) Digital transformation is inevitable, 2) Digital transformation is irreversible, 3) Digital transformation is necessary at ever shorter intervals, 4) Digital transformation is fraught with uncertainty. Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Summary of learning unit 1 The Digital Economy and Society Index (DESI) measures the degree of digitalization of the economy and society in European countries. It is formed from assessments of five focus areas: connectivity, human capital, internet use, digital technology integration and digital public services. Germany achieved 56.1 out of a maximum of 100 points and is therefore in the middle of the EU. With the Digitalization Index, the Federal Ministry for Economic Affairs and Climate creates its own index for the status of digitalization in the German economy. Politicians have now discovered digitalization as a topic for themselves. Most recently, in August 2022, the Federal Ministry of Transport and Digital published a digital strategy for Germany. Learning unit 1 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only The developments of new technologies over time “Hockey Stick Curve”: technological achievements at ever shorter intervals Which of these many technologies should companies now deal with? Technologies with the potential to fundamentally change entire markets/industries are referred to as “disruptive”. Examples: MP3, digital camera, USB sticks Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle Gartner Hype Cycle lists new technologies and divides them based on their maturity Due to the large number of new technologies, not all of them are included in the hype cycle. Almost all technologies that are included in the hype cycle have yet to pass through the “valley of disillusionment” and are therefore far from the plateau of productivity (value creation in the market). Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: I Technology trigger: Technology emerges and gets its first attention through venture capital and initial use cases. Expectations are continually rising: “There has never been anything like 3D printing before and it has great potential!” Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: II Peak of inflated expectations: Hype in mass media through initial applications. Proliferation of providers and technology use laggards “3D printing will radically change our entire lives and the way we produce products.” first negative press/concerns Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: III Trough of Disillusionment: Negative press leads to a decline in demand and attention for the technology Problems with the use of technology become known, User and early providers are withdrawing “Unfortunately, 3D printing is quite prone to errors.” Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: IV Slope of Enlightenment: Realization that the technology has value despite setbacks. Consequence: newer/better products, more investments, increased expectations “3D printing is suitable for printing simple products at home after purchasing the appropriate printing samples online.” Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: V Plateau of Productivity: Technology continues to spread until it becomes part of everyday life “3D printing has become part of online commerce.” Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Gartner Hype Cycle: The hype cycle cannot really predict whether and how the productivity plateau will develop for any technology. Some technologies will disappear from the market, others will plateau, but much less compared to the initial hype Companies should not wait too long for a technology to be developed. As the examples of Amazon, Uber and Airbnb show, waiting too long can lead to other market participants having already gained an unassailable lead. Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Often technologies never even reach the slopes of enlightenment Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only “Tech Radar” or “Trend Radar” Example: Zalando ADOPT: Technologies used in the Zalando production environment TRIAL: Technologies that have been successfully used in project work, but are not yet robust enough for productive use ASSESS: Technologies with clear potential added value and in which research and prototyping activities are worth investing HOLD: Technologies not recommended for new projects. Technologies that we think are not (yet) worth investing in (further). https://opensource.zalando.com/tech-radar Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation Use of IT infrastructures and services that are not kept on site on local computers, but are rented as a service and which are Cloud accessed via a network (e.g. the Internet). Computing It frees users from the costly provision, installation and support of their own computing systems Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation Use of IT infrastructures and services that are not kept on site on local computers, but are rented as a service and which are Cloud accessed via a network (e.g. the Internet). Computing It frees users from the costly provision, installation and support of their own computing systems Artificial intelligence (AI) simulates human intelligence using Artificial machines, particularly computer systems. intelligence AI includes learning, reasoning, and self-correction. Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation “Internet of Things” refers to increasing networking between Internet of Cloud computing objects (equipped with processors and embedded sensors) both with each other and externally with the Internet. Things (IoT)/ IoT in the context of networking machines and processes in Industry 4.0 industry is also referred to as “Industry 4.0”. Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation “Internet of Things” refers to increasing networking between Internet of Cloud computing objects (equipped with processors and embedded sensors) both with each other and externally with the Internet. Things (IoT)/ IoT in the context of networking machines and processes in Industry 4.0 industry is also referred to as “Industry 4.0”. Artificial intelligence Virtual reality (VR): ignoring the real environment and focusing Virtual and on real-time computer-generated, interactive, virtual environments augmented Augmented Reality ( AR): Enriching the real world with reality additional information or other computer-generated content Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation Internet of Things Cloud computing Big data (mass data) is large amounts of unstructured and semi- structured data that companies produce on a regular basis. Big Data Big data also means the ability to effectively store and analyze data in order to gain new business-relevant insights Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Selected key technologies of digital transformation Internet of Things Cloud computing Big data (mass data) is large amounts of unstructured and semi- structured data that companies produce on a regular basis. Big Data Big data also means the ability to effectively store and analyze data in order to gain new business-relevant insights A continuously expanding list of records chained together using Artificial intelligence cryptography. VR/AR Blockchain decentralized transaction protocol between two or more parties, where every change is recorded transparently Among other things, the basis for Bitcoin (cryptocurrency) Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Cloud computing Historical Nowadays At the beginning of the computer age, Essential resources such as application systems individual large computers were in use. and data are centralized again, but not on separate Purchase, maintenance and use were mainframes, but on "servers on the Internet" (cloud) very expensive Advantages: Utilization figures for mainframe computers were often over 95% (result: constant and worldwide availability of complex request and release process for applications and data via the Internet computing power with long queues for optimal utilization of the centralized data users) centers With the introduction of the PC, Process optimization, cost reductions and approaches to centralized mainframe easier maintainability computers were replaced by decentralized architectures (increased efficiency by eliminating waiting times for users) Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only 2021 Gartner‘s Magic Quadrant for Cloud Database Management Systems Challenger: Market leader: current market needs Serving a wide range of use addressed & good service cases, even if not excellent do not adapt quickly enough to everywhere market challenges or are not Significant market share and ambitious enough. many referable customers. Niche provider: Visionaries: Specialist providers can be significant investments in the excellent for specific use development of unique cases or in individual regions technologies. Often not suitable for a wide Services are still under range of use cases construction, many functions are in development and not yet generally available. Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Service models cloud computing Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Overview of individual cloud providers Amazon Web Microsoft Google Services Azure Cloud (AWS) aws.amazon.com azure.microsoft.com cloud.google.com Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Big Data Expression Characteristics New diverse data sources through digitalization in the private and VOLUME VELOCITY economic environment Amount of data Data processing Big data in the narrower sense: collected, stored and speed requirements “mass data” from, for example, the retained for analysis Internet of Things and social media, purposes as well as digital image, audio and video databases New technologies from the Hadoop ecosystem and machine learning VARIETY approaches allow big data to be Dealing with structured and efficiently persisted and analyzed unstructured data Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Technologies and tools in the big data environment Horizontal scaling In the big data environment, parallel infrastructures (horizontally scaled) are often used +RAM Data is usually distributed vertical redundantly and fail-safely across Scaling + CPU several computer nodes and analyzed in parallel (e.g. via Map- Reduce ). current another another CAP theorem applies in distributed server server server systems : consistency , availability and failure tolerance cannot be achieved at the same time tolerance Horizontal scaling ) can be achieved Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Types of Machine Learning ARTIFICIAL INTELLIGENCE Intelligence is usually enabled through the use of machine learning (“Learning Systems”) MACHINE LEARNING Supervised Unsupervised Reinforced Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Types of Machine Learning MACHINE LEARNING Supervised Unsupervised Reinforced Training data with correct Training data does not contain Through a combination of result (“label”) available. a label, so only patterns in the “punishment” and “reward,” an Optimization takes place data or deviations from agent interacts with the based on the model “normal” can be recognized environment and learns estimation and the training optimal behavior data Examples: Customer group formation Examples: Examples: (“clustering”) robotics Classification of customers Anomaly detection (e.g. Shop recommendations Sales forecast credit card fraud) Investment portfolios Object detection Learning unit Learning unit 2 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Blockchain: advantages and disadvantages Advantages Disadvantages Fail-safe (entire blockchain is managed by Bitcoin: Generating the hash values in the everyone in the network) consensus mechanism (proof of work) is very complex, high power consumption (in Anonymous (transaction partners do not February 2021 approx. 119 terawatt hours necessarily have to reveal their identity) per year > power consumption in the Secure (modern encryption techniques and Netherlands) electronic signatures) Inadequate legal and regulatory framework conditions Trustworthy (no central authority) Few CIOs see blockchain as a game Transparent (all transactions known to all changer for their company. Other network participants) technologies are more promising (AI, cloud computing, big data) Learning unit 2 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model: definition of terms Business Model: Business & Model Models help to reduce complex facts in the Logic of a company real world in order to, among other things, recognize connections and design solutions Strategic direction to problems Idea / philosophy Business is the (profit-oriented) exchange of Configuration of business goods and services between business activities partners Way of generating revenue A business model is therefore the reduced Reflection of business activity representation of the operational provision of benefits. The market and competitors are not Understanding of the term business model in practice (33 respondents) considered in the narrower sense Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Customer Key Activities Relationships Key Value Customer Partners Proposition Segments Key Resources Channels Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Customer segments characterize the Customer Key Activitiesgroup of people or organizations that a company wants to serve, e.g.Relationships B. Women aged 25 and over. Key Value Customer Partners Proposition Segments For whom should value be created? Who are the most important customers? Key Resources Channels Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Customer relationships describe the type of Customer Key Activities relationships a company enters into with its Relationships customers, e.g. personal contacts or automated Key support. Value Customer Partners Proposition Segments What type of relationship does each customer segment expect Key from Resources companies? Channels Which customer relationships already exist? How costly are these relationships? How are they integrated into the rest of the business model? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas The different customer segments are reached via Customer Key Activities channels and the value propositions are conveyed, Relationships e.g. via a web shop. Key Value Customer Partners Proposition Segments Through which channels should the customer segments be reached? Key Resources How are they achieved now? Channels How are the channels integrated? Which ones work best? Which channels are the most cost-effective? How do you integrate Cost the channels into customer Structure Revenue Streams processes? Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Value Propositions are the products or services that represent value for a specific customer segment, e.g. satisfy Customer a need. Key Activities Relationships Key Value Customer What value do you convey to Partners customers? Proposition Segments Which of the customers' problems do you help solve? Key Resources Channels Which customer needs are met? Which product and service packages should be offered to each customer segment? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Key activities represent the activities that are necessary in a company for the business Customer Key Activities model to work, e.g. in production or sales. Relationships Key Value Customer What key activities do the value propositions Partners Proposition require? Segments What key activities do the distribution Key Resources channels, customer relationships and revenue Channels streams require? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Key resources can be physical, financial, intellectual or human and are necessary for Customer Key Activities the business model to function. Relationships Key Value Customer What key resources do the value propositions Partners Proposition require? Segments What key resources do the distribution Key Resources channels, customer relationships and revenue Channels streams require? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas This is about the suppliers and partners who are essential to the business model, e.g. Music label Customer Key Activities for Spotify. Relationships Key Value Who are the key partners? Customer Partners Proposition Who are the key suppliers? Segments What key resources should partners source? Key Resources Channels What key activities do partners perform? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas Customer Key Activities The cost structure breaks down the most important Relationships costs incurred by the business model. Key Value Customer Partners Proposition Segments What are the main costs associated with the business model? Key Which key resources areResources the most expensive? Channels Which key activities are the most expensive? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Business model canvas This building block represents the income that can be obtained from each customer segment. Customer Key Activities Relationships What values are customers really willing to pay for? Key What Value are they paying for now? Customer Partners Proposition Segments How do you pay now? How would you like to pay? Key Resources Channels How much does each revenue source contribute to total sales? Cost Structure Revenue Streams Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Value proposition Customer Segments Gains Gain creators J Products & Customers Services Jobs Pains L Pain relievers Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Functional tasks: ValueFinding a solution to a specific proposition Customer Segments problem (e.g. air conditioning, washing machine, heating). Gains Gain creators Social tasks: achieving status or prestige (e.g. branded clothing, luxury cars) Emotional tasks: achieving a certain feeling (e.g. J Products & Customers safety, joy, security) Services Jobs Supportive tasks: help to complete another task Pains (e.g. compare different products) L Customer tasks shouldPain be ordered relieversaccording to their importance for the respective customer group Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Pain points getValue in theproposition way before, during or after Customer Segments completing tasks Gains Gain Functional pain points: creators e.g. that the solution doesn't work, the customer's status is low, or it's not fun to complete a task. Obstacles: Things that prevent the customer from J Products & Customers completing their “task”, such as: Lack of time or the Services Jobs price of a solution Pains Risks (undesirable potential outcomes): what can go wrong, e.g. Loss of prestige or dismissal. L Pain relievers Pain points should also be prioritized Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Required benefits: Value Without this type of benefit, the proposition Customer Segments solution offered will not work (washing machine must be able to clean clothes) Gains Gain creators Expected benefits: This type of benefit is at least expected, even if it would function without it (a washing machine should be able to run various J programs)& Products Customers Services Jobs Desired benefits: Benefits that customers want and could think of themselves (it would be nice if the Pains washing machine was easy to install) Unexpected benefits:Pain L relievers Benefits that go beyond the customer's expectations (“the laundry gets clean even at 30 degrees”) Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Value proposition Customer Segments Gains Gain creators J Products & Customers Services Jobs Pains L Pain relievers Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Value proposition Products and services can have Customer different Segments characteristics: Gains Gain creators Physical/material (e.g. washing machine) J Intangible (e.g. copyrights, services) Digital (e.g. music, software, Products & platforms/marketplaces) Customers Services Jobs Finance : (e.g. investments/funds, insurance) Pains L Pain relievers It is important to divide products and services according to their importance to each customer segment Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Value proposition Customer Segments Gain creators describe how products/services Gains Gain creators ensure that customer benefits (gains) are achieved J Beneficiaries do not have to achieve every customer benefit, but they should address the Products & most important ones Customers Services Jobs Pains It is important to divide benefit creators according to their importance for the respective customer L Pain relievers segment Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Value Proposition Canvas Value proposition Customer Segments Pain relievers describe how products/services address pain Gains points of the respective customer Gain creators segment J It is not necessary to have a specific pain reliever for every pain point, but the most important pain points should be addressed. Products & Customers Services Jobs Pains As with all previous components, it is important to break them down based on how important they are L Pain relievers to the customer. Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Characteristics of a good value proposition...fits into a business model …focuses on the customers’ most important tasks, pain points and benefits...focuses on tasks, pain points and benefits that have not (yet) been addressed...are not only functional, but also emotional and social....focuses on a few tasks, pain points and benefits, but solves them very well....is better than the competition in at least one dimension....focuses on tasks, pain points and benefits that many people have or for which (some) people are willing to pay (a lot) of money...is difficult to copy. Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only How can a good value proposition be achieved? Testing, testing, testing Communicate the value proposition briefly and succinctly: Our [product or service] helps [customer segment] with the [tasks to be done] of [verb] and [verb]. (+ , but not like [competitor value proposition]) Work with prototypes and use them to collect feedback, the important thing is: They look at the market with fresh eyes instead of assuming what doesn't work. Give test customers something tangible, don't be (too much) in love with your own idea Work iteratively, not all aspects have to be perfect from the start (fail fast – learn fast) Creativity is the key! Log findings and progress. Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital business models Different levels of maturity Completely analog Analog business model Digitally enhanced Digital business models business model with digitalized processes business models Analogue processes Products and services are Use of digital Platform-based (e.g. without the influence of analog technologies to expand Amazon as a marketplace technologies on value the business model (e.g. for suppliers and buyers) creation. (maximum e.g. Use of digital selling devices with e-mail systems or word technologies such as B. sensors to determine Data-driven (e.g. social processing programs ERP systems to make maintenance needs) networks that use internal processes more consumer data for Products and services are efficient advertising purposes) predominantly analogue models 0 1 2 3 Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital business models definition Digital business models We define digital business models as business models that enable transactions and/or interactions via digital networks. Platform-based (e.g. These transactions and interactions are of value to Amazon as a marketplace for suppliers and buyers) one or more target groups. For example, web offerings such as Amazon, Data-driven (e.g. social Google, Spiegel Online and Facebook, but also networks that use consumer data for apps such as Spotify or WhatsApp. advertising purposes) models 3 Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Pipeline vs. platform business models pipeline Shopping production Wholesale retail trade customer Transactions and interactions platform between providers and buyers are platform made possible by the platform and Provider Demander generate added value for both parties. Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Advantages of platform business models Platform: Capturing the value created through interaction on the platform Binding platform users to your own company Technological dominance: You can set your own standards Access to a large data pool Central role in the value creation ecosystem (customer access) and thus control of the rules of the game Generating income through platform use Generate revenue by marketing insights from data platform Provider Demander Provider: Requester: Easy access to customers and value creation partners Quick market overview and price comparison Reliable standards, complex technology base do not Easy access to products and providers have to be built up yourself Price advantages through intra-platform competition Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Platform actors Demander Consumer Business administration Consumer to consumer Consumer to Business Consumer to Administration Consumer e.g. eBay classifieds Job exchanges with advertisements from job Electronic tax return seekers Business to consumer Business to business Business to Provider Administration Business e.g. online ordering via Ordering from companies internet shop from suppliers Electronic tax return Administration to Administration to Administration to Consumer Business Administration administration Online vehicle registration Public procurement Domestic/foreign transactions Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Variants of platform business models E-commerce platform Social platform Sales of products and services via the Internet Channel user interaction Open (for offers from other providers) or closed User data can be evaluated and sold for (only your own offers) marketing purposes, for example Functional or IoT platform User platform Providing the functional infrastructure for using Distribute applications to users products and services Market adaptation via technology partners (e.g. smartphone manufacturers, app stores) Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Phenomena of platform-based business models Chicken and egg Self-reinforcing growth The winner takes it all problem The value of a platform As soon as there are Platforms with many increases with the number enough buyers and suppliers and buyers and of participants (suppliers suppliers on a platform, high growth dynamics and consumers) self-reinforcing growth make other platforms dynamics can occur unattractive Example: Amazon now accounts for 50% of all online retail in Germany. Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Revenue generation in digital business models Direct revenue generation Indirect revenue generation Transaction proceeds commission Transaction Connection fees dependent Usage fees Transaction Setup fees Banner advertising independent Basic fees Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Revenue systems of digital business models Margin model Commission model Basic fee model A target price is determined Services from other Non-transactional fee to based on the costs of companies or private provide service offering providing the service and providers are passed on to the desired margin our own customers The actual use of the offers is often free of charge, but Ideally, this should be If the placement is additional fees may also be chosen so that the fixed successful, a charged and variable costs are corresponding commission covered will be paid Lerneinheit 3 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital change is forcing companies to make changes Digital transformation strategies Transformation of market development …along the customer and sales side using new digital technologies (marketing, sales and logistics) reaction to the digital change along specific more strategic Fields of action Learning unit 4 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital change is forcing companies to make changes Digital transformation strategies Transformation of market development Transformation of business processes... along the operational business using new digital technologies (IT infrastructure, organizational structure, process organization and reaction to the production) digital change along specific more strategic Fields of action Learning unit 4 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital change is forcing companies to make changes Digital transformation strategies Transformation of market development Transformation of business processes HWR Berlin’s digital campus management system reaction to the for students and lecturers digital change sam.hwr-berlin.de (coming in 2023) along specific more strategic Fields of action Disruption of the business model Generating competitive advantages through changes to the business model using digital technologies Learning unit 4 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital change is forcing companies to make changes Digital transformation strategies Transformation of market development Transformation of business processes HWR Berlin’s digital campus management system reaction to the for students and lecturers digital change sam.hwr-berlin.de (coming in 2023) along specific more strategic Disruption of the business model Fields of action Digitalization of products/services Existing products/services are further developed with the help of digital technologies and receive additional benefits Online video library à video on demand (streaming) Learning unit 4 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Digital change is forcing companies to make changes Digital transformation strategies Transformation of market development Transformation of business processes HWR Berlin’s digital campus management system reaction to the for students and lecturers digital change sam.hwr-berlin.de (coming in 2023) along specific more strategic Disruption of the business model Digitalization of products/services Fields of action Online video library à video on demand (streaming) Learning unit 4 WS 2023 Digitalization in a Company Context | Prof. Dr. Sebastian Fischer | internal use only Ambidexterity: acting efficiently and flexibly as an organization at the same time high Integrate Revolutionize (ambidextrous (start-ups) organizations) Exploration/ Focus on disruption