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Why Digital Business Requires You to Transform Your Business Model

Through 2017, insufficient business process management (BPM) maturity will prevent 80% of organizations from achieving the desired business outcomes from their digital business strategies.

Digital business success will require organizations to take bold actions; including inventing new business models and changing the way they function, according to Gartner. Gartner predicts that, by 2017, 70 % of successful digital business models will rely on deliberately unstable processes designed to shift with customers’ needs.

“Many organizations are either beginning, or in the midst of, digital business transformation initiatives,” said Julie Short, research director at Gartner.

“We expect that only 30 percent of these efforts will succeed. To be part of that 30 percent,business and IT leaders must be ready and willing to innovate rapidly from a business model, business process and technology perspective.”

As a result of business model innovation, some business processes must become deliberately unstable. Deliberately unstable processes are designed for change and can dynamically adjust to customers’ needs. They are vital because they are agile, adaptable and “supermanoeuvrable” as customers’ needs shift.

They are also competitive differentiators, because they support customer interactions that are unpredictable and require adhoc decision making to enable larger, more stable processes to continue. “It’s imperative to break away from linear business processes and deploy standardized processes to reap the benefits of digital business,” said Ms. Short.

“The need for this shift is intensified by the introduction of many types of internet-connected ‘things’ into the business environment. Things like smart machines generate real-time information for other machines. Business processes must be designed for change to enable organizations to exploit this information.

Through 2017, insufficient business process management (BPM) maturity will prevent 80 percent of organizations from achieving the desired business outcomes from their digital business strategies. Digital business changes the competitive landscape, so that one-time process reinvention is not enough. Organizations must become more resilient, adaptive and creative in order to master and sustain sudden, disruptive changes, as well as longer periods of transition — and even radical transformational changes that will be more frequent, unforeseen, varied and often unavoidable. Because organizations cannot control such changes, they need to sense, recognize and quickly respond to them.

“With adaptive change, the goal is not to try to tackle big change on every front. Rather, the focus is on coping with the external nature of major change and its impact on organizations, cultures, governance, technologies and metrics,” said Mr. Kerremans.

“Change agents will likely need to employ several change response types to advance BPM maturity to the point where traditional business process improvement initiatives can turn into big change initiatives capable of supporting sustainable competitive advantage in a digital world.”

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