Digital transformation: opportunities to create new business models

Abstract

Purpose: According to IBM research, companies seeking opportunities in an era of constant customer connectivity focus on two complementary activities: reshaping customer value propositions and transforming their operations using digital technologies for greater customer interaction and collaboration. This paper aims to address this issue. Design/methodology/approach: The paper explains that businesses aiming to generate new customer value propositions or transform their operating models need to develop a new portfolio of capabilities for flexibility and responsiveness to fast‐changing customer requirements. Findings: The paper finds that engaging with customers at every point where value is created is what differentiates a customer‐centered business from one that simply targets customers well. Customer interaction in these areas often leads to open collaboration that accelerates innovation using online communities. Practical implications: Companies focused on fully reshaping the operating model optimize all elements of the value chain around points of customer engagement. Originality/value: The article explains how companies with a cohesive plan for integrating the digital and physical components of operations can successfully transform their business models.