Thursday, September 8, 2011

Emerging Business Models and IT being a Driving Force

No doubt Information Technology (IT) has contributed (still doing) to new business models despite the fact that our global economy has been battering a lot. Vertical industry is no longer a choice by default. Web, Social Networking, smartphones, location based services and now business over cloud opens a Pandora box of new business paradigms. Innovation in business models has broken the business giants of the past. See how Apple's iPhone shattered the Nokia's business and her market. Yahoo was equally surprised when she was swayed away by Google. Ebay and Amazon conceptualized new markets. IMO, the following are the important factors which help in morphing the business model:

  1. Align your business with the technology. Understanding the technology and leveraging its capabilities in transforming your business model is very important aspect. The best example is Apple's iPhone vs Nokia's multi-models. A single technically innovative product can bring many folds of revenue as compared to segmented feature sets based product flavors for the different markets (unless you can identify different customer segments). Compare revenue of Apple's Mac OS with Microsoft Vista (or Windows 7)...
  2. Access to Customer and her retention. Customers are everywhere but there should be ways to connect. IT a vital role here. It opens new avenues of selling opportunities.
  3. Value Chain = Efficient IS + Supply Chain. Speed plays a crucial role here. If your IS department is not efficient in terms of quality and time, it is going to increase your costs.
  4. Profit = Product + Service.

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