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Accelerating Digital Reinvention® with component business modeling

Fill the gaps, identify opportunities, and chart an enterprise reinvention roadmap

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Traditional business models are in a state of flux
In the most recent IBM Institute for Business Value CEO study, 60 percent of CEOs surveyed said that more competition is coming from outside their industry, a 50 percent increase since 2013. As a result, many business leaders today find themselves on what feels like the horns of a dilemma. Do they digitally reinvent their businesses, or try to hang on as discrete parts of their organizations are ravaged by nimbler, technologically superior upstarts from outside their core industry?

Digital Reinvention for long-term gain
Digital Reinvention™ is about reimagining all key elements of your business strategy, operations, and technology, with a central focus on creating improved customer experiences. It calls for embracing technological change and disruption, and viewing an enterprise as a collaborative unit that is part of a wide ecosystem.

Moreover, digitally reinvented businesses commit to learning by doing and continuously calibrating and improving. They see innovation as a cross-company and cross-value chain opportunity, engaging all employees as well as clients, business partners, and even regulators when appropriate. And an ever-increasing proportion of touchpoints will be digital. Eighty-two percent of CEOs say there will be more digital interaction with customers and partners over the next three years, up from only 60 percent in 2013.

Here is the dilemma: On one hand, postponing Digital Reinvention may provide short-term comfort, even while business slowly erodes. On the other hand, Digital Reinvention can be a slow, painstaking process that may cause immediate internal disruption both to a company’s processes and to its culture. However, the long-term benefits of Digital Reinvention–with the corresponding benefits of improved customer experiences–make it a worthwhile endeavor. 

It’s like the story of the student who is running to school pushing a bicycle. A bystander asks the student, “Why are you running?” “I’m late,” replies the student. “Then get on your bike and ride it; that will be faster,” the bystander suggests. Zipping past, the student shouts, “I don’t have time.”

The potential disruption of Digital Reinvention may be giving you pause, but there’s a better course of action. Component business modeling (CBM) may be just what you need to increase the speed and reduce the disruption of Digital Reinvention within your enterprise. You can use CBM to help examine organizational capabilities and strategic priorities, as well as to identify gaps and opportunities and develop a reinvention roadmap.

Getting to Digital Reinvention faster
CBM allows you to make customer issues and experiences the primary evaluation criteria for future capabilities modeling. At the same time, with CBM, Digital Reinvention can be “modularized”–broken down into a set of smaller activities–allowing you to determine the pace and timing of change.

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Meet the authors

Edward Giesen

Connect with author:

, Partner, Digital Business Strategy and Transformation

André Ribeiro

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, Senior Manager, Digital Strategy Center of Competence, IBM Global Business Services

Anthony Marshall, Senior Research Director, IBM Institute for Business Value

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