Digital business development & portfolio. How to develop and manage digital business streams

Abstract

“The internet is like a wave. You either learn to swim with it or you will sink.” (Bill Gates). With this quote, Gates already pointed to the development of a digital economy, a completely new economic model based on information technology, where we now live. On the one hand, these new opportunities in information and communication technology (ICT) are changing the way companies have to operate. On the other hand, they are also changing customer expectations in a rapid and continuous manner that transforms them into fast moving targets. Therefore, legacy as well as non-legacy businesses have to rethink their business models, predict customer expectations and have to focus on customer centricity as well as on their own uniqueness on the market. In other words, organizations have to be very agile: they have to enable flexibility in their business models and diversify their risks in a well-managed way to remain competitive in such a dynamic environment. For these reasons, business model innovation is a crucial ability to manifest one’s own inimitability. Furthermore, business model innovation enables companies to search for new business logics and groundbreaking ways to create and capture value for its stakeholders. Nevertheless, such an innovative approach is risky, primarily due to its uncertainty of commercialization. Therefore, companies should not replace existing business models, but assess them with regard to the risk of a digital disruption and start with potential new business models next. This also requires changes in the organizational structure and asks for new methods to manage such a complex system of various business model development directions in a well-controlled way. One approach to cope with this challenge could be the digital business portfolio derived at the University of Applied Sciences and Arts Northwestern Switzerland (FHNW).