Welcome to the Digital business World and Emergence of Digital

Innovations!

Digital innovations that drive new business models

Dr. A.Mohammadian

Department of IT management

University of Tehran

mohamadian@ut.ac.ir

Overview Innovation Innovation Trends IT innovation Trends IT innovation vs digital innovation changing role of the CIO business model innovation Business model components and taxonomies Workshop: Designing your business model Digital business innovations Workshop: patterns to innovate your business models

what is innovation?

Innovation ≠ Incubator

Innovation ≠ Accelerator

Innovation ≠ Startup

Innovation ≠ Lean Anything

Innovation ≠ Open

Innovation ≠ Reorganization

Innovation ≠ Incubator

Innovation ≠ Accelerator

Innovation ≠ Startup

Innovation ≠ Café’s

These are all physical places to do innovation

Innovation ≠ Incubator

Innovation ≠ Accelerator

Innovation ≠ Startup

Innovation ≠ Café’s

These are all physical places to do innovation

Having them does not guarantee any innovation

will happen

Dr. A.Mohammadian

Innovation Development

• Places: – R&D, Engineering, Incubators, Accelerators, Open

Innovation, etc.

• Methodology: – Waterfall, Agile, Lean

• Teaching methods: – Case-studies, Mentors

• Metrics: – KPI’s, Pivots, TRL,…

• Funding – SBIR, VC, Corporate VC, M&A, Incremental, etc.

What is Innovation?

Incremental vs Radical

Incremental

Doing new things or creating new products and services

Optimizing existing processes

Radical

Complete transformation of how products or services are offered (business model innovation)

Level of innovation

Steve Blank

Three Levels of Innovation

Known

Unknown

Partially Known

Level of innovation is defined by whether the business model is being executed, extended or explored!

Execute

Explore

Extend

Operating margin growth in excess of competitive peers

Erik Brynjolfsson (MIT Sloan economist and digital-business expert ):

The biggest driver of innovation today is Information Technology.

Hottest IT Innovation Trends

(IOT,Big Data)

IT innovation vs digital innovation

IT is a enabler

IT is the business

, growth of the businesses

IT Innovation = What IT People Do

Digital Innovation = What Non-IT People Do

Digital innovation vs business model innovation

IBM: business model innovation is dependent upon information technology (IT).

Digital innovation & the changing role of the CIO

CIOs and the IT organization are an integral part of the enterprise business model

valuable innovation insights from the Global CEO Study have particular relevance to CIOs and the IT organization

IBM study indicates that CEOs will continue to rely on their IT leadership to drive innovation initiatives

CIO is a critical player in a company’s business model innovation

CIOs need to go from being an enabler of the business to becoming THE business

IBM Global CEO Study Your company's next CEO would be a CIO

The CIO’s role in driving business model innovation

Deepen business understanding by leveraging componentisation techniques

Innovate the IT business model first and implement processes to run IT like a business

Implement a flexible, responsive infrastructure capable of supporting innovation initiatives.

IBM Global Technology Services September 2006, Business model innovation –the new route to competitive advantage. Part of the CIO implications series

Business model innovation

Business model as a new unit of analysis

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Business Model

•Customer segment

•Value Proposition

•Customer relationship

•Channels

•Cost & revenue model

•Key Partners

•Key activities

•Key Resources

Technical Inputs

•Feasibility

•Performance

Economic Outputs

•Value

•Price

•Profit

Occurrences of the business model term

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Nasdaq

Business Models

S&P

Occurrences of the term « business model » in business and academic journals(in Business Source Premier) compared to the NASDAQ

جهان در مدل های کسب و کار برتر ICTبخش

36

ICT سهم کسب و کارهای مختلف در بخش

telecommunication services providers

30%

electronics manufacturers, 26%

IT equipment and systems producers

13%

IT services providers, 11%

semiconductor firms 8%

communication equipment 5%

software publishers 4%

Digital Business

3%

بخش های مختلف حسب بر ICTکسب و کار برتر 250درآمد روند

بوده اند، در حالی که بیشترین رشد درآمدها درصد دارای 31کسب و کارهای اینترنتی با رشد ساالنه درصد بوده است 10حدود ICTدر بخش های دیگر

گروه توسعه کسب و کار در فضای مجازی 38

بر ICTکسب و کار برتر 250اشتغال روند حسب بخش های مختلف

دارای بیشترین رشد اشتغال بوده انددرصد 15رشد کسب و کارهای اینترنتی با.

گروه توسعه کسب و کار در فضای مجازی 39

250میانگین درآمد ایجاد شده از هر کارمند در برحسب بخش های مختلف ICTکسب و کار برتر

925)میانگین درآمد کارکنان در کسب و کارهای اینترنتی باالتر از سایر کسب و کارهای بخش فاوا بوده است ( هزار دالر بوده است 320هزار دالر که باالتر از میانگین

گروه توسعه کسب و کار در فضای مجازی 40

توسط نقش سرمایه گذاری های صورت گرفته ICTدر کل بخش VCشرکتهای

بیلیون دالر بوده است 22حدود 2000بیشترین مقدار آن در سال

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در راه اندازی VCنقش سرمایه گذاری های صورت گرفته توسط شرکتهای کسب و کارهای اینترنتی

که نشان دهنده جذابیت این نوع )%62)بوده است 2000بیلیون دالر در سال 13.5دارای رکورد ، .سرمایه گذاری ها در این بخش نسبت به سایر بخش های فاوا می باشد

42

تاثیرات فرابخشی کسب و کارهای اینترنتی برحسب میزان سرمایه گذاری صورت گرفته در هر بخش

در مدل کسب و کارنوآوری دیجیتال چگونه افراد به

Nobody wanted to buy them because they were expensive

Larry page – Sergery brin(russia)

BM innovation typology Frankenberger & Weiblen (2013):

An incremental way to create and capture value by change in one or multiple BM elements

Schneider & Spieth (2013):

Radical change with the use of opportunities in the external environment(BM taxonomies)

Workshop1: How to design your business model

elements ?

Hottest digital Innovation Trends in business models

Dr. A.Mohammadian

The Crowds

New Funding Models

Open innovation

Business Ecosystem

Sharing Economy

Maker Movement

Disruption

Factors

Digital innovations in business worlds

Platform businesses

Long tails

Crowdsourcing

Paradigm shift(TCE theory): Rethinking WORK on networks

‘Work’ has traditionally constituted value-creating activities performed within the organization. This traditional view of work is based on the fact that the

cost of interacting and coordinating workflows is much lower when carried out within the organization.

However, the rise of the internet, and more recently the cloud, brings down these coordination costs and enables value to be created outside the organization(co-creation)

Sharing Economy Peer to Peer sharing Mesh economy Collaborative Consumption

VC investment Growth

The Emergence of Ecosystems

Facebook Evolves from Social Network to Social Ecosystem

How Apple's iPhone rapidly destroyed Nokia?

There are more than 1.3 million apps 25 billion download

Airbnb vs The Hotel Industry, Who Win?

Multi sided platform business models

Business as platform (a platform is a business model, not just a piece of technology)

Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value.

http://www.slideshare.net/e27sg/echelon-2013-platform-thinking-business-model-design-by-sangeet-paul-choudary

http://www.slideshare.net/e27sg/echelon-2013-platform-thinking-business-model-design-by-sangeet-paul-choudary

Pipe Thinking vs. Platform Thinking

Internet map

Workshop2: Patterns to evaluate and innovate every

component of your digital business model

گروه توسعه کسب و کار در فضای مجازی 120

Any Question?

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References McKinsey http://www.mckinsey.com/insights/marketing_sales/five_no_regrets_moves_for_superior_customer_engagement

http://digitalinnovationtoday.com/word-of-mouth-still-most-trusted-resource-says-nielsen-implications-for-social-commerce/

http://www.mckinsey.com/insights/consumer_and_retail/how_retailers_can_keep_up_with_consumers

Intel/Autodesk/TechShop /Arduino http://www.anandtech.com/show/7387/intel-announces-galileo-quark-based-arduino-compatible-developer-board

http://gigaom.com/2013/10/10/intel-steps-up-to-help-techshop-fund-its-menlo-park-location-move/

http://www.fastcompany.com/section/most-innovative-companies-2013

http://www.huffingtonpost.com/2013/05/29/robert-scoble-google-glass_n_3354956.html?utm_hp_ref=influencers-and-innovation

http://www.fastcompany.com/section/most-innovative-companies-2013

http://www.innovationmanagement.se/2013/10/03/live-web-event-taking-open-innovation-management-one-level-up/

http://www.fastcompany.com/3019901/nike-ceo-hints-at-collaborative-future-for-fuelband

http://crowdfundbeat.com/crowdfunding-index/

http://www.wired.com/insights/2013/08/innovation-culture-and-social-technologies-getting-real-work-done/

http://www.mixprize.org/story/unleashing-inclusive-innovation

http://www.innovationmanagement.se/2013/09/19/an-industrial-process-for-driving-innovation-and-start-ups/

http://www.mixprize.org/hack/global-solutions-local-failure-overcoming-barriers-implementing-open-innovation

http://www.altimetergroup.com/2013/04/four-disruption-themes-for-business.html

http://www.wired.com/insights/2013/10/why-crowdsourcing-is-the-next-cloud-computing/?utm_content=buffer499c4&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer#!

http://www.kickstarter.com/projects/mymobilerobots/rk-1-a-wifi-arduino-mobile-robot-for-ios-and-andro?play=1&ref=search

http://www.indiegogo.com/projects/gecko-make-your-smart-phone-smarter

http://www.kickstarter.com/projects/juicetank/juicetank-the-first-ever-iphone-charger-and-case-i?ref=search

http://www.newyorker.com/reporting/2013/07/29/130729fa_fact_gawande?currentPage=all

http://www.tlnt.com/2013/02/26/how-google-is-using-people-analytics-to-completely-reinvent-hr/

http://www.digitaltrends.com/mobile/samsungs-shotgun-phone-strategy/