How should organisations respond to the future connected digital economy? How should they adapt themselves, their products, services and operations to do so?
Here at WMG’s Business Transformation group, we have been busying ourselves with both the practice and the research in this space.
“Businesses faced with disruption brought on by technology strive to overcome the challenges these changes bring, but they also need to transform themselves if they are to make the most of these opportunities.”
New economic opportunities are constantly arising from the rapidly developing digital economy. Businesses faced with disruption brought on by technology strive to overcome the challenges these changes bring, but they also need to transform themselves if they are to make the most of these opportunities.
To help organisations and markets transform for the future, let me give you some background to our thinking.
The traditional school of thought in business research would see a holistic approach as that of a challenge in practice, and that knowledge from different disciplines is integrated only in the practice domain. While this could be true of a traditional industrial economy, we would argue that in a connected digital economy where the relationship between the firm and its stakeholders and markets/customers is much more tightly coupled (change one, change all), we need a different approach to research and knowledge creation in business.
We would argue that in this new world, there is a fundamentally different way to create knowledge in business. And that is to take a holistic and systemic approach, where the interactions between the different domains of business knowledge (strategy, marketing, operations, finance) take centre stage. This is unlike traditional business school research, which often sits silo-ed in their various domains.
The unit of analysis in this research approach, exhibiting the holistic and interactive nature of the challenge, is the business model ie. the firm’s offering (value proposition), its experience/consumption/use (value creation), and the appropriation of rents/benefits/revenues (value capture). The business model, however, is nested within the economic model in which the firm operates ie. as Michael G Jacobides describes, the platforms and markets that decide ‘who does what, and who gets what’. With the rapid progress of technology in the connected digital economy, the three business model components are tightly coupled and they interact with one another, while the business model also interacts with the economic model at the higher level.
This would therefore require transformation in the way the firm competes, which in turn will impact on research into supply chains, markets, organisational behaviour and human resources, and on operational and delivery issues, governance, strategy and financial controls. This is the approach taken by the WMG Business Transformation group, which develops theoretically cutting-edge business research that is systemic, future-focused, prescriptive, and impact-oriented.
Yet, how do we translate this research to help businesses and companies transform themselves for the future connected digital economy?
Enter BIG (Business Innovation Group), which brings together the research, teaching and outreach activities of the Business Transformation group, together with our partners in industry and government. How does BIG work?
Here at WMG, we produce technological and engineering research which is usually translated into innovation and impact directly through engagement vehicles such as the HVM Catapult and theInstitute of Digital Healthcare (IDH).
However, there are times when the technology and engineering research developed forms part of an organisation’s transformation, ie. when it requires changes in the organisation’s business or economic models. As the knowledge transfer arm of the Business Transformation group, BIG is the innovation and impact route of choice for such technologies. (see diagrammatic illustration of BIG & IIPSI (International Institute of Product and Service Innovation).
Our Special Interest Groups in Healthcare, Creative Industries and the Internet-of-Things are very important to BIG. They function as a forum for future collaborative work across WMG internally to catalyse new ideas, and we hope to share with you some of these thoughts and discussions.
We are sharing the cutting-edge research developed by the Business Transformation group on the BIG blog, please visit and if you see something you like leave a comment, contact us, and come join us at our events.
Professor Irene Ng is is the academic lead of WMG’s Business Transformation Group, as well as director of the International Institute of Product and Service Innovation (IIPSI). Follow her on twitter.