To maintain competitive market advantage, it is indispensable for organizations to consider digital technologies in both their strategy and business model.
This article looks at both of these processes and the importance of the business analyst as a catalyst for change.
Defining a business model
From a strategic management perspective, a business model answers the question: how can a company make money.
The book Clarifying business models: origins, present, and future of the concept states that “a business model is a conceptual tool containing a set of objects, concepts and their relationships with the objective to express the business logic of a specific firm.”
Therefore, the focus of a business model is on two things:
(1) whether customers will value what the company is providing, and
(2) whether the company can make any money from what customers value.
Defining a digital business strategy
Digital strategy is at the forefront of an organization’s overall business strategy and an internal enabler for executing its business model.
To benefit from digital technologies, organizations implement digital business strategies; that is, “a pattern of deliberate competitive actions undertaken by a firm as it competes by offering digitally enabled products or services” (Woodard et al., 2013, p. 539).
Digital business strategy is an important topic as more and more organizations are inherently digital companies or partly offer their products and/or services digitally.
Another definition of digital business strategy by Anandhi Bhadarawaj and others in an article in MIS Quarterly is “simply that of organizational strategy formulated and executed by leveraging digital resources to create differential value.”
The authors state that “the formulation of digital business strategy includes the design of products and services and their interoperability with other complementary platforms, and their deployment as products and services by taking advantage of digital resources.”
Based on these definitions, a digital strategy can be implemented in a variety of ways such as:
1) incorporation (through innovation or use of recombination) of digital technologies within the organization’s internal workings or processes and logic, or
2) through the external offering of digital platforms, products or services to its customers.
Furthermore, a digital business strategy can be viewed as a trans-functional organizational strategy that is realized internally and/or at the forefront of the organization’s strategy.
Digital Transformation: Bringing together a business model and a digital strategy
As new digital technologies are always in development, digital transformation has become prominent as organizations seek to implement their latest digital business strategy.
Once an organization has defined a digital strategy, there may exist a gap between the defined to-be strategy and/or business model and the current as-is strategy and/or business model.
Closing this gap is where digital transformation comes in.
Salesforce, a leading company in cloud computing, defines digital transformation as “the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements”.
Gregory Vial in “Understanding digital transformation: A review and a research agenda” defines digital transformation as “a process that aims to improve an entity by triggering significant changes to its properties through combinations of information, computing, communication, and connectivity technologies”.
The role of the business analyst
In digital transformation projects, business analysts are extremely valuable for positioning an organization to efficiently execute a digital business strategy.
According to the International Institute of Business Analysis (IIBA), a business analyst is an agent of change, and as such “a business analysis is used to identify and articulate the need for change in how organizations work, and to facilitate that change”.
Business analysts can also be valuable in identifying and articulating the need for digital transformation and working to bring about the subsequent change.
To do this effectively, however, business analysts should utilize not only their analytical skills but additionally their “greater knowledge and understanding of customers and competitors, as well as increased knowledge about innovative technology that meets the demands of today’s business world” (IIBA).
Particularly when it pertains to understanding innovative technologies, the business analyst’s knowledge should extend to application know-how to support innovative business models. Moreover, the analyst should use agile delivery methods with the benefit of not only providing incremental delivery of value in a prioritized manner but also allowing the business analyst to stay up to date with the latest technological developments.
In summary, more and more business models are enabled with digital technologies. The constant evolution of these technologies creates a need for digital transformations. Business analysts are experts in facilitating change in organizations in general and can also be effective in bringing about digital transformations provided they are knowledgeable of the latest digital technologies and delivery methods with an emphasis on agile approaches and customer and market knowledge.
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Bhadarawaj, Anandhi, et al. “Digital Business Strategy: Toward A Next Generation of Insights.” MIS Quarterly, vol. 37, No. 2, June 2013, pp. 472-474., misq.org/.
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What is Business Analysis? | IIBA®. (n.d.). IIBA.Org. Retrieved March 18, 2022, from https://www.iiba.org/professional-development/career-centre/what-is-business-analysis/
What is Digital Transformation? | A Definition by Salesforce. (n.d.). Salesforce.Com. Retrieved April 8, 2022, from https://www.salesforce.com/eu/products/platform/what-is-digital-transformation/
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