Information System Management Article summary week 1-7

Includes all relevant articles for the course ISM for IB from week 1 to 7.

Preview samenvatting (5 van de 14 pagina's)

Article 1: The digitalization triumvirate: How incumbents survive
Firms that exploit customer-driven technological desires can transform a market or an entire
industry
è Customer frustration associated with old operating models, coupled with firm inertia, need
to be viewed as inflection points that should be taken as opportunities rather than threats
Strategic inflection points
è Opportunities for change
è Digital technologies can provide opportunities for incumbent firms to enhance and expand
their product and service portfolios
Digitalization within the incumbent´s operating model
è Digitalization means different things within different functions and at different locations in
the business mode
è Technology is the connecting force behind the creation of the business digitalization
triumvirate
è Three types of digital transaction platforms (each with equal power in the engagement)
o Process digitalization
o Communications digitalization
o Buyer digitalization
1. Process digitalization
o Comprises the technological toolkits that companies use to interact with the
channels
o Goal: operational excel ence with a focus on automating information processes
among employees internally so that the engagements between channel members
and customers are as informed as possible
o Effective technology utilization creates bridges between the company, its channels,
and its customers
§ Information moving and sharing on the highest level
o Focus fal s on the digital processes of customer relationship management (CRM) and
sales force automation (SFA)
§ CRM refers to the multichannel digitalization of the principles, practices, and
guidelines used by the company to track interactions with customers
§ Objective: manage the customer engagement lifecycle
§ SFA applications offer software solutions to assist a company in coordinating
all sales activities
§ Through investments in CRM systems, sales can be digitalized, which enables
companies to do further research, predictions, and adaptations on many
levels
o Successful process digitalization wil provide a company with a wealth of customer
information in the form of a data triad that creates value for the incumbent firm 2. Communications digitalization
o Firms need to understand digital marketing and social media usage as a way of
communicating with customers and generating sales
o Goal: create a closer relationship between the channel members and the customers
o High tech and high touch for improved engagement and enhanced service
o It is imperative that companies work closely with channel members to arm the
salesperson or independent distributor with data and technology that wil enable the
continual creation of better customer experiences 3. Buyer digitalization
o Goal: making the customer feel a part of the company and the company a part of the
customer
o Intimacy and engagement, in which the consumer is a participant in the co-creating
and sharing process, create multiple touch points between the customer and the
company, the customer and the channel members, and, importantly, among
customers
o Three objectives:
1. Generation: the solicitation of ideas, suggestions, and designs
2. Refinement: customers and company collaborating to refine features
3. Creation: collaborations developing a prototype
Final findings:
1. Digitalization does not necessitate incumbents be first movers, however they must be early
movers
o Requires maintaining a transformational mindset
2. Digital investment must be strategic to protect the core, valued by customers, and leverage
existing strengths in new ways
3. The key to effectively engaging with digitalization to fulfil customer expectations is to
understand where the different types of digitalization interconnect and interact
4. Incumbents should use their experience in an industry as a position of strength
General guidelines:
è Embrace digital disruption as an opportunity
è Understand the different types of digitalization within the digital triumvirate
è Assess the existing business model to determine what needs to change
è Capitalize on technologies the company has inhouse and from the marketplace
è Cross-pollinate digital ideas from other industries, companies, or business lines
è Inspire digital disruption that leverages current products, strengths, or customers
è Invest in requisite employee and channel member training
è Pivot quickly as speed can be a strategic advantage
è Develop a culture of digital prioritization
Article 2: the age of continuous
Connected strategies: customers get a dramatical y improved experience, and companies boost
operational efficiencies and lower costs
The old approach: companies used to interact with customers episodically, when customers came to
them
à buy what we have
à break the traditional customer journey into three distinct pieces:
1. Recognize when the customer becomes aware of a need
2. Request when he or she identifies a product or service that would satisfy this need and turns
to a company to meet it
3. Respond when the customer experiences how the company delivers the product or service
4. Repeat, the company learn from existing interactions and shape future ones
The new approach: thanks to new technologies, companies can address customers’ needs the
moment they arise, even sometimes earlier
à with connected strategies, firms can build deeper ties with customers and dramatical y improve
their experiences
Respond to desire strategy:
- providing customers with services and products they have requested and doing it as quickly
and seamlessly as possible
à for customers who enjoy being in the driver’s seat
à essential capabilities:
- fast delivery
- minimal friction
- flexibility
- precise execution
- companies need to listen carefully to what customers want and make the buying process
easy
Curated offering strategy:
- get actively involved in helping customers at an earlier stage of the customer journey
- delights customers and also generates efficiency benefits for companies by steering
customers toward products and services
à for customers that value advice but stil want to make the final decision
à key capability:
- personalized recommendation process
Coach behavior strategy:
- helps with the challenge of customers identification of their needs in a timely manner
- proactively reminds customers of their needs and encourages them to take steps to achieve
their goals
à works best for customers who know they need nudging
à essential capability:
- deep understanding of customer needs (what does the customer really wants to achieve)
and the ability to gather and interpret rich contextual data (what has the customer done or
not up to this point?)
- a company needs to receive info constantly from its customers so that it does not miss the
right moment to suggest action
- the technical challenge is the audio training guides and plans
Automatic execution:
- allows companies to meet the needs of customers even before they become aware of those
needs
- customers authorize a company to take care of something and from that point the company
handles everything
à essential capabilities:
- strong trust
- rich flow of info from the customer
- ability to use it to flawlessly anticipate what they want
Repeat dimension helps a company in two forms of learning:
1. It allows a company to get better at matching the needs of an individual customer with the
company’s existing products and services
2. Companies can learn at the population level, which helps them make smart adjustments to
their portfolios of products and services
Which connected strategies should we use?
Week 3: article strategies for two-sided markets
Two sided networks: can be found in many industries, sharing the space with traditional
product and service offerings
à differ from traditional value chains (values move from left (cost) to right (revenue))
Two-sided Network effect: the platforms value to any given user largely depends on the
number of users in the networks other side
à common mistake in two-sided networks:
- managers typically relied on assumptions and paradigms that apply to products without
network effects
Platform:
- Embodies an architecture (design for products, services, and infrastructure
facilitating network users’ interactions) plus a set of rules (protocols, rights, etc.)
- Same-side effect: in which increasing the number of users on one side of the network
make it either more or less valuable to users on the same side (typically negative)
- Cross-side effect: in which increasing the number of users on one side of the network
makes it either more or less valuable to the users on the other side (typically positive)
Challenge 1: Pricing the platform
- Two sided platforms have the “subsidy side” (group of users who are highly valued)
and the “money side” (the other user group
- The goal is to create a “cross-side” network (if the platform provider can attract
enough subsidy users, money-side users wil pay to reach them)
- The challenge for the platform provider with the pricing power on both sides is to
determine the degree to which one group should be encouraged to swel through
subsidization and how much of a premium the other side wil pay for the privilege of
gaining access to it
- Ability to capture cross-side network effects
- User sensitivity to price
- User sensitivity to quality (rather charge the side that strongly demands quality, you
charge the side that must supply quality)
- Output costs
- Users brand value
Challenge 2: Winner-take-al dynamics