Enabling Growth Through Business Model Innovation - Executive Insights

Enabling Growth Through
Business Model Innovation
Change is the only constant
SAP Executive InsightThe saying "Change is the only constant" has never been truer than in to-day's global economy. Change, or as Joseph Schumpeter coined it, "creative destruction," is essential for achieving growth and moving forward. As orga-nizations seek additional growth beyond their existing markets and activities, executives look beyond the existing business model to introduce entirely new ways to monetize capabilities, collaborate with partners to define new value propositions for customers, or enter new markets with an entirely new offer-ing. Global competition necessitates that even organizations in the most tra-ditional of industries look for differentiation beyond their product line, and successful business model innovation brings ongoing differentiation. No longer is this phenomenon applicable only to a short list of large, well-known, innovation-driven organizations in fast-changing industries. Rather, entrepre-neurial spirit and enabling technologies have given life to new business mod-els such as shared services, offshoring, e-commerce, and virtual supplier col-laboration, among others, across all industries.
It doesn't come as a surprise that global executives, in a survey conducted by Economist Intelligence Unit and sponsored by SAP AG, believe future competitive advantage will be based on business model innovation rather than on products or services. More than half of the participants didn't see new products or services as the basis of their competitive advantage; in-stead, they look to the introduction of new business models.
This SAP Executive Insight explores the most common areas of business model innovation, describes how organizations are leveraging innovation in different parts of their business, and shows how to implement a solid and adaptive foundation that is flexible enough to support rapid innovation.. W hat are the main dimensions of innovating on my business model holistically?. H ow do I enable my organization to pursue business model innovation?. W hat role does software play in supporting my business transformation?
2 SAP Executive Insight - Enabling Growth Through Business Model InnovationEXECUTIVE AGENDA
At a Glance
Business Model Innovation The Adaptive Enterprise The Importance of IT
Innovation has many dimensions. For a There is power in growth based on The role of IT in the enterprise has long time, innovation referred to new- business model innovation. That's evolved over many generations of product development in R & D labs. because it's much more difficult for major technology breakthroughs. For a Business model innovation is broader competitors to imitate business model long time, the main focus of IT was on and impacts the enterprise holistically. innovation than innovation based on a the ability to lower cost in the enter-It doesn't necessarily focus on doing new product. New business models are prise by hard wiring processes and new things, just on doing things differ- much harder to copy than a new prod- ensuring total compliance from users. ently. Business model innovation can uct, since they are less transparent to While this approach helped to reduce be pursued along three dimensions: outside observers and are dependent costs significantly and fit well-defined ..Customer-centric innovation. on organization-specific competencies. processes, it hindered innovation. Changing the way you interact with Most of the key competencies of orga- Defining a new process and changing customers, such as redefining the nizations that are able to differentiate the underlying technology required customer experience or the market based on business model innovation lengthy and time-consuming modifica-you serve, can be a way to grow your have a culture of flexibility that: tions to existing hardware and soft-business. ..Facilitates change while existing busi- ware. In addition, legacy systems and ..Supply chain-centric innovation. By ness models are still successful multiple instances of core software collaborating differently with suppli- ..Empowers people and enables pro- prolonged any decision to implement ers, you may be able to improve cesses to be adapted easily to change. design, fulfillment, and sourcing initia- change tives to drive growth. Implementing ..Establishes an organization that is Today's new ... [download for more]