Digitalization perspective Flashcards
What’s the difference between digitization and digitalization?
Digitization – the material process of converting analog streams of information into digital bits
Digitalization – the way many domains in socials life are restructured around digital communication and media infrastructures
What are the supply-side effects of digitalization on market structure?
Supply-side economies of scale – Smart factories which are highly automated, robot based, and no people needed?
Supply-side transaction costs – Smart services which are highly automated, robot based, and no people needed?
Paint the four fielder of digital ecosystems and entrepreneurial ecosystems
(D.E users, E.E institutions) = Digital user citizenship
(D.E digital infrastructure, E.E institutions) = Digital Infrastructure Governance
(D.E users, E.E Agents) = Digital marketplace
(D.E digital infrastructure, E.E Agents) = Digital Entrepreneurship
What does digital infrastructure refer to?
Broadband and mobile services that supports digitalization
Governance? Supply and demand
What are the new business models in society as a result of digitalization?
Industry 4.0 - Servitization, where companies moves from stand alone products into add on services to maintenance contracts, operational services, and outcome- or performance based offerings
Circularity
Paint the four-fielder where physical and virtual meets process and product level
(Process level, Physical) = Smart factory
(Process level, Virtual) = Smart operations
(Product level, Physical) = Smart products
(Product level, Virtual) = Smart services
Whereas the last two leads to technical dimensions of digitalization
What’s the digitalization paradox?
Vast investments in digitalization require significant increases in value creation and value appropriation to generate the needed returns. Additionally, implementation of digitalization requires investments in other capabilities as well.
What are the managerial challenges of digitalization?
Difficult to measure profitability across multiple dimensions
Organizational structure when transformed into a service organization
KPI:s (Average revenue per customer, customer lifetime value, acquisition costs)
What are the financial related challenges?
Income – evenly distributed? Better match between supply and demand? Remove barriers of entry?
Cost – cost of continuous support? Cost of customer retention?
Valuations- discounted cash flows or customer lifetime value?
Balance sheet – who should finance?
Digital entrepreneurship
Data-driven, experimental and exponentially scalable
Dynamic and continuously evolving outcomes and processes
Less focus on a single dominant actor (entrepreneur), instead open, collaborative, dispersed
Digital user citizenship
- Users providing data and labor for free
- Users participating in a shared economy by sharing their assets (AirBnB)
- Paid and unpaid users generating a large enough base for a paid product or service (tinder, spotify)
Digital marketplace
Platforms creating ecosystems (Alibaba)
