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It’s hard to find a successful business that isn’t in some sense a digital business. Increasingly, CIOs, chief data officers, and business unit leaders find themselves at the forefront of value creation in the modern enterprise. Their challenge: Unlock the full potential of information and other digital assets.
But there’s a problem. Most digital initiatives today simply digitize existing business models to gain operational efficiencies and increase scale—purely tactical approaches. The evolving discipline of digital economics helps executives identify and exploit new strategic opportunities based on the intrinsic value of digital assets: a digital-first strategy.
The opportunities are hard to overstate. Elevator/escalator manufacturer Schindler transformed itself into a mobility solutions company that provides value across the entire product lifecycle, including proactive maintenance based on sensor and historical data. And the potential goes way beyond data: Analogous to the growing API market, proprietary software algorithms can generate new revenue streams through marketplaces such as Algorithmia.
To take advantage of these opportunities, IT executives must create an information management system to catalog and control the provenance, quality, ownership, and potential uses of the organization’s most valuable data. Digital initiatives will require specialized skills in infonomics, which provides tools to formally account for information as a tangible corporate asset, and blockchain technology, a trend that promises to radically redefine the concept of digital value.
The one indispensable requirement is imagination, to look beyond what already exists and envision the inherent potential of digital assets. Applying the principles of digital economics, shrewd executives can help increase competitive advantage, enter and disrupt existing market segments, and create entirely new markets.
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