9/21/2023 0 Comments Backbone definition go 95“They had a wonderful concept, but in the end, they were far behind in understanding what their customers wanted - and what they would pay for,” Ross said. ambitiously set out to develop Predix, its cloud-based platform for the “industrial internet of things,” but grossly underestimated demand. “It involves a lot of experiments, innovation, and tests to see what your customers actually want.” “It’s the process of accumulating knowledge about what a customer will buy,” said Ross, who presented her ideas at the recent MIT Sloan CIO Symposium. In order to successfully develop and deliver constantly evolving digital offerings, companies must develop a reservoir of organizational knowledge about both customer problems and potential solutions. Platforms provide the technological and organizational basis for developing digital offerings, but they’re worthless if companies don’t leverage them to develop offerings that customers find valuable, Ross said. Shared customer insights - organizational knowledge about what kinds of digital offerings customers want and are willing to pay for. Without a platform, companies are in danger of creating for their digital offerings the same kind of siloed systems that are apt to burden their legacy systems. "The platform allows you to take your offerings and personalize them for different customers with different needs.” “Ī digital platform provides components - business, data, and infrastructure - that you can assemble and reuse as you create digital offerings for your customers,” said Ross. On the flip side, if companies already have a powerful backbone, the other building blocks can build on that foundation, Ross said.ĭigital platform - a repository of business, technology, and data components facilitating rapid innovation of new offerings and enhancements. Without an operational backbone, leadership is typically consumed with executing and maintaining core processes, preventing them from developing and commercializing digital offerings. The backbone typically incorporates customer resource management, enterprise resource planning, and other enterprisewide systems and processes. “An operational backbone is the underlying foundation of standardized, automated business processes to ensure operational excellence in your core business,” said Ross. Operational backbone - a set of integrated and shared systems, processes, and data that ensure efficiency, reliability, and transparency of operations and transactions. Together, they form a foundation on which companies can rapidly develop and scale their digital offerings: The other two are organizational capabilities: shared customer insights, and an accountability framework that coordinates the efforts of autonomous teams. Three of the five are technology platforms: an operational backbone, a digital platform, and an external developer platform. “Our research suggests the reason why it’s so hard is that most established companies do not yet have the capabilities they need to become digital.”Īlong with fellow CISR colleague Martin Mocker and UT Austin professor emeritus Cynthia Beath, Ross spent years studying companies at the forefront of digital transformation, including DBS Bank, LEGO, Toyota, Royal Philips, and USAA, among many other global organizations. “There’s an impatience to get going and show results, but becoming a successful digital business is not easy,” said Jeanne Ross, principal research scientist at the MIT Sloan Center for Information Systems Research. At Schneider Electric, it means not just selling electrical equipment, but offering a digital services platform that allows customers to intelligently manage their sourcing and use of energy.īut the path toward digital transformation isn’t straightforward - or quick. Pressured by disruptive startups on one side and tech behemoths on the other, established companies in nearly every market segment are feeling pressure to transform themselves into digital organizations.īusinesses are scrambling to leverage an ever-evolving array of digital technologies - social, mobile, analytics, cloud, artificial intelligence, blockchain, and the “internet of things” - to develop new value propositions for their customers.Īt Audi AG, that means experimenting with shared economy-type services that help customers solve their mobility problems without necessarily having to buy a car.
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