Q Guidelines: Technology Strategy Research Project Contents Objectives 2 Overview 2 Formatting Final Deliverables 3 Timeline and deliverables 3 Phase 1: Analysis of Digital Disruption at Industry Level 3 Goal of Phase 1 4 Deliverables for Phase 1 4 Rubric – Phase 1 5 Phase 2: Digital Business Transformation 6 Deliverables for Phase 2 6 Rubric - Phase 2 7 Appendix: List of Industries and Corporations 8 Objectives You will work in groups and will identify a company in an industry that is facing digital disruption. You will formulate a strategy – a digital transformation of business strategy – for the company and its business. You will analyze the nature of disruption faced by the industry in which your company resides, identify how digital technologies could disrupt the commonly accepted bases of the industry, such as the predominant business models, value propositions, and means of doing business. You will apply frameworks, concepts, tools and techniques learned in this course in formulating this business strategy for the company. You will also recombine the frameworks, concepts, and tools that you learn in new and insightful ways as you apply them towards this objective. In designing a strategy for the digital transformation of business, you will have to think carefully about several aspects of the firm [the company you have selected], including the information architecture of the firm, the new capabilities it will need, and the barriers to the successful implementation of your strategy. You will demonstrate how the strategy you formulate will help the firm guard against digital disruption and/or be a digital disruptor of its industry. This project is a multi-phase one. At the end of each phase, it suffices if your report consists of the deliverable for that phase. You do not have to incorporate the reports from the prior phase. Overview Let us start with a simple working definition of Digital Disruption. Digital Disruption occurs when new business models and digital technologies change the value proposition of existing goods and services. It is not about making goods and services cheaper or improving their quality (although Digital Disruption could result in these outcomes); it is not about making the production of goods and services more efficient. It is about changing the value proposition significantly. Example: Consider as an example a jet engine manufacturer that sells engines to companies such as Boeing and Airbus. Suppose that the jet engine manufacturer changes its business model to sell not engines but a service contract for millions of flying miles and preemptive maintenance. Further, suppose it does so by embedding a large number of sensors in its engines to monitor performance constantly as well as by tracking the aircraft and using data analytics to predict (and preempt) operational interventions. By leveraging digital technologies, the jet engine manufacturer is changing its value proposition from engines to flight performance contracts. We say that it attempts to digitally disrupt its competitors (note, we do not say anything about whether or not this is successful). Here the emphasis is not on selling more engines or cheaper engines or better engines but instead on selling a service. This involves a very different value proposition. Digital Business Transformation: In this example, we would observe that the jet engine maker is attempting a Digital Business Transformation. This observation gives us our working definition of Digital Business Transformation. We say that Digital Business Transformation is an attempt to change the business model or a company and/or change the Value Proposition of its offerings by application of digital technologies. Note it is not merely about more efficient manufacturing, productivity gains, better data analysis, faster processing of information, and better back-office functioning. Digital Business Transformation could well involve some of the above, but what it is about is changing the value proposition of a company’s offering and/or changing its business model. What if the jet engine maker were to succeed? What if the new model of doing business brings it significant gains in market share, revenue and profits? Well, in this case we would say that the jet engine manufacturer has disrupted its industry. A successful Digital Transformation of Business could well result in Digital Disruption. These working definitions of Digital Disruption and Digital Business Transformation will suffice for you to start working on your final project. Tip: This would be a good time to review the ideas of Value Proposition and Business Model. There are two easy working definitions below. Value Proposition: A Value Proposition is an encapsulation (statement of) the benefits that the buyer of a service or a product receives from the product or service. In other words, it is a concise description of the reasons a buyer should purchase a product or a service. There are very similar definitions of this concept that you can explore for a deeper understanding. Business Model: A business model represents the way in which a company creates, delivers and captures value. In other words, it encompasses the ways in which a company produces services and products, distributes them, prices them and captures revenues. There are other similar definitions of this concept that you can refer to for further understanding. Keep in mind we are not talking about just any disruption or just any business transformation. This project addresses Digital Disruption and Digital Business Transformation. This project calls for independent research. Your group is required to identify a company and produce a plan for its Digital Business Transformation. The project will be completed in two phases. The deliverables for each phase are outlined below. Formatting Final Deliverables I do not specify the template for your report (formatting, style, reference styles), nor guidelines on how to write it. There will be no cookie-cutter templates provided, as this is analogous to a consulting engagement. I want you to exercise autonomous judgment, taking into consideration that you are producing a high-quality consulting report that will guide the senior leadership of a company in formulating and implementing a critically important strategy for the company. Timeline and Deliverables The following list should guide the timing of your progress on the project. Marked items* are discussed below. Please consult the Syllabus for specific dates. Module Description Grading Criteria/Weight Due Date Module 4 Strategy Project Phase 1 100 points possible. 20% of the final grade. Due: Sunday, End of Module 4, 11:59 pm ET Module 7 Phase 2 100 points possible. 20% of the final grade. Due: Sunday, End of Module 7, 11:59 pm ET Phase 1: Analysis of Digital Disruption at Industry Level You are going to choose a company within an industry and formulate a strategy for the digital transformation of this company. A list of industries and typical companies within those industries is shown in Table 1. You can choose a specific industry from this table and a company within the industry [from the list of companies in column 3]. Goal of Phase 1 In this phase, you will analyze the industry in which your (chosen) company operates. You are required to identify the company for which you will prepare a Digital Business Transformation plan. Your analysis will explain the possible ways in which there could be digital disruption in this industry. In the example of the jet engine maker, the industry (business vertical) would consist of other jet engine makers, suppliers, buyers, collaborators, and other value chain partners. Deliverables for Phase 1 Your report will consist of the following: 1. Selection of an industry from the Appendix. 2. Selection of a company from within this industry from Appendix. You will not be able to change this later. 3. Digital Disruption: Explain how digital disruption could happen in this industry. a. How will digital disruption take place in this industry? b. Who are the digital disruptors? c. What are the sources of digital disruption? d. Do the digital disruptors come in with a business model very different from the prevailing business models in the industry? If so, describe that business model. e. Do the digital disruptors come in with a core value proposition that is very different from the prevailing core value proposition in this industry? If so, describe the different core value proposition. 4. Technology as an enabler of digital disruption. a. Identify technology platforms that enable the disruption above. b. Explain how these technology platforms enable these digital disruptors to disrupt the industry. Note: I am not asking you to provide the technical details of how the platforms work. 5. Appendices with a description of data sources and analysis that support the main points of the report (i.e., your “evidence”); include important graphs/tables here, and include important supporting quotes from interviews 6. References Elect a group member to submit this deliverable on Canvas. There are no restrictions on the document length. Due Date: Sunday, End of Module 4 ? Rubric – Phase 1 Criteria Points Did you clearly identify how digital disruption will take place in this industry? 10 Did you clearly identify who the digital disruptors are (who could be the potential digital disruptors)? 10 Did you clearly explain the business model of the digital disruptor (or a potential digital disruptor)? 10 Did you identify the key differences between the business model of the digital disruptor and the prevailing model of the industry 10 Did you clearly explain the core value proposition of the digital disruptor? 10 Did you identify the key differences between the core value proposition of the digital disruptor and the prevailing core value proposition of the industry? 15 Did you clearly identify all the significant technology platforms that enable Digital Disruption and the Digital Disruptors? 5 Did you clearly explain the different ways in which these technology platforms enabled these digital disruptions to take place? OR Did you explain how the technological platforms enabled the changed core value proposition and/or changed business models of the digital disruptors? 15 To what extent are claims supported by cited sources of information and/or research 15 Total Phase 1 100 Phase 2: Digital Business Transformation In this phase you will describe the strategy that ‘the firm’ (the company that you chose to study) will adopt for the Digital Transformation of its business. You will provide an overview of the current value proposition of the firm’s products (or the products that you choose to focus on), the current business model of the firm, and the nature of the competition that it faces. Then you will outline the strategy for how the firm will transform its business by implementing digital technologies. Your report will consist of the following elements. I will refer to your chosen corporation as ‘the firm’ in the sections that follow. Keep in mind that Phase 2 offers multiple opportunities for the effective use of primary data. Think of how you could use primary data for some of the deliverables in this phase. Deliverables for Phase 2 The strategy that you outline in Phase 2 should be consistent with your analysis in Phase 1. This deliverable consists of the set of key recommendations that you are making to the senior leadership of your client. It should be of a quality expected from a top-tier consulting firm. Your report in Phase 2 will consist of the following: 1. Describe the current value proposition of the firm [you may focus on a few key products]. 2. The current business model of the firm. 3. The nature of competition that the firm faces (e.g., competitors, substitutes). 4. Describe the threat of Digital Disruption that this company faces. 5. The Digital Business Transformation strategy: Explain how the firm will achieve a. Digital Business Transformation by addressing the points below. b. Explain the changed value proposition of the firm [or a few key products that you identified]. c. Explain the changed business model. 6. Competition and Digital Disruption: Explain how digital disruption will help the firm against its competitors by addressing the following questions: a. How does the firm’s changed value proposition and/or changed business model help it against competition? b. Can your firm’s Digital Business Transformation strategy be mimicked? c. Can you draw on frameworks and ideas learned in this course to provide some ways to defend your company’s DBT strategy from being mimicked? 7. Key Indicators: If you present your strategy to the senior leadership of the firm, they will need to know what factors to monitor and track to assess their progress. You will need to include the Key Indicators that senior managers can track – such as market share, production adoption, and margins. You need to explain clearly why these Key Process Indicators (KPIs) matter. a. What are the Critical Success Factors (CSFs) that will have a significant impact on your strategy? Why? (Be specific; do not write about ‘vision / mission / energetic support of senior leadership, etc.; these are not specific to your digital transformation strategy.) b. Key Process Indicators: What are the KPIs that senior leadership should track – if they adopt your strategy – to monitor the progress of the firm? (Again, be specific; choose KPIs that are specific to your strategy.) 8. Barriers to your strategy’s success: Identify some of the key barriers to the successful implementation of your Digital Business Transformation strategy. 9. Appendices with the description of data sources and analysis that support the main points of the report (i.e., your “evidence”); Include important graphs/tables here; include important supporting quotes from interviews. 10. 10. References Elect a group member to submit this deliverable on Canvas. There are no restrictions to document length. Due Date: Sunday, End of Module 7. Rubric - Phase 2 Criteria Points 1. Did you clearly describe the current value proposition of the firm? OR Did you clearly explain the current value proposition of the products that you chose to focus on (if not the whole firm)? 5 2. Did you clearly explain the current business model of the firm? OR Did you clearly describe the nature of competition that the firm faces? 10 3. Did you clearly explain the nature and extent of the threat of Digital Disruption that this company faces? 10 4. Did you fully explain the changed value proposition of the firm [or a few key products that you identified] 10 5. Did you fully explain the changed business model of the firm? 10 6. Did you clearly explain how the firm’s changed value proposition and/or changed business model help it against competition? 5 7. Did you analyze the extent to which your firm’s Digital Business Transformation strategy can be mimicked? 10 8. Did you apply the frameworks and ideas learned in this course to illustrate some ways by which your company can defend its DBT strategy from being mimicked? 10 9. Did you identify the Critical Success Factors (CSFs) that will have a significant impact on your strategy and provide specific reasons in support of your position? 5 10. Did you identify the Key Process Indicators that the senior leadership should track to monitor the extent of success in implementing your strategy? 5 11. Did you identify the principal barriers to your strategy’s success and identify some of the key barriers to the successful implementation of your Digital Business Transformation strategy? 10 12. What extent are claims supported by cited sources of information and/or research? 10 TOTAL 100 Appendix: List of Industries and Corporations I have chosen a set of seven industries and several corporations within each industry. For the some industries, I have combined corporations that are related – such as Telecom, Telecom Equipment & Network Equipment. In other cases, I have combined industries that face very similar technological forces that shape their outcomes – examples are Financial Services and Insurance, and Media and Entertainment. Within industries, I have tried to give some flavor of international businesses and emerging markets and geographies. Where possible I have added a few corporations from outside of the US. I have put together industries and corporations within industries that are facing significant levels of digital disruption. I have left out some obvious choices of corporations that are disruptors in their markets, such as GE, Amazon, AirBnB, Tesla, etc. Table 1 Industries Corporations Financial Services & Insurance Citicorp, Bank of America, Lincoln Financial Group, HSBC, J P Morgan Chase, Progressive Insurance, American Express Retailing Wal-Mart, The Home Depot, Costco, Best Buy, Lowe's, Tesco PLC, Whole Foods, Carrefour SA Media & Entertainment Comcast, Time Warner, Twenty-First Century Fox, Inc., Walt Disney, The British Broadcasting Corporation (BBC), NYT (or WSJ or FT). Industrial Goods, Engineering & Construction Caterpillar Inc., Deere & Company (John Deere), ASEA Brown Boveri (ABB), Hitachi Construction Machinery Co Ltd, Fluor Corporation, Larsen & Toubro. Telecom, Telecom Equipment & Network Equipment Verizon Communications Inc., AT&T, Inc., China Mobile Ltd., Vodafone Group PLC, Huawei Technologies, Ericsson (Telefonaktiebolaget L. M. Ericsson). Auto Companies Toyota, General Motors (GM), Volkswagen, Ford, BMW Group, Hyundai, SAIC Motor. Medical Device Makers Siemens AG, Medtronic Inc., Johnson & Johnson, Baxter International, Philips Healthcare, Cardinal Health.