Digital Business Models That Will Shape Europe's Near Future
July 8, 2019
Society is always changing, technology develops at a fast pace, and the economy has to keep up. Traditionally, most business models had similar value propositions and were considerably stable. However, digital business models are subjected to continuous change and increasing competition; as our lifestyle evolves, so must modern businesses. New companies will need to take into consideration the influence of trends, and established businesses will have to look towards the future. For these companies switching to a digital business model might be the best answer. Find out more about existing models and our suggestions on how to improve your current strategies in the future.
Technology-oriented strategies have already proven to be successful and capable of taking digital businesses into the future.
- E-commerce is an established model since shopping online has become as common as going to the shop: according to the latest E-commerce Foundation report, online sales are forecasted at 621 billion euros by the end of 2019, a 13% growth compared to the previous year. Nonetheless, there is always room for improvement to expand the reach of your company, using drones to deliver urgent packages is the latest example.
- Another popular digital strategy is the freemium businessmodel, which offers services that are available to everybody: by providing originally free services, it creates an extensive and loyal customer base that can easily access paid services whenever they need. This system can be useful to companies that are facing strong competition but want to make their product known to the public.
- The open-source business model is another instance where software is distributed freely; there is no need to pay for a licence, but then clients can consult with developers and pay them to customise the product to fit their requirements. The result is a personalised product tailor-made to the customer’s needs.
In the past, companies developed depending on the socio-economic situation and the technology available at the time, and they didn’t change much afterwards. Digital business models must adapt to the challenges brought by our modern economy and lifestyle, facing a myriad of new issues:
- Making sure transactions and information are secure
- Managing the workflow
- Having enough staff to look after servers
- Data storage
Here are our recommendations every company should consider adding to their business development plan to face these new challenges.
Online security is a growing concern, since digital transformation and the development of technologies like IoT or app programming interfaces offer a large attack surface, one that continues to increase. In order to overcome this hurdle, digital business models should consider incorporating automation or AI solutions. This would streamline and standardise IT processes to ensure security, remove human error and lower fixed costs. This measure would free IT staff who could focus on other priorities.
Future business models will mean more than just digital transformation, they will need interoperability to go a step beyond and expand by connecting several interfaces without restrictions. This is where cloud computing comes in: along with its advantages regarding storage, cost, speed or flexibility, these platforms enable companies to scale up and innovate in real time, the perfect conditions for a business to grow. Moreover, computing services would be kept online securely and accessible on demand, which would considerably improve workflow management: definitely a tool for the future.
Incorporating technology to optimise a business is only a part of it, if companies are to thrive in the future, they need to be prepared to change their digital business models and adapt to any new situation. Reinventing themselves and rethinking their strategies will be the way to stay ahead of the competition. To find out more about digital business models at the EIT Digital Conference in Brussels this September, sign up for more information and don’t get left behind!