Academic journal article IUP Journal of Business Strategy

How Information Systems Enable Digital Transformation: A Focus on Business Models and Value Co-Production

Academic journal article IUP Journal of Business Strategy

How Information Systems Enable Digital Transformation: A Focus on Business Models and Value Co-Production

Article excerpt

Introduction

The purpose of the study is to analyze the evolution of business models that accompany the transformation of the dominant industry value-chain model in a range of economic sectors. The increasingly intensive use of information technology has had a significant impact, and has made possible new forms of value co-production. These new forms of cooperation have important implications for Information Systems (IS) and the role of information technology.

In the study, the authors recall the main advances in the scientific literature on this topic. Literature review focuses on the concepts of change in industry value chains, new business models and value co-production, as well as the adaptation of IS to these changes. The authors also present the main results of two case studieswith Rexel and Salesforce that were conducted in order to test these theories.

The globalization of business and the development of services associated with products are transforming the role of distributors, and are generating new forms of co-production of value; these changes have highlighted important issues for IS in distribution businesses within the electricity sector and constitute the basis for the REXEL case.

The development of applications such as Software as a Service (SaaS) and the emergence of exchange platforms (Platform as a Service) have made possible the creation of ecosystems with many avenues for innovation and co-production of value. The paper illustrates these changes by studying one company in particular, Salesforce.com.

From a methodological point of view, first the authors conducted a review of the scientific literature. The main challenges in our multifaceted study were to identify and select-from a variety of fields including strategy, marketing, supply chain management, innovation, etc., and of course IS-sources that seemed most likely to shed light on the subject of our study. Our hope is that this review of the literature, necessarily imperfect and incomplete as it is, helps to "clear the field" and will contribute to the subsequent efforts of the research community.

For the Rexel case study, the authors analyzed a series of publications about the company and explored the Internet, which gave us access to articles and videos referenced in the case. We conducted a series of semi-structured interviews with the Group chief information officer, who was our entry point into the company, as well as the director of the Supply Chain, the director of Strategic Planning and the director of Marketing and Customer Relations and vice president of the South American zone. The interviews were recorded and transcribed and the subject matter they provided for analysis came from verbatim comments.

For the Salesforce.com case study, we analyzed a number of professional and academic publications dealing with the company and conducted interviews with the director of Marketing, France, and with 13 partner companies of Salesforce.com in their AppExchange. We also used professional sources such as Forrester Research to validate certain market assumptions.

The remainder of this paper is organized as follows: first, Section 1 discusses the evolution of business models in the digital economy, and then Section 2 focuses on the contribution of IS to this changes. Section 3 then presents the main findings of our two case studies, with Rexel brick and mortar case on the one hand and Salesforce Cloud offerings on the other. Finally, Section 4 shows our conclusions as exemplified in our cases: the digital economy, enabled by IS, rebuilds the value chains in sectors, with an emphasis on actors who can provide additional services; business models evolve with a focus on accessing the customer directly and creating a network of collaborations with customers and partners to build an enhanced value proposition.

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