Digital Transformation in business is no longer a thing of the future, it is here and here to stay, you can either embrace it as a business owner and a professional or watch other firms and individuals accepting it go ahead of you in all areas.
Digital Transformation is causing a paradigm shift in the area of business thoughts, giving rise to new business models and strategies that seemed to be impossible a few years ago. An example of this is the creation and recreation of digital business models.
Digital business models are models that leverage digital technology to improve all aspects of organizational operations. These models cover new organizational structures, business processes and customer offerings, finding ways of quickly modifying them over time as circumstances change.
Let us discuss some of the recent digital business models that firms are making use of presently;
Free model (Ad-supported model and the Hidden revenue generation model)
This is the type of model facebook, google, twitter and other free platforms use. It proposes a free experience to the user while getting revenue from adverts shown to the users. “Businesses will always advertise, why not give them a platform to do that”. Google and Facebook are continuously working so hard to create a better user and advertiser’s experience.
This works hand in hand because the better the experience of users, the longer the time they spend on the platform, and the better it is to capture data for advertisers to get their desired results.
Open source business model
This is a type of business model where access to services and products are free, with a community of contributors.
A good example of this type of model is what Wikipedia uses. Wikipedia took over from encyclopedia and other books making their services free, fast and easily accessible through the internet.
As the name implies, this model is based on a periodic payment, “subscription” for a particular service or product. An example is Netflix.
This model creates a loyal user base, a continuous stream of predictable revenues, and a more predictable sales pipeline.
The on-demand model enables people to enjoy services and products at their own pace and time, that means users can get any product or service at any scale and at any interval.
This model creates the possibility of getting a service free of charge, and then the user gets charged later if he/she wants to be able to use it subsequently after a particular period of time or if he/she wants to add extra features.
MailChimp is a good organization to mention for this business model.
Peer-to-peer/two-sided marketplace Model
An example of an organization that does peer-to-peer or two-sided marketplace is Uber, Uber had made the two-sided marketplace possible, removing the power of the so-called third parties that are always ready to take all the profit.
Users and suppliers are now given the opportunity to connect easily with little commission on the side for the platform of communication between them.
This is one of the oldest digital business model, which means selling services and products online, a lot of business models are riding on the back of this business model, even though it has been taken for granted, it is still one of the most used digital business models.
All these business models show the fact that digital transformation is here to stay, joining the bandwagon is not the question right now, keeping up with the pace of the change it is bringing is what we need to focus on.
Have you noticed any other digital business model? You can talk about it in the comment box
This article was written by Alade Bamise (Online Grandpa) a Digital Transformation Strategist.