With the advancement of automation and digitalization，The economic landscape continues to change，Despite its rich resources，But one industry after another, incumbent companies have lost to startups。

After traditional retailers enter the e-commerce field，Still unable to compete with Amazon, a born digital company。The sales of electric vehicles by famous car companies in history have always lagged behind Tesla。Even though the Taxi Association has invested huge amounts of money in technology，Still unable to resist Uber’s offensive。

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Scholars such as Clayton Christensen have already given some answers。All company internal systems (including metrics、Resource configuration process、Incentives、Recruitment and promotion measures and investment strategies) are all designed to support the existing business model。These systems are generally mature，Extremely difficult to change，And often at odds with the needs of digital business models。

The way value is created in the digital economy also brings another challenge.One of the most successful business models in the 21st century，Many models are built based on the ability to intervene in customers’ lives，Using software that generates information about customer habits and usage patterns。These digital relationships take customer intimacy to a new level，Encourage companies to launch customized products and services，And improve customer service methods。

But most companies that have been established for a long time are limited by the existing value chain，It is difficult to seize new opportunities，Expand customer relationships。Them and suppliers、Competitor、Establish long-term and stable relationships with partners and customers，It’s hard to break these networks。But efforts in this area play a vital role in the long-term survival of the company。

Software transforms customer relationships

Uber’s success has nothing to do with big data，It uses innovative methods to obtain small data directly from customers。Company aware，It doesn’t have to collect and analyze massive amounts of data on taxi usage；It only needs to capture the most useful user information at the right time - the time and location where potential passengers need to use the car。The company still knows，You can determine the connection status with the customer’s mobile phone。By connecting with the customer’s mobile phone，Uber simplifies the taxi rider experience、Convenience。

The most iconic companies in current society generally have the same growth trajectory: the basis of success is the 188bet online sports betting ability to deeply intervene in customers' lives higher than their competitors (or 20 years earlier than other companies)。Companies in the IoT device space are the most obvious examples。Tesla installs sensors and software in cars，To understand customers’ driving habits，And provide them with autonomous driving services。“Smart” thermostat sold by Nest、Smoke detectors and cameras can monitor the user’s home，Improve home energy efficiency and safety。GE conducts real-time monitoring of equipment at customer work sites，Data collected through built-in software，Provide customers with corresponding service updates and adjust maintenance schedule。

But not only IoT products can help companies expand customer relationships。What Netflix does is: Install the app to collect all information - from the customer's geographical location to the time the viewer stopped watching the movie，Then the company can gain a deep understanding of user preferences。The streaming giant uses the data obtained，Recommend videos to users at the right time，Also find (and even create) content your users love。

Ability to maintain close relationships with customers，Created huge opportunities，Allows companies to capture market data、Offer new products and services、Form an indestructible network effect and feedback mechanism。But transforming customer relationships is not simple，Often it is necessary to change business models up and down the value chain。

Disruption Partnership

Most business strategists don’t understand，Software alone cannot transform business models。Each of the above companies is not only innovative in software applications；They have also changed their product distribution and service models，Even including raw material procurement methods。

Let’s look at the Nest example again.

Co-founder Tony Fadell once said，Nest’s initial differentiation initiative was to market its first product, the learning thermostat, directly to homeowners who installed the product themselves，Bypassing traditional distribution and installation channels – specialty contractors。

What’s so important about this？The team at Nest knows，In the current market，Only a small percentage of thermostats are programmed to take into account the time of day、Adjusting the room temperature for different days of the week and different seasons - such a complicated procedure。To fulfill its promise - launch a thermostat that can automatically adjust，Nest must let the thermostat “know” the user’s preferred temperature and schedule。And if you want this software to achieve the best results，Teams are required to create user profiles，Make sure the thermostat is connected to the house’s wireless network，Also confirm that the Nest mobile App is installed on the user’s phone。

A different approach to selling and installing products brings new marketing directions。Nest chooses to bypass contractors in the supply chain，Develop products that are easy for users to use and gain value。The company’s decision to abandon traditional distribution channels forced the team to develop a strong retail strategy，And build a consumer-facing brand。However，Professional installers will be put at a disadvantage，The existing ecosystem is also challenged。

Nest example display，When a company uses digital technology to build new customer relationships，Software development is only part of the process，Because companies will try to change customer behavior at multiple points in the customer journey，Sometimes also because some data used in the value transfer process are intended to replace the original collaborator。No matter what the situation，Both business model and channel strategy must change at the same time，This requires companies to make difficult decisions，Breaking long-standing partnership。

The need for interdependence

In some cases，The shift from physical to digital has a huge impact on partnerships—bigger than the partners in the Nest example。

To know the specific reasons，We must digress a little further。Clayton Christensen by Alfred D. Chandler，When discovering major innovations in the market，The value chain will expand，And there is often a need for reorganization——This is not just because business models are constantly changing，Also because innovative product designs are still emerging in endlessly。

At the beginning of the product life cycle，The inventor will not realize it deeply，Optimization of components of innovative products，We must take into account the connections between different elements。For example, the first automobile manufacturer must strictly control research、Design and production link。Changes to any one part often mean that the entire vehicle will undergo huge changes。Therefore，The premise of product development is，Build an interdependent partnership network。‍

As the standard design architecture gradually takes shape，Company learns more about how different elements work together，For example, improving the battery configuration of the car transmission，Or strengthen the connection between the battery and the electronic system。Next，The company can modularize different elements and subsystems。Now traditional automakers have the resources and capabilities to innovate at the subsystem level；Next generation products can be easily connected to most automotive platforms。Generally only in mature technologies and industries，This broad space for multiple partner activities only occurs。

However，The more eye-catching innovation，The more interdependence is needed。We discovered during the process of exploring the field of driverless electric vehicles，Interdependence, akin to the concept of “vertical integration,” is once again in focus。Tesla Motors has the most interdependent architecture in the entire market，Manufacturers control every component，Including hardware、Software for managing complex electronic systems，And the algorithms and sensors required for autonomous driving functions。Tesla also demonstrates strong control in other areas: it has its own distribution channels、Service and Charging Network。

Comprehensive control mode not only helps Tesla solve fast charging problems，It also resolved the company’s long-distance driverless 188bet online sports betting electric vehicle production process，All challenges encountered。(But this model also has disadvantages，For example, causing operational complexity，May slow down the company’s expansion。）

Building a new ecosystem

Suppose we agree with the first two arguments of this article:

•Benefit from advances in computing and communications，Company can further expand customer relationships；

•Companies need to create a highly interdependent structure for innovation，Only in order to make full use of digital technology。

•The conclusion is clear: companies from all walks of life must reform their original value chains。Such reforms may have adverse effects on long-term partners。mentioned above，Netflix monitors everything its customers do，Use the collected data to support your decision-making，From content recommendation to content collection，Numerous。But to complete this process effectively，Netflix needs new ecosystem partners，And the goals of these partners are not in conflict。New partners include: trying to take advantage of the long tail effect，Content owner who sells content to multiple niche media outlets，For example BBC；Distributor，Such as Amazon Web Services and platform partners that can host application software，Like Apple and Google。

•Sometimes existing partners are eager to transform themselves，Sometimes they improve their financial situation，Strive to adjust yourself to meet the company’s new needs。But they often face business models that are difficult to shake。We sincerely hope that our partners will keep up with the pace of reform，It will only endanger the company's own long-term viability。Changing business models is not easy，But in the past year，We’ve observed some of the best practices used by companies that have successfully changed their business models。

1. Determine what you must do

•We have heard executives emphasize this many times，To deliver long-term value to customers，You must understand what you need to do。Sane people will discuss the development trend of the world in the short term (or even the medium term)。Most sensible executives are likely to be aware of the megatrends that will impact their industries for a long time to come，Agree。By analyzing these trends，Can predict customers’ future consumption patterns。Determining a company’s next move is no easy task，But if we can provide guidance on the long-term development trend of this industry，And a consensus on the likely roles of companies and partners in this trend，It is possible to start reform，Making full use of digital technology。

•General Electric is one of the outstanding examples of digital transformation。General Electric executives met in 2008 to discuss the company’s long-term future prospects，It is agreed that the machinery industry will soon be impacted by the Internet。They still agree，Once industrial equipment is connected，Software is likely to become the most differentiated part of mechanical products，The same situation happened in the personal computer industry。

•Although the specific time point of the change has yet to be confirmed，But note the inevitable reform 188bet app download trend of industrial companies，Lighted up a guiding light for General Electric。After determining the direction，Companies are able to clarify expectations for employees and partners，Even try to guide customers。For example, General Electric specifies，It is necessary to establish a unified data platform that can integrate the company's industrial equipment。With this platform，The company will be able to provide software directly to customers in the future，Instead of relying on system integrators to provide software one by one。Explaining the vision also helps company executives continually question themselves: Are current decisions being made in the long-term interests of the organization？

•Business leaders around the world are grappling with the pressures of digital transformation，Therefore it becomes extremely important to determine the future direction。If you know what direction you must move in the future，Easily decide when to disrupt a partner’s existing business model。

2. Develop more accurate indicators

•Many world-class companies，Using the same metrics for decades to measure success。Whether it is evaluating internal employees，Still an external partner，These indicators are too focused on profitability or total annual revenue。This indicator that focuses on output quantity is very suitable for mature enterprises，But it is inappropriate in the context of digital innovation。The key step to achieve digital transformation is，Change performance evaluation indicators。New indicators should emphasize the company’s current shortcomings，And support risk-taking and experimentation。

•Take Ford as an example。Facing the recurring question: the risks automakers face in the field of driverless cars。Ford CEO Mark Fields admitted，This topic is also a key consideration for Ford。Executives want to be prepared，Embrace the new service and distribution models brought about by driverless cars (these models may disrupt the relationship network of existing partners)。Ford no longer uses annual sales as the main basis for evaluating executives；Company now also considers mileage on Ford vehicles。Whether Ford sells more new cars (traditional measure of performance)，It still extends the service life of existing vehicles (this indicator mainly benefits car owners，Not other partners in the ecosystem)，Executives must work hard to achieve goals。

•Vigorous reform of indicators can support the implementation of the company’s digital strategy，Plays a strengthening and consolidating role。For example, Kaiser Permanente doesn’t pay much attention to its own network now，Common metrics like hospital and physician utilization；Opposite，It is committed to extending the "healthy years" of patients to the greatest extent。The group now emphasizes the new indicator of "always maintaining health"，Therefore, partnerships with healthcare and technology companies will be more valued，Recruitment and optimal deployment of non-medical personnel。

3. Create business opportunities for partners

•Some partners in your ecosystem will inevitably be affected。HBO may bypass one cable company's set-top box，188bet app Provide movie viewing apps directly to consumers。Chanel may want to build a digital store，This threatens traditional retail partners。Software provided by GE or Siemens may be provided directly with IBM、Accenture and Parametric Technologies Corporation (PTC) products compete。But Patrick Collison, CEO of online payment company Stripe, thinks，Digitalization is not a zero-sum game。Stripe’s cooperation with traditional financial institutions has been very successful，Why？Because the company reduces friction between both parties on digital payment solutions；On the one hand, the transaction volume has been greatly increased through cooperative institutions，On the other hand, it also gained a small market share。

The key is，Companies should try their best to create opportunities for themselves and their partners。As the “cake” of the global economy gets bigger and bigger，Companies can deliver more value to partners in the value chain，Although the share of each transfer will be reduced。So although Accenture or AT Kearney (A.T. Kearney) Possibly after GE increases standard software supply quantities，Loss of some system integration revenue，But GE attaches great importance to communication with them，Saying that all parties can benefit economically from the new business model。GE Digital CTO Harel Kodesh holds regular meetings with stakeholders，Exchange company’s current focus，And where you want partners like Accenture and AT Kearney to develop applications。

Determine future direction，Change performance metrics and create opportunities for partners—do these 3 things，Traditional companies can be easily reformed，Implementing new digital business models。But we are not implying，The transformation will be smooth and smooth。

Companies will definitely struggle when deciding to abandon original ecosystem members。Some partners will inevitably become your competitors，Other partners may be eliminated。But if company leaders realize，Digitalization requires reforms not only in the software field - but often outside the company's direct control，Then the opportunity is still huge。

*Source of this article: WeChat public account "Harvard Business Review" (ID: hbrchinese)，Author: Maxwell Wessel Aaron Levie Robert Siegel，Original title: "Digital transformation of traditional giants，Just changing the business model is not enough！》

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