How A Legacy, Digitally Enhanced Business & Digital Business Differ….
In interviews with a spectrum of enterprises, we see at least three types of businesses from a standpoint of the role and use of IT and the evolving Digital Technologies:
Legacy Business (LB):
An established business model with proven – but not permanent – markets, customers, staff, products, brand, distribution, process, skills, talents, governance, financials, culture, incentives, politics, competitors, partners, alliances, systems, technologies and behavior. Classical Information Technology (IT) has been and is being used to augment, make more efficient or optimize existing business processes, often around accepted industry accepted “Best Practices”. Much of the IT deployment has been around back office and supply chain with a front-end web presence pasted on.
Digital Business (DB):
Started from scratch based on a concept of what today’s Digital Technologies can do. It is often targeted at the opportunities between the cracks left by legacy businesses or markets. From the get-go, the firm is designed with full leverage of IT, permitting hyper-productivity of staff, broader and focused market reach, far greater efficiency and agility. They are unencumbered by legacies. Their entire staff is made up of “digital natives”. Profitability is something that will magically appear down the road as the firm thrives from Other People’s Money (OPM) Cloud based applications for accounting, human resources and CRM eliminate the need for entire departments. Small teams can create and rapidly evolve the processes, products, services, incentives and culture to disrupt and occasionally win big.
Digitally Enhanced Business (DEB):
A Legacy Business that is prudently converting its existing business model to take advantage of what today’s and evolving classical IT and Digital Technologies can enable as a new business model. Over time, the markets, customers, staff, products, brand, distribution, process, governance, financials, partners, alliances, culture, incentives and behavior will transition to enable the new business models.