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G00262735
Digital Businesses Will Compete and Seek
Opportunity in the Span of a Moment
Published: 24 March 2014
Analyst(s): Don Scheibenreif
Business moments will become one of the building blocks of new
businesses as the lines between the physical and digital worlds begin to
blur. In this foundational research, we look at how business moments can
be the lens to spot opportunities in a rapidly changing digital future.
Key Findings
■ Digital business makes it possible for a variety of industries to participate seamlessly in the
same value stream process composed of people, businesses and things. It is beyond IT and
beyond the control of any one company.
■ Business moments are specific transient opportunities that illustrate how people, businesses
and the Internet of Things interact. They represent moments of untapped opportunity and
competition that can rapidly change the dynamics across industries.
■ Exploitation of business moments requires agility and rapid reconfiguration. Technology allows
enterprises to intercept or even create business moments.
Recommendations
IT, business and government leaders:
■ Business moments are speculative situations. Use them to create scenarios and customer
stories to illustrate how your organization could exploit business moments.
■ Integrate business moments into your thinking about customer journeys and associated
processes, even as you digitalize those processes. As "things" become important in ways you
hadn't envisioned, use these moments to help see new connections for your enterprise and
even to create your own business moments.
■ Business moments can be teachable moments. Use them to tell stories and orchestrate
scenarios within and between enterprises that engage business and IT peers in the very
different end-to-end, collaborative thinking and design required for success in digital business.
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Analysis
Imagine this: A passenger car collides with a taxi at a busy intersection in a city. What happens in
the next few seconds or minutes? What should happen?
In today's world, humans will call other humans to obtain the necessary help. In the emerging world
of digital, we see a different series of events unfold: The car not only calls you to see if you can talk,
but also communicates with emergency services, the towing company and the insurance company
simultaneously. It communicates with your smartphone and the sensors on your clothing to assess
your condition and advise the coming ambulance. The phone then notifies your emergency contacts
to let them know the situation. The phone will also query the nearby video cameras to obtain the
evidence for the insurance company. Repair estimates are sent to the phone based on a video
analysis of the accident scene and a damage report from the car itself.
Before, a car crash was a purely human moment. Now, because of technology, it becomes a
business moment, where things are doing lots of the work now so humans don't have to. Moreover,
the services and help are provided more quickly, with higher quality and a lower cost.
This scenario begs the question, "Who or what — what device or system — is going to make that
happen?" A major force is emerging in business that will eventually overtake all business and all
industries. This is the rise of digital business.
Digital Business Will Be the Next Phase in the Evolution of Business
Digital business is the creation of new business designs by blurring the digital and physical worlds.
Digital business will be ushering in an unprecedented convergence of people, business and things,
creating new revenue opportunities in its wake (see "Agenda Overview for Digital Business, 2014").
Digital business will break down traditional barriers between industry segments, creating completely
new value chains and new business opportunities that may not be filled by incumbent players. It will
also challenge existing industry boundaries and challenge the dominance of leading players in an
industry and cause them to rethink the businesses they are in.
Most will see digital business as a simple extension of an enterprise technology or an e-business
past. We call this "digitization," or using technology to automate existing processes. However, that
is no longer enough. To compete in a digital world, enterprises must digitalize their models, in which
products, services, markets, channels and processes are transformed through digital technologies.
Gartner believes digital business is the essence of digitalization as it disrupts existing business
models — even those that were born of the Internet and e-business eras. Why? As the presence of
the Internet of Things (such as connected devices, sensors and smart machines) grows, the things'
ability to generate new types of real-time information and to actively participate in an industry's
value stream will also grow (see "Forecast: The Internet of Things, Worldwide, 2013"). Things
provide information streams that, along with big data, can be analyzed to identify business
moments.
We refer to the era defined by the advent of digital business as the "digital industrial revolution." The
"digital industrial economy" is the process by which goods and services are produced and sold that
result from digital business and the digital industrial revolution.
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A digital business focuses on spotting new opportunities to drive revenue, and has the following
attributes:
■ Nearly all physical and virtual assets in the value chain are digitalized. Intelligent things are
incorporated into end-to-end processes.
■ The business creates and is dynamic and responsive to business moments, based on the
current context.
■ Customers or constituents are engaged principally through digital means. Most sales,
delivery and service functions are fully automated. Most human- or analog-based processes are
eliminated.
■ Employee engagement occurs principally through digital means. Team collaboration is
done virtually, in the moment.
■ Operational processes are digitalized. Traditional analog and manual processes are
automated, including both physical and human elements. Many decisions are algorithmic,
based on automated judgment.
■ Things become agents for themselves, for people and for businesses. The added
connectivity, communications and intelligence of things make many of them agents for services
that are today requested and delivered through people.
Digital business is important to enterprises, because it represents a new frontier of growth and
development for industry, as has been seen in past technological revolutions. It has implications for
industry competition, business models, talent and risk. The Nexus of Forces — the convergence of
social, mobile, information and cloud technologies — has set the stage for this digital revolution.
However, like other revolutions before it, digital business may well create a significant downside for
those that do not move quickly enough, and will cause enterprises to rethink what business they are
in.
Business Moments Help Identify Digital Business Opportunities
In 2013, Gartner introduced the concept of the business moment — a transient opportunity that is
exploited dynamically. Moments are very short in duration (even seconds), depending on the nature
of the opportunity (see "Predicts 2014: Business Process Reinvention Is Vital to Digital Business
Transformation"). They are interconnected with an enterprise's business model and business
processes, all of which are being disrupted by digital technologies. They not only are customer
"moments of truth" but also impact the entire organization. We expect these moments to occur
more and more frequently as enterprises migrate from today's world to the digital business world.
In the context of digital business, a business moment is a brief everyday moment in time and the
catalyst that sets in motion a series of events and actions involving a network of people, businesses
and things that spans or crosses multiple industries and multiple ecosystems. These events and
actions unleash a loose set of sequences of observe, orient, decide and act (OODA) loop activities
where many processes are executed by many resources in many different companies. Moreover,
one business moment may trigger or collide with any number of adjacent business moments.
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Imagine other business moments such as:
■ A shipment of parts for a construction site is stopped at the U.S.-Mexico border. The shipping
container detects the delay and communicates with the construction site project management
system and the project manager, and makes recommendations on what needs to be done to
keep the project on schedule.
■ A smart house detects when a room has to be repainted and collaborates with the homeowner
and the local retailer to identify, select and obtain the necessary supplies and services to get
the room repainted. The retailer's system then solicits bids from painters on behalf of the
consumer. Even the laundry machine chimes in when detergent is running low.
■ A car slides off an icy street and knocks downs a utility pole. Smart switches on the electric
distribution network communicate with one another and isolate the network fault. The nearest
available crew with suitable repair equipment is redirected to the fault, while customers and
public safety agencies are notified of predicted restoration times.
Business moments are important, because they will force enterprises to rethink the role they play in
a value stream. Business moments, by their very nature, illustrate a wide variety of possibilities and
players and help companies envision and design new businesses that integrate people, businesses
and things to do things not possible five years ago. The hallmark of a digital business will be the
ability to spot opportunities that might span a matter of seconds. In any business moment,
enterprises and agencies must address the following high-level implications over time as the
exchange between people, businesses and things unfolds:
■ Value — How is value created in this moment? Is there cost optimization due to automation?
Should the moment be owned by a single owner or by an ecosystem of participant businesses
that will be assembled opportunistically under well-defined roles, responsibilities and ways to
monetize their contributions? What new business models are possible? How does the total cost
of ownership of delivering certain processes change?
■ People — The business moment identifies the people involved and how they are enabled and
impacted as consumers, citizens or employees — whether they are inside the process or
outside. They are not just pawns, but full participants. Are they more engaged in the work or
actions? Are they engaged customers?
■ Business — The business moment identifies the information, products and services from
businesses and government agencies involved and how they are enabled with technology. How
are assets digitalized? A business moment may not be controlled by one industry. There are
also opportunities to create new experiences that can drive engagement and loyalty. However,
there is also a disruptive nature to this moment for the traditional industries and incumbent
players.
■ Things — The things in this moment are participants, not just controllers. They exchange
information with businesses and people in a continuous dance of conscious and autonomous
negotiation. Businesses making things that can be connected to the Internet need to examine
all the possible integration points contained inside the moment and make their things smarter or
at least more talkative. Technical processes that normally were closed and contained within
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operational technology (OT) are now exposed as connected and integrated with the world of
people.
■ Process — What processes are executed, improved or even newly created as a result? With
the business moment as the catalyst, what action is needed next? What sequence of actions
(along that value stream model) will need to happen? Who "owns" or at least does those
actions? What insight is gained from the moment itself that can lead to alternative next actions?
Could the customer experience be even more seamless?
■ Adjacent business moments — What other business moments does this one create? As we
developed this digital business moment, we identified several others that could be connected.
You may identify still many others.
■ Competitive dynamics — Who owns this moment? What other industries could disrupt this
value stream? What new businesses, markets or industries could arise from this moment that
don't yet exist?
■ Security and risk — What are the risks of this moment — to the people, the business and even
the things? What happens to privacy as more of the information of people's lives is exposed?
How do you define the test cases and requirements? How do you test a system like this? What
is the "safety override" for a rogue sensor, or what keeps the sensors from being hacked?
■ Integration — Who will handle the integration and standardization of messages and
interoperability? A digital business moment may contain several levels from communications
integration and semantic integration, to integration of different industries that have not
cooperated before, integration with people and processes, and so on.
■ Technology — What technologies exist, and what standards and applications have yet to be
invented?
■ Talent — What type of talent is needed by retailers, manufacturers and various entities involved
in this moment?
CIOs, IT Leaders and Business Leaders Can Use Business Moments to Highlight
Digital Business Opportunities
Identify business moments that will be critical to your enterprise and to your customers or citizens.
Every industry has them (for examples, see Figure 1). Ask yourself how your enterprise (or your
competitors) will handle these momentary opportunities and challenges in the digital future.
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Figure 1. Possible Business Moments in Your Industry
Elections
Referendums
Payday loans and
microloans
Commodity
spot markets
Reverse-auction
carrier selection
Mass
customization
One-time
insurance
Pop-up
events
Flash sales
Flash mobs
Algorithmic trading
Labor strikes
Real-time
personalization
Natural disasters
Customer moments
of truth
Public
Sector
Consumer
Products
Manufacturing
and Industrial
Financial
Services
Source: Gartner (March 2014)
These moments of opportunity and competition that lead to the gain or loss of a sale, or the
transformation of an industry, can happen in an instant. Use business moments to stimulate
thinking around the possibilities. This research will be part of a series that highlights different digital
business moments across a variety of industries and situations (see "Business Moment: Using a
Paint Purchase to Sell Laundry Detergent"). As more business moments are created, Gartner will be
connecting them, and drawing out patterns and even more questions. In the meantime, you can use
this research in the following ways:
■ Communicate stories that illustrate the potential of digital business and to help build your
leadership networks with like-minded business partners.
■ Integrate business moments into your thinking about customer journeys and associated
processes, even as you digitalize those processes. As things become important in ways you
hadn't envisioned, use these moments to help see new connections for your business.
■ Begin to investigate and create your own business moments. Gartner believes the knowledge
for innovative work like this resides inside organizations. Use this document and forthcoming
examples to make connections and see possibilities for your enterprise.
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■ Business moments educate peers, partners and customers. Use business moments as a
leadership tool. After all, the most effective leaders are educators and inspirers. Tell business
moment stories to inspire.
What Is Digital Business?
Digital business is the creation of new business designs by blurring the digital and physical worlds.
It promises to usher in an unprecedented convergence of people, business and things that disrupts
existing business models and creates new revenue opportunities in its wake. By 2020, more than 7
billion people and businesses, and at least 35 billion devices, will be connected to the Internet. With
people, business and things communicating, transacting and even negotiating with one another, a
new world comes into being — the world of digital business (see Figure 2).
Figure 2. Digital Business
Source: Gartner (March 2014)
Gartner Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Agenda Overview for Digital Business, 2014"
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"Business Moment: Using a Paint Purchase to Sell Laundry Detergent"
"Digital Marketing, Internet of Things and 3D Printing Are Digital-Business-Driven Disruptions for
Supply Chains"
"What the Board of Directors Needs to Know About Digital Business"
"A First Step to Determine Whether Your Enterprise Even Needs a Digital Business Strategy Now"
"Digital Business Demands Leadership Networks"
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