- Business Model Innovation
- Learning Module
The module – in brief
The Pre-analysis of the Company’s Situation is the natural, second step in the development of a new digital business model once you have completed your Pre-analysis of the Surrounding World. The purpose of the company’s internal situation is to give you an overview of your digital maturity as well as your strengths and weaknesses in relation to your surroundings; hence, you can utilise your strengths to seize the opportunities and reduce the threats from the surrounding world. The Pre-analysis of the Company’s Situation is carried out by first assessing your digital maturity and then describing and analysing your strengths and weaknesses in relation to the surrounding world. After the Pre-analysis of the Company’s Situation comes the Customer Analysis.
Overall process for the business analysis
Once you have described and analysed your surroundings, the natural, next step is to analyse your internal context in which the new digital business model or service is to be implemented. Knowledge about your internal context makes it possible to estimate the viability of the business model in your company, and combined with the results from Pre-analysis of the Surrounding World, you can analyse your internal strengths and weaknesses in relation to your external environment and set up and prioritise development initiatives to seize opportunities and reduce threats.
The following two tools can help you get an overview of your company’s digital maturity and situation:
- The Digital Maturity Analysis (DMAT) helps you to assess your digital maturity on six parameters: Strategy, Culture, Organisation, Processes, Technology and Customers and Partners. DMAT also provides inspiration for development potentials and thus helps you to translate the analysis results into actions.
- The SWOT analysis is used to describe opportunities and threats in the surrounding world as well as your internal strengths and weaknesses in relation to the surrounding world. In addition, the analysis can inspire you to describe how you can seize opportunities and minimise threats.
Digital Maturity Analysis
Your current digital maturity affects your digital development opportunities, the threats you are perhaps facing and the potential business models you can implement. Being a digital world champion in all aspects or knowing everything yourself is not a must, but it is important to know on which digital parameters you are strong, on which you are weak, and on which you need to collaborate with others.
A tool for assessing and evaluating your digital maturity is the Digital Maturity Assessment Tool, DMAT, which has been developed by Aarhus University and centre director, associate professor, PhD Annabeth Aagaard (2018). The tool measures your digital maturity on six core parameters: Strategy, Culture, Processes, Technology and Customers and Partners.
You can use DMAT as a tool to create an overview and dialogue about digitisation in the following ways:
- to assess your digital maturity across departments or job functions, for example by letting persons from different departments or job functions answer the questions. In this way, you can compare results across the company and discuss on a common basis how and why different persons assess the individual parameters differently, as well as what initiatives you can initiate to improve maturity or focus on specific parameters with low scores.
- to assess your digital maturity internally and externally as a 360-degree analysis by letting core customers or partners respond to DMAT and thus provide their perspectives on and perception of your company’s digital maturity.
- to assess the development and effect of your digital transformation, for example by measuring at the beginning of your digital transformation journey and after ½-1 year, to see how the activities you have initiated affect the digital maturity in the company and the six parameters.
The result of the DMAT is an individual mini–report, which is sent by e-mail immediately after the test has been completed.
“Digital Maturity Assessment Tool” by Annabeth Aagaard (2018)
You can advantageously use DMAT before, during and after the work with developing and implementing the digital business model. This will help you evaluate your digital maturity on an ongoing basis and determine if the initiatives you have taken improve your digital maturity – internally and externally.
Assess the digital maturity of your company by clicking here.
1) Choose whether DMAT is to be carried out internally only, or whether you would like feedback from customers, suppliers or other business partners.
2) Send the DMAT tool link to all participants: www.dbd.au.dk/dmat
On the first page of the test, submit the access credentials provided by your project manager. If you are not already involved in a project, read more about access and collaboration with Aarhus University here.
3) You are then guided through questions related to your company’s Strategy, Culture, Processes, Technology and Customers and Partners.
4) On the last page of the evaluation, please enter the email address to which you would like the report sent, including the analysis results.
5) You will receive the report by email, and it will contain both the overall result, scores on the various parameters and inspiration for development potential based on the results.
6) If you have had several different people carry out the analysis, you will receive a report for each completion, which you can compare across your company.
DMAT has been developed by Centre Director, Associate Professor, PhD, Annabeth Aagaard from Aarhus University and is available on the research centre’s website, Interdisciplinary Centre for Digital Business Development.
- On which of the six parameters does your company score highest and lowest?
- Is this surprising, and if so, why?
- Which of the six parameters do you think are most important for your company to strengthen internally or on which could you collaborate with other business partners?
- In what way do you think you could strengthen your digital maturity internally here and now?
- In what way do you think your company could increase the digital maturity that your customers or business partners experience?
- What exactly could you do in relation to each of the six parameters?
DMAT can be used to evaluate your digital prerequisites before the development of a digital business model, and the analysis will help to point out parameters where you should develop your digital maturity. DMAT can advantageously be used internally and externally together with the SWOT analysis to provide an overview of the company’s surrounding world. Knowledge from DMAT can also be used when you need to plan the implementation of a new business model where DMAT results can contribute by providing an overview of your digital starting point for the implementation.
Your ability to seize opportunities and reduce threats in the surrounding world often depends on your internal strengths and weaknesses. When working with digital business models, it can be an advantage to consider whether you have the necessary skills, whether you have the right mind-set to work with digital technologies, whether you may have any unique data on customers that competitors do not have, etc.
A tool to describe your internal strengths and weaknesses, as well as opportunities and threats in the surrounding world, is the SWOT analysis (Strengths, Weaknesses, Opportunities and Threats). The SWOT analysis can be used in two ways:
- As shown below, the analysis can be used to identify and analyse your company in relation to the surrounding world, examine your market opportunities and threats, and examine your abilities to act on the results of the analysis.
- To put into perspective the results of the other analyses and tools, which you may use, and the ideas for services and business models that you may have outlined.
The SWOT analysis consists of two parts: an internal part and an external part. Strengths and Weaknesses are internal and describe, for example, internal processes, employees, technology, resources etc. Opportunities and Threats are external to the surrounding world and describe competitors, market conditions, technological development etc.
Set aside 1-2 hours for description and analysis.
It will be a great advantage to let different key employees participate in this analysis.
You will need a printout of the SWOT analysis tool and pens for noting input down on the sheet. It can be an advantage to print the sheet in, for example, A2 or A1 size, and use Post-its to note your input regarding the different areas. It is highly recommended to perform the analysis on paper rather than on a computer, as it is much more flexible and makes it easier to stay focused.
1) Determine the topic of the analysis – make it clear to everyone who is to contribute to the analysis.
2) Describe strengths within the company; i.e. what you as a company are good at. Perhaps you have great knowledge of the business area, employ experienced and service-oriented technicians, have easy access to resources, offer a unique product or a unique service, or perhaps you have strong and close collaboration across the company.
3) Then describe weaknesses within the company; i.e. what you as a company are not so good at. Perhaps you have difficulty in attracting employees with the right qualifications, that your website is not user-friendly or that many items are returned.
4) Opportunities in the surrounding world are then described; for example, new legislation which favours you, that robot technology can make production cheaper or that customers are willing to spar and develop together with you.
5) Finally, threats in the surrounding world are described; i.e. what you as a company should be aware of; issues that can affect your company negatively. For example, start-ups which have entered the market, that copy products are produced which are similar to your products, or that new technology undermines your current business model.
6) If the analysis is done just by you as a company, the result is analysed – i.e. the internal strengths and weaknesses and the external opportunities and threats – and a concrete action plan is made which outlines how you can:
- utilise your internal strengths to seize and exploit the external opportunities that the analysis shows,
- utilise your internal strengths to reduce the likelihood and impact of the threats shown by the analysis,
- utilise the external opportunities that the analysis shows to reduce your internal weaknesses,
- utilise your internal strengths and your external opportunities to overcome internal weaknesses that may make threats become a reality.
If the SWOT analysis is used to analyse results from another tool; for example, an outline of a business model, SWOT can be used in order to assess whether the new business model is viable in your company and the world around you.
- To what strengths and weaknesses did the Digital Maturity Assessment point?
- Which initiatives can you take to maximise your strengths and use them to seize opportunities and minimise threats?
- What elements of the SWOT analysis are you able to change or influence? Which ones will you not be able to change or influence?
The SWOT analysis can be used as an independent tool where results can be transferred to Service Design or What You Need to Know about Digital Business Models, and here, it can then help you plan how to optimise opportunities and minimise threats in connection with new services and business models. In addition, the SWOT analysis can be used in order to evaluate and put the results of other tools, your strategy, your services etc. into perspective.
- If your find internal weaknesses regarding digital maturity and digital competencies, it should not be seen as an insurmountable barrier or excuse for not plunging into working with digital business models. On the other hand, it should be seen as a clarification of which areas you need to improve or on which areas you need to collaborate with others.
- Be critical of your own weaknesses and threats. In order to be that, it can be an advantage to use key employees across the company, as well as customers and business partners, to provide you with input to the analysis.
- Use the knowledge you gain to embark on initiatives that improve your position, enable you to seize new opportunities and minimise threats etc.
- Evaluate your business continuously.
The Pre-analysis of the Company’s Situation provides a description and analysis of your company’s digital prerequisites prior to the development of the digital business model. The insight can be used together with the Pre-analysis of Surrounding World in the module Implementation when you are going to describe the internal and external context in which the business model is to be implemented.
The content elements above have been developed through two projects:
‘Digital Business models for the Future’ by Aarhus University, Aarhus School of Marine and Technical Engineering and Danish Technological Institute supported by The Danish Industry Foundation. The material from this project has been adopted in alignment with CC BY-SA 4.0