Acquiring a new competitive advantage in order to prevail in the age of digital revolution

Masato Miyamaru

The rapid advancement of digital technologies has led to the expansion of a digitally connected world. Shared digital values thereby created have ushered in an age of digital revolution, which is transforming human activities and work. In order to acquire a new competitive advantage and to prevail in the age of digital revolution, Masato Miyamaru, ABeam Consulting Strategy Business Unit Leader, says that companies must accelerate their use of digital values to resolve the jobs of their customers, while also enhancing their ability to reconstruct the value they provide to their customers.

Masato Miyamaru

Executive Officer, Principal
Strategy Business Unit Leader

How should companies set goals for engaging in digital transformation?

Google, Amazon, Facebook, Uber Technologies and other game changers continue to emerge, using digital values created through digitization. These tech leaders, are redefining both business models and the industries themselves. In the age of the digital revolution, existing players often find their own business are disrupted. While it is a period ofgreat innovation and excitement, it is also an age of unprecedented competition for the companies involved.

“Digital values” can be defined as the “values that are created by connecting digitally”.
Examples of digital values include the values generated when: (1) the cyber and physical worlds become digitally connected; (2) digitally connected data is stored on the web,leading to the realization of high-level recognition,predictions and execution; and (3) not only companies are digitally connected to each other but also when companies become digitally connected to individuals.

As a result, following of the rapid progress of digital technologies, we have seen a dramatic increase in the number of Japanese company executives wishing to leverage the effects of digitization to increase their competitive advantages. Others seek to realize digital transformations. When undertaking such projects, our first priority is to share the “goals” of engaging in a digital transformation with our customers, and only then do we strive to create value together.

Let me give you an example. Consider a company that aims to carry out a digital transformation in order to maintain and strengthen its existing competitive advantages.

In this case, the promotion of digitization would no doubt lead to prioritizing major improvements, not only in the company’s internal productivity and efficiency, but also in enhancements to existing values. As I mentioned earlier, however, companies must remember that in the age of the digital revolution, their existing competitive advantages are constantly under threat of being wiped out by digital disruption. No matter how ably they refine this advantage, there is no way of knowing when or where destructive innovation will come from.

How, then, should companies establish their goals for digital transformation? At ABeam Consulting, we propose that the goal of digital transformation is “to acquire a new competitive advantage in order to prevail in the age of digital revolution”. By using digital values as a means to achieve transformation, companies can redefine the values they provide to their customers. And this process, I believe, is the essence of the digital transformation to which companies should aspire.

Using ecosystems that accelerate digital transformation in order to reconstruct value propositions and acquire a new competitive advantage

In order to prevail in the age of the digital revolutionand acquire a new competitive advantage, how shouldcompanies engage in digital transformations?

As part of our Connected Enterprises concept, we offer ABeam Ecosystem, which enables companies to work together to co-create digitally connected values. By providing our own business innovation platform, we aim to roll out a digital transformation ecosystem that repeatedly creates new digital values for our digitally connected customers. Expanding this platform for co-creation allows the speed of value creation to be accelerated drastically, and enables continual efforts toward digital transformation that are not limited by our customers’management resources or volume of experience.

At the same time, while using ABeam Ecosystem to support our customers’ digital transformations, we also encourage our customers to establish and embed a digital innovation ecosystem within their own corporate activities.

This internal ecosystem comprises: (1) the search and discovery of digital values; (2) the construction and formation of digital values; (3) a business model innovation process based on the provision of digital values; and (4) a digital value foundation (a digital transformation base), established by repeatedly executing the above steps 1 through 3.

During the innovation processes of steps 1 through 3, we systematize the utilization of the latest
methodologies and approaches to creating innovation—such as design thinking and lean start-ups, as well as open innovation and corporate venture capital— according to our customers’ unique characteristics.

Additionally, while implementing the foundation (the digital transformation base) of step 4, we systematize various transformation methods for incorporating the innovation processes of steps 1 through 3 into the management system.
In order to incorporate these steps into the management process, we coordinate transformation programs related to governance, organization, and personnel systems. We establish methods for developing personnel training and internal processes that accelerate business model innovation. In doing so, we support the formation of internal ecosystems that co-create digital values.

At ABeam Consulting, we support the digital transformation of our customers in two ways. First, we co-create ecosystems that accelerate digital innovation within our customers’ corporate activities. Second, we connect these internal innovation ecosystems to external parties via ABeam Ecosystem. Through the expansion of these digital ecosystems, we contribute not only to the reconstruction of the value propositions of Japanese companies, but also to the acquisition of new competitive advantages.

Everything begins with solving the jobs of our customers

I believe that digital transformation is an activity that utilizes the destructive power of digital values to increase the success rate of innovations.

For this reason, when supporting the digital transformations of our customers, I stay aware of the idea that innovation begins with identifying and resolving the jobs that our customers want to be completed.

Clayton M. Christensen, a Harvard Business School professor and author of The Innovator’s Dilemma, first developed the idea of “jobs to be done”. In a later book, Competing Against Luck, Christensen defined jobs as “the progress that a customer desires to make in a particular circumstance”.

At ABeam Consulting, we also intend to use digital transformations to provide the progress our customers’ desires to make, thereby increasing the probability that their innovations succeed.

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