Decision Model Innovation: The next frontier in creating competitive advantages in converging industries
DECISION MODEL INNOVATION: An Introduction
The RDA Business Environment
Many companies that I work with are strongly affected by three major developments:
These three developments ( Robotics & Globalization, Digitization, Access-based Business Models) lead to an increasing “Commoditization of Products and Services”. For example, the automotive sector has been among the first to both experience a massive industry convergence into the so-called mobility sector and to fully embrace the potential of robotics to harmonize their manufacturing processes around the world and locate their assembly plants next to their major sales markets. This development also allowed OEMs from emerging markets to catch up in quality levels and at least reduce the margins of established players in the BRIC countries. Similarly, the sharing economy is reducing the number of cars sold and, even more important, disconnecting the actual mobility consumer from a specific car brand (e.g. a subscriber to a ‘premium’ car sharing service doesn’t care whether the car he/she gets access to for each ride is a BMW, Mercedes, or Audi). In addition, digitization in the form of artificial intelligence, massive cloud computing or detailed digital maps and new data transmission standards allows for new forms of mobility such as autonomous driving; i.e. the ultimate form of transparency that a mobility consumer can get from a car).
As a consequence of this “Commoditization of Products and Services” through industry convergence, companies face the problem to identify new ways to create customer value & capture in order to sustain their profit margins in the future.
Our suggestion is to think of “Decision Model Innovation” as a posssible answer.
DECISION MODEL INNOVATION (DMI)
In the past, companies have created COMPETITIVE ADVANTAGES through product/service innovation, process innovation and business model innovation.
However, with the rise of the DATA-driven economy & KNOWLEDGE societycompanies need to consider another form of innovation. In our observations of industries and our interactions with companies we have experienced that companies are increasingly struggling to find ways to differentiate their value proposition from competitors in converging industries due to the “Commoditization of Products and Services”. During the last decades, companies first focused on product innovation, later in combination with process innovation, and finally followed the concept of business model innovation.
We do not propose DECISION MODEL INNOVATION (DMI) as being a completely new model compared to business model innovation but differentiate DMI as follows from product, process and especially business model innovation:
Dr. Roger Moser
Dr. Moser is an entrepreneurial academic who focuses on creating the FIT between the intelligence requirements of decision-makers and organizations and their intelligence processing capacities. He defines this FIT as the DECISION INTELLIGENCE of individuals and organizations.