Changing the Rules of the Game: Non-Linear Business Models for IT Services

Abstract

The biggest challenge for any business is not just attaining the growth but to sustain the same. Information Technology has been changing the rules of the game rapidly in all spheres of life. Information Technology (IT) business itself the change is not only uncertain but has proven to be unforecastable. Rapidity of change due to advances in IT and in the IT-business has created an extreme level of competition that has been unprecedented as IT has eliminated various types of barriers for anyone to start a new business. The newer technologies like cloud, mobile, analytics, machine learning/artificial intelligence, and internet-of-things, are enforcing IT services companies to transform themselves to deal with the newer challenges as they are creating newer companies. As of 2017, a quarter of organisations are spending 15 percent or more of their IT budget on machine learning capabilities, and we expect the number of machine learning examples to rise in the near future. In this scenario, Companies should not only focus on ‗building new competencies‘ but also developing new business models. These challenges are accelerating the search for innovative business models. Business model will be useful in distinguishing one business from another and identifying the resources necessary to implement them. Business model converts innovation to economic value for the business. The mushrooming of technology-based start-ups indicates a new threat and opportunity. In this scenario, business model innovation has become the key to competitive advantage. For example, in the Aviation industry ―No-frill Business model‖ had made huge impact around the world. According to this model, Air-lines will offer generally low fares in exchange for eliminating many traditional passenger services This study identifies the recent disrupting trends in IT. This paper develops the Business model matrix representing the innovative, non-linear business models for IT industry.