Business model innovation and strategic transformation when confronting digital disruption: The case of data driven business models for professional services
Most businesses and industries are undergoing significant disruption due to digital innovation. We focus our discussion on the rise of data driven business models in the professional services industry. Big data, advanced analytics and artificial intelligence solutions are now diffusing across industries. Professional services firms are knowledge intensive which may raise specific issues in relation to data analytics and artificial intelligence. In addition, these firms currently face high levels of potential disruption due to digital innovation by new start ups. When trying to understand the impact of these developments on the professional services industry, two prominent issues need to be considered. Firstly, digital innovation often results in the creation of new business models. This raises questions about whether these models are more generic (digital) showing great similarities across industries, or specific to the professional services industry. Moreover, there are questions related to whether the initiators of business model innovation are new, digital start ups, or well established incumbents. Secondly, when an incumbent is required to transform due to digital disruption, we need a more nuanced understanding of the strategic transformation processes in relation to the nature of professional services and technology innovation. Our paper makes two major contributions to the literature. First, it takes a critical look at data driven business models in the context of professional services firms. Second, it puts forth several research propositions that warrant further critical examination when it comes digital disruption barriers and enablers faced by incumbents and start ups.