Every senior executive recognizes that digital disruptions are both a huge potential blessing and an enormous threat. Companies can be Uberized out of existence, as is happening with taxi cabs. Or like Amazon, companies can create whole new offerings and competitive advantage. GE uses the power of the Internet of Things to create a new $5 billion business and transform its competitive position. But if it didn’t, new competitors could take its place. It’s no wonder companies often fall into the trap of believing technology can create value.
Businesses recognize the power of digital technology. However, the technology business presents a great lie to the market: Buy this technology and you will be able to do wonderful things. At one level, that’s true. Companies that have bought technology have accomplished wonderful things. But it isn’t true that the technology drives the benefit. The business model drives the benefit.