Digital technology is fundamentally reshaping the way value is created and captured in the economy. Digital transformation is a fundamental and comprehensive transformation of the way a firm is organized to create and capture value by leveraging digital assets as its primary strategic resource. It is not merely an enhancement of the traditional value network where physical assets are transformed into marketable goods and services using digital technology. Rather, it is the transformation of the very core activities themselves. It demands the firms look at value creation and capture not as a linear process that ends with a transaction, but as a non-linear, ongoing, orchestration of activities and resources — both physical and digital — as a part of a digital value loop. Thus, firms are conceptualized as a nexus of algorithms that orchestrate these activities with ever-increasing precision and customization. With a digital value loop as the foundational framework, I offer three distinct business models by which firms can create and capture value with digital assets.
Youngjin Yoo is the Elizabeth M. and William C. Treuhaft Professor in Entrepreneurship and Professor of Information Systems at the department of Design & Innovation at the Weatherhead School of Management, Case Western Reserve University. An Association of Information Systems Fellow, he is also WBS Distinguished Research Environment Professor at Warwick Business School, UK. and a Visiting Professor at the London School of Economics, UK. He is the founding faculty director of xLab at Case Western Reserve University. He has worked as Innovation Architect at the University Hospitals in Cleveland, overseeing the digital transformation efforts at one of the largest teaching hospital systems in the country. Before he returns to Case Western Reserve University, he was the Harry A. Cochran Professor of Management Information Systems and the Founding Director of Center for Design+Innovation at the Fox School of Business, Temple University where he was also the founder and Principal Investigator of Urban Apps & Maps Studios, an interdisciplinary initiative for digital urban entrepreneurship in Philadelphia. Previously, he was the Lewis-Progressive Chair of Management at Case Western Reserve University. He has taught digital innovation strategy at Indian School of Business, Aalto University in Finland, and Korean Advanced Institute of Science and Technology. He was a summer research fellow at NASA in summer of 2001 and spent a year as a research associate in 2003 – 2004 at NASA Glenn Research Center. He was also a visiting professor at Chalmers University of Technology in Sweden, Viktoria Institute in Sweden, Hitotsubashi University in Japan, Hong Kong City University, Yonsei University, Korea and Tokyo University of Science, Japan.
He holds a PhD in Information Systems from the University of Maryland. His research interests include: digital innovation and entrepreneurship, organizational genetics, societal use of technology and design. He has received over $4.5 million in research grant from National Science Foundation, NASA, James S. and John L. Knight Foundation, the Department of Commerce, National Research Foundation of Korea, and Samsung Electronics. His work was published at leading academic journals such as MIS Quarterly, Information Systems Research, Organization Science, the Communications of the ACM, and the Academy of Management Journal among others. He is Senior Editor of MIS Quarterly, the Journal of AIS, and the Journal Information Technology, and is on the editorial board of Organization Science, Scandinavian Journal of Information Systems, and Information and Organization. He was a former senior editor of the Journal of Strategic Information Systems and an associate editor of Information Systems Research and Management Science. He has worked with leading companies including Samsung Electronics, Samsung Economic Research Institute, American Greetings, Progressive Insurance, Goodyear Tire, Sotera Health, Bendix, Moen, Intel, Ford Motor Company, Andersen Consulting, IDEO, Gehry and Partners, University Hospitals in Cleveland, American Management Systems, Lotus, NASA, Parker Hannifin, Poly One and the Department of Housing and Urban Development.