A Study Of Ericsson's Business Model Innovation Driven By Data Analytics

Different with 3G/4G technology,which was designed for end-consumers,5G technology more focuses on Industrial Internet commercialization.And data analytics plays a more and more important role in it.Data analytics will be deeply integrated in the vertical industry to solve the pain points and implement the application scenarios.As one of the global leaders in the communications industry,Ericsson is requested to innovate its business model to win the new market of digital service.Otherwise,it will be limited to current business scope and can't get enough return of huge 5G R&D investment.Current situation and problems in Ericsson's data analytics-driven business model innovation process are studied according to the theoretical framework.According to the literature,data analytics method can be divided in three groups based on the usage of the data: descriptive analytics,predictive analytics and prescriptive analytics.Different methods are applied for different business areas and models.There are three types of business model innovation: innovation platform,internal VC funds and acquiring startup companies.And there are three common business models which are data analytics centered: data as a service,information as a service and answer as a service.In addition,business model canvas tool can clearly represent business models.In general data analytics will impact business areas of customer relation,product/service innovation and operations.Business model innovation is not easy to take in big organizations because of the impediments related with consciousness,systems,logic,culture and so on.By collecting public documents and surveys from Ericsson employees,Ericsson's current business model is presented by business model canvas tool.From the surveys,Ericsson is working on the way of business model innovation to win the new market.Regarding the type of business model innovation,Ericsson is likely to acquire small companies.In terms of the methods of data analytics,Ericsson mainly adopts predictive and prescriptive analytics in different processes.In the data-driven business model,Ericsson thinks that Iaa S is the best one,but also try other ones in specific scenarios.The business areas to apply data analytics in Ericsson are customer relation,product/service innovation and operations.The impediments of innovation in Ericsson are mainly related to consciousness and culture.Based on the information,a business model canvas including data analytics is given for Ericsson.From the canvas,the most affected areas by data analytics are customer segments,customer relationships,channels,revenue streams,value propositions and partners.Finally,below action proposals are given for Ericsson long-term development in this area: creating internal innovation platform,promoting innovation culture and developing data analytics competence.