The implications of digitalization on business model change

Abstract: Context: Digitalization brings new opportunities and also challenges to software companies. Objective: Software companies have mostly focused on the technical aspects of handing changes and mostly ignoring the business model changes and their implications on software organization and the architecture. In this paper, we synthesize implications of the digitalization based on an extensive literature survey and a longitudinal case study at Ericsson AB. Method: Using thematic analysis, we present six propositions to be used to facilitate the cross-disciplinary analysis of business model dynamics and the effectiveness and efficiency of the outcome of business modeling, by linking value, transaction, and organizational learning to business model change. Conclusions: Business model alignment is highlighted as a new business model research area for understanding the relationships between the dynamic nature of business models, organization design, and the value creation in the business model activities.