Want to Build a Digital Business? Here’s the Framework You Need to Succeed.

In the age of digital transformation, businesses are reimagining their operations to meet the demands of a tech-driven economy. Entrepreneurs today are not only adapting existing processes but also pioneering entirely digital ventures that operate through integrated technological frameworks. This shift requires a structured approach to design, implement and manage digital services effectively, ensuring both seamless delivery and regulatory compliance.

ISO 20000-1 provides a robust framework for entrepreneurs to establish and manage IT service systems, making it an invaluable tool for venturing into the digital business landscape.

Digital transformation involves refactoring business processes to be initiated by predetermined environmental triggers, retrieving the required data from the environment, crafting the expected service as information and adding its instance to the service repository with each initiation. While digitalization focuses on transforming existing processes, the growing trend emphasizes creating digital businesses from scratch by structuring binary processes.

In this article, I explain how entrepreneurs can venture into digital businesses by implementing ISO 20000-1, a framework for IT service management that results in a service management system.

Related: These Are the 3 Steps to a Successful Business via Digital Transformation

What is a digital business?

A digital business is essentially a binary representation of a business service — a set of processes implemented and integrated using information-related technologies. ISO 20000-1 provides the framework to manage the lifecycle of a digital business, from planning to depreciation, supporting only one mode of delivery: digital.

Service planning: The foundation of a digital business

In service planning, you design a business intended for digital delivery. Unlike traditional businesses that rely on physical components such as offices and human resources, digital businesses are formed by integrating digital components like software, hardware and information.

Your digital service can take various forms, such as an online shopping platform, a mobile app or a more advanced service like an auto health monitoring system embedded in a connected vehicle. The process begins with creating a service profile that identifies the problem to be addressed, outlines required components and specifies how they will be integrated to deliver the solution.

The role of the entrepreneur: An integrator

As an entrepreneur in the digital age, your primary role is that of an integrator. Most of the required components for your service already exist in the information market. Your task is to:

1. Procure technologies wisely: Study and compare available technologies, map them to your requirements, and shortlist providers.

2. Ensure compatibility: Select technologies that are compatible with both the service requirements and each other.

3. Optimize integration: Arrange compatible technologies for optimal performance, ensuring customer satisfaction through service reliability and efficiency.

Financial management in a digital business

Budgeting and accounting in a digital business focus primarily on operating expenses (OPEX) rather than capital expenditure (CAPEX). As an entrepreneur, you need to manage supply and demand in a timely manner and adjust your capacity accordingly. Your OPEX, as the core of your business’s financial management, revolves around various types of licensing, which are often usage-based. For example, cloud infrastructures are commonly used to deliver digital services. To optimize costs, you need to estimate your business traffic and manage capacity accordingly.

Related: Top 4 Mistakes To Avoid When Digitally Transforming Your Business

Regulatory compliance: A crucial component

Creating a regulatory profile is essential. This structured file contains the regulatory requirements for your digital service, ensuring compliance and alignment. APIs provided by regulators can simplify this process by offering real-time updates. Otherwise, manual updates are necessary.

You need to define your acceptable service level based on a benchmark relevant to your market and industry. By maintaining this service level, you meet the requirements of the most important interested party in your digital business: your customers. Service level-related instructions should be added as a supporting component to your digital service. The service must verify each transaction against these instructions, log any discrepancies and flag them for further investigation and resolution.

Service catalog and asset management

Maintaining a service catalog is critical. This catalog acts as a registry for all the digital services delivered by your business, describing their purpose and scope.

Each process that supports one or more digital services is an intangible asset. Innovative business processes also have the potential to be granted a patent. Additionally, the ever-evolving information that enables your business processes is considered an intangible asset. Another use of the service catalog is to serve as a register for these intangible assets, including the processes constituting your digital services and the information that enables them.

Configuration database and service assurance

You need to maintain a configuration database, which acts as a repository for the digital processes that constitute a digital service. This database allows you to view the current configuration of each service process, including how a process performs its assigned task, the triggers that initiate it, its input and output data streams, and the expected results.

A configuration database enables you, as an entrepreneur, to make more informed decisions regarding service assurance by providing timely information on the processes that constitute your digital service. This supports you in ensuring service availability, continuity and information security.

Related: Starting a Digital Business? Here Are Common Pitfalls to Avoid

Continuous improvement and change management

The principle of continuous improvement necessitates changes in process configurations. When implementing changes, you must test the updated process according to predetermined criteria and integrate the new version into the respective service before it goes live. The new process version, with its updated configuration, should then be added to the configuration database while safeguarding previous versions for reference and backup.

Building a successful digital business demands a combination of strategic planning, technological integration and continuous improvement. Entrepreneurs must act as integrators, leveraging existing technologies to create efficient and compliant digital services. By adopting ISO 20000-1, they gain a systematic approach to managing the lifecycle of digital services, from conceptualization to delivery. This framework not only ensures operational excellence but also sets the foundation for innovation, enabling digital businesses to thrive in a competitive market.