Sewpersadh  Journal of Innovation and

Journal of Innovation and Entrepreneurship (2023) 12:2

https://doi.org/10.1186/s13731-022-00252-1 Entrepreneurship

REVIEW Open Access

Disruptive business value models

in the digital era
Navitha Singh Sewpersadh*   

*Correspondence:
[email protected] Abstract
College of Accounting, University The coronavirus pandemic illustrated how rapidly the global environment could be
of Cape Town (UCT), 4th Floor, disrupted on many levels but also drive an acceleration in others. Business leaders are
Leslie Commerce, Rondebosch, grappling with dysfunctional business models that are ill-equipped to manage the
Cape Town 7701, South Africa
disruptive environment of growing artificial intelligence. Hence, this study examined
the discontinuous shift in the scope and culture of business models by exploring
interdisciplinary streams of literature. An integrative review methodology was used
in this study to develop theoretical constructs relating to business model innovation
in the services sector. Key propositions were an innovation continuum, a responsive
business innovation model and value architecture, which inculcates a sustainable value
creation proposition and market advantage. Businesses must continuously evolve on
the high end of the innovation continuum to reduce the risk of innovation apathy and
strategic myopia. A key contribution of this study was the interdependencies in value
networks that allow for collaborative working and co-creation of resources, such as
crowdsourcing, crowdworking and social media platforms. This study also showed the
growing importance of a centre of excellence to function at the forefront of disruptive
technologies. A key finding was the need for governance structures to recognise and
manage the trade-offs between value drivers, which sometimes may conflict with soci-
etal benefits. The integrative review revealed that customer relationship management,
global business services and artificial intelligence had not been unified in the extant
literature, which makes this paper novel in its contribution to businesses struggling
with or opposed to the digital revolution.
Keywords: Artificial intelligence, Bots, Business model, Customer relationship, Digital
transformation, Innovation, Networks, Services, Technology, Value drivers

Introduction
The evolution of technology has disrupted almost every business globally by continu-
ously transforming, enhancing, and streamlining operational processes and proce-
dures. Digitalisation1 is disruptive and brings about discontinuous changes (Paiola &
Gebauer, 2020), but it is a key element for new value-creation and revenue-generation

1
Digitalisation or digital transformation is the use of AI technology in the business processes and activities of a com-
pany.

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Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 2 of 27

opportunities for market competitiveness (Kamalaldin et al., 2020). Climate change,

pandemics, environmental devastation and widening social inequalities have created an
abrupt realisation that the existing business models are no longer ‘fit for purpose’. New
practices, skills, operational processes, and business models are required to use artifi-
cial intelligence2 (AI) to create value for customers (Sjödin et al., 2021). It is increasingly
important for businesses to understand the evolving environment to assimilate for via-
bility in the market and then innovate to gain a competitive advantage. Businesses face
pressure to focus on achieving their non-financial goals and not just maximising prof-
its (Rabaya & Saleh, 2022). The interconnected elements of environmental, societal and
governance (ESG) have provided a catalyst to transform businesses to be more respon-
sive toward the planet and people when pursuing profitability and growth. “The illiterate
of the twenty-first century will not be those that cannot read or write, but those that can-
not learn, unlearn and relearn” (Toffler, 1970). Refining, adapting, revising and reformu-
lating a business model provides businesses with a roadmap for achieving holistic goals
by harnessing the strategic advantages of AI technologies.
Digital transformations create new potential for organisations to redefine and optimise
their operations by recognising the role of automation3 in creating market differentiation
and service excellence (Flyverbom et al., 2019; Zuboff, 1988). The COVID-19 pandemic
affected critical business functions across organisations globally, thus serving as an
accelerator of digital transformations and the reconfiguration of static business models.
The pandemic affected how people operate and customer services are provided, particu-
larly when governments imposed regulated lockdowns to protect human life. Accord-
ing to institutional theory, internal and external pressures (Zucker, 1987) accelerate the
desire or compulsion to transform an organisation. One such pressure is disruptive digi-
tal technology, and the other is the pandemic. The traditional workforce has also been
transformed into a blend of humans working collaboratively with AI.
A global survey conducted by Deloitte (2020) found that the largest concern for
respondents during the pandemic was the viability of their business models. Some busi-
nesses led the business model innovation4, while other companies crumbled. As the
contingency theory proposes (Lewin & Volberda, 1999), a suitable strategy is required
to accomplish a strategic fit with an organisation’s market. Therefore, business model
innovation is a key ingredient in underpinning a business resilience strategy, particularly
with technological innovation rapidly changing the nature of work. These pressures to
innovate in the digital era have widened the gap between innovators and stragglers in
the business world. The advantages of conventional business processes that are human
reliant are weakening, exposing the fragility of the human capital leverage model, which
will be further impacted as AI evolves. Therefore, innovation laggards may fail should
they not embrace the principle of accelerating disruptive technologies in their business
models. As global economies face unprecedented disruption, a once disruptive busi-
ness model can become static by becoming complacent or relying excessively on past

2
AI is distinct from conventional information technology and is defined as the ability to learn, connect, assimilate and
exhibit human intelligence.
3
Automation is defined as the employment of technologies to perform a process or task that reduces human interven-
tion.
4
Innovation in terms of this research refers to business model, service and technological innovation.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 3 of 27

strategies that may have become outdated. This risk of innovation apathy or myopia
motivates businesses to have an agile business model that continually evolves with the
disruptive digital era.
A business model is seen as a robust abstract instrument to model a framework for a
company’s competitive stance (Hamel, 2000) by connecting technical potential with the
recognition of economic value (Chesbrough, 2011). However, Teece (2010) argued that
approaches to business models are diverse due to the absence of a theoretical grounding
in economics or business studies. For this reason, there have been calls for research on
business models and value propositions5 focusing on market differentiation and indus-
try disruption (Weinstein, 2020). Emerging market differentiators are concentrated on
labour automation, such as Robotic Process Automation (RPA) and service bots used in
Global Business Services (GBS) (OECD, 2007; SSON, 2018). However, codifiability and
digitalisation in the global services literature are absent despite the advantages of the
centrality of transaction costs and efficiencies (McWilliam et al., 2019). There is an ongo-
ing call for researchers to adapt and extend how AI technologies can be aligned with
business (Coltman et al., 2015; Santos et al., 2020; World Trade Organization, 2019).
Moreover, a persistent gap exists in academic research regarding the business models
using AI for digitalising Customer Relationship Management (CRM) in the global ser-
vice sector. A necessary first step toward knowledge evolution and model building is a
systematic exposition based on theory (Melville et al., 2004) and disruptive technology
(Parmar et al., 2014) that drive an understanding of business model innovation (Teece,
2018) to capitalise on business opportunities that overcome pandemic challenges.
With digital servitisation6 (Kohtamäki, et al., 2019; Vendrell-Herrero et al., 2017), the
service sector is no longer operating as a separate category, since retailers and manufac-
turers are entering the service sector with smart services, such as Caterpillar, Michelin,
Siemens and Voith Group. They transform their products by embedding software
to communicate to the data cloud (Ng & Wakenshaw, 2017), which can then be ana-
lysed through advanced data analytics for co-created value-added services (Opresnik &
Taisch, 2015). This study selected the service sector to examine business model inno-
vation, since it is people-centred and an important contributor to the economic envi-
ronment. A GBS structure was adopted in this study, because it allows the researcher
flexibility to incorporate innovative systems with global mobility for the service sec-
tor’s offerings. The GBS business model also provides benefits of economies of scale,
streamlined processes, superior service quality and scalability of operations through
consolidating support functions into a single centre staffed with specialists. This article
provides crucial theoretical framing by linking the CRM, GBS and service innovation
technologies to business model innovation. This study contributes an innovation contin-
uum, a responsive business innovation model and value propositions focused on market
differentiation, service innovation and industry disruption. This study also provided a
research agenda to catalyse future research.

5
A value proposition enables stakeholders to understand how the business intends to use its strategic resources, which
is then mapped to the business model.
6
The transition from products and add-on services to smart solutions with connectivity, monitoring, control, optimisa-
tion and autonomy is known as digital servitisation.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 4 of 27

Protocol development

•Search of scientific databases (EBSCO, Web of Science and Articles identified

Scopus) for the individual and aggregrated constructs of GBS,
through searching
CRM, innovation and business model.
databases (n=945)
Phase 1 •Forward and backward referencing for additional articles
(Webster & Watson, 2002)
Eliminated duplicates
•Elimination of duplicate articles (n=605)
•A thematic analysis was used to extract themes, constructs, Records screened by
Phase 2 patterns and descriptions from articles (Bryman, 2012). title and abstract and
selected (n=238)

•Create a consistent theoretical structure through application of

Full-text articles read
taxonomy building methodology (Nickerson et al., 2013) for
and assessed for
Phase 3 business value model.
eligibility (n=79)

Fig. 1 Phases of the integrative review. Source: Author

Research methodology
This study employed a methodical means of assembling and synthesising previous
research (Baumeister & Leary, 1997; Tranfield et al., 2003) through an integrative review
process of experimental and non-experimental research with theoretical and empirical
data (Whittemore & Knafl, 2005). This study adopted a concept-centric rather than a
chronological or author-centric approach (Webster & Watson, 2002) due to the inclu-
sion of four streams of literature: GBS, CRM, service innovation and business models.
As Webster and Watson (2002) envisaged, the research process started with a proto-
col development to create a defined body of literature for the theoretical development
of a responsive business innovation model. The protocol had three phases, as depicted
in Fig. 1. The first phase mitigated the incompleteness risk of the literature review by
systematically identifying and reviewing existing databases. While the second phase
remedied the overlap from different databases by filtering for duplicates, the final phase
focused on creating a consistent structure among all patterns. There was rigorous
screening and appraisal of each paper to assess whether its content was fundamentally
relevant. A final sample of 79 high-quality articles was selected to build the theoretical
constructs for this study. Other articles published by technology or accounting firms in
this paper’s literature review and results section were used to establish current market
practices. Whittemore and Knafl (2005) stated that the suppositions of the integrative
review could be reported in tabular or diagrammatic form. Since the study intended to
develop a theoretical business model in the form of a diagram, a thematic analysis was
used to consolidate further and conceptualise higher levels of themes, constructs, pat-
terns and descriptions from articles associated with GBS, CRM, service innovation tech-
nologies and business models.

Literature review
A theoretical framing is required for constructing a response business model. A busi-
ness model provides a rationale, design or architecture for strategic choices to create,
deliver and capture value (Magretta, 2002; Osterwalder & Pigneur, 2010) by specifying
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 5 of 27

the structural elements and technology to address the unmet needs and activities of cus-
tomers (Teece, 2018). Accordingly, organisational theory (strategic decision-making),
customer relationship management (customer needs), global business service (structure)
and service innovation technology provide the grounding for this research.
Organisational theories
The institutional theory provides a multifaceted business outlook on normative pres-
sures from external and internal sources that influence organisational decision-making
(Zucker, 1987). It determines conventional rules and assumptions (Oliver, 1997), whereby
conformance to these norms is compensated through improved legitimacy, resources
and survival capabilities (Scott, 1987). Institutions provide social structures, rules and
resources that are important to the service sector. Adopting AI in the service sector dif-
ferentiates the fourth industrial revolution from the third (Schwab, 2017), which triggers
adaptive structural processes that progressively change the organisation’s social inter-
action rules and resources that determine decision efficiency outcomes (DeSanctis &
Poole, 1994). In the knowledge economy7 (Powell & Snellman, 2004), greater reliance
is placed on the intellectual capabilities of intangible resources as opposed to physical
resources for decision-efficiency outcomes.
Extrapolating these theories to the fourth industrial revolution, it is apparent that
there are challenges that organisations face to conform to the normative pressures of
digital disruption that depend upon each company’s specific circumstances (contingen-
cies). “A good business model begins with an insight into human motivations and ends
in a rich stream of profits” (Magretta, 2002 pg. 3). Each organisation needs to find a
strategic fit within the knowledge economy to gain value-driving opportunities while
accelerating its customer-centric initiatives. For this reason, the customer relationship
management (CRM) literature provides a framework to delve into human motivations
concerning their buying incentives, biases and emotional connections.

Customer relationship management

The core of CRM is understanding customer needs and leveraging that knowledge to
increase a firm’s long-term profitability (Stringfellow et al., 2004). In the digital era, tech-
nology may be leveraged to be customer focused to understand customer needs better.
For instance, probing large data sets (big data) may inform CRM strategies (Payne &
Frow, 2005; Stringfellow et al., 2004). Customer data is a rich source of unstructured,
voluminous and ambiguous data for further processing through analytics. Data analyt-
ics are recommended for managerial strategic decision-making, since it is grounded in
evidence rather than perception (IBA Global Employment Institute, 2017; McAfee, et al.,
2012). Knowledge gained from data analytics is essential for building close customer
relationships for service differentiation, customer loyalty and value creation.
Irrespective of the industry, the desire to nurture customers is a key success factor
driving the need for CRM differentiators to gain a strategic competitive advantage. How-
ever, Stringfellow et al. (2004) criticised knowledge-deficient models developed from

7
The knowledge economy is defined as production and services based on knowledge-intensive activities that contribute
to an accelerated pace of technological and scientific advance as well as equally rapid obsolescence (Powell & Snellman
2004 pg. 201).
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 6 of 27

superficial customer data (demographics and transactions), since these do not address
the functional (purpose-fulfilling) and emotional requirements of customers. They used
the study by Schneider and Bowen (1999) to illustrate that decision-making is not dic-
tated by functional needs, since a man may pay double the price to buy a Ralph Lauren
polo shirt instead of a similar unbranded polo shirt to fulfil his self-esteem needs. This
diversity in customer decision-making illustrates that relational selling may sometimes
outweigh value-based selling. Therefore, any customer-centric business model should
understand that buyers are not always rational but emotionally guided. For this reason,
sales or services can be categorised as value-based to fulfil purpose or relational to fulfil
the emotional connections to the product or service.

Global business services

According to OECD (2007), business services are provided to other businesses instead
of customers. Organisations wanting to reduce costs enter the outsourcing market for
lower-cost business services. However, within a GBS, various processes and functions
are shared and operate unitedly instead of using several shared service centres and deal-
ing with outsourcing vendors independently. The principal objective of GBS is to pro-
vide business-to-business services at a reduced fee and at contracted levels of quality
that improve practice through lean, cost-competitive, efficient and streamlined pro-
cesses with an optimised cost structure (Daub et al., 2017; OECD, 2007; SSON, 2018).
This goal is achieved by leveraging a range of enablers, including a robust customer
interaction framework, standardisation, economies of scale, automation, organisational
realignment, labour/robotic arbitrage, implementation of best practices and true “end-
to-end” process optimisation (SSON, 2018). Thus, companies leverage a GBS model to
gain market advantage and operational efficiencies through an agile, focused and leaner
service organisation. GBS integrates services that forsake functional silos and tran-
scends to a multifunctional collaborative approach. GBS has an amalgamated delivery
model providing “back-office” services to a global customer base, such as accounting,
finance, HR, IT and procurement, and increasingly moving to “front office” activities,
such as sales, marketing, analytics and reporting (SSON, 2018). Currently, businesses are
focussed on services related to their digital offerings and the analytics of their custom-
ers’ data. Geographical expansion, innovation quest and the adoption of new technolo-
gies are important in pursuing profits when competition is rife (Hodgson, 2003). GBS,
with AI technology, has an opportunity to achieve scalability by integrating its multitude
of centres into a single network to expand its range of business across the globe for a
competitive advantage.
Most GBS users depend heavily upon intangible assets, particularly technological and
service innovations (OECD, 2007). GBS centres can integrate automation, virtualisation
and analytics, amongst other digital tools and capabilities, into their prevailing processes
that provide more effective support to business units (Daub et al., 2017). Global organi-
sations, such as Siemens, have incorporated a GBS-type structure into their global mul-
tifunctional business model that provides shared services to all Siemens businesses. The
two fundamental principles that guide this organisation’s international services centres
are customer satisfaction and continuous improvement through innovation (Siemens,
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 7 of 27

2020). For this reason, the GBS-type structure has extended to accounting firms, with
their large global networks increasingly centralising certain remote auditing functions
through technology and then outsourcing geographic-dependent work to their com-
ponent auditors. For the longevity of any business, new organisational designs need to
evolve that shape human workers, such as service innovation technologies.

Service innovation technologies

The innovation theory proposes that innovations diffuse from early adoption to wide-
spread use (Rogers, 1995). However, innovations have a lag effect on their relative
advantage (profitability, social prestige, other benefits) over its predecessor. In defining
a technology readiness index ranging from innovators to laggards, Rogers (1995) elab-
orated on the speed of the adoption being positively related to the perceived benefits,
compatibility with the company’s structures, ease of use and trialability (experimental
capability). The innovation diffuses at the rate at which an innovation’s results are visible
to others (observability). However, the complexity of the innovation is negatively related
to the speed of the adoption. Understanding innovation theory is central to constructing
or transforming a business model.
The quadruple-helix theory proposes that society can drive the innovation process to
design sustainable strategies to achieve social innovations in a green economy (Carayan-
nis et al., 2012, 2020). ESG goals are increasingly being demanded by stakeholders to
be incorporated into business models. The focus on ESG has led to traditional business
models integrating sustainability while undergoing digital transformation. A sustainable
business model delivers multifaceted value to a wider range of stakeholders when com-
pared to the traditional business model (Bocken, et al., 2013). Digital technologies allow
for strategic planning on economic, social, and environmental performance (Evans,
et al., 2017). For instance, social network platforms may assist companies in achiev-
ing their ESG goals allowing companies to move closer to a green economy. Platforms
are technologies that facilitate networking for companies to co-create with stakehold-
ers (Allen, et al., 2009). A concept is drawn from the microworking philosophy (Howe,
2008), where a large dynamic network enables the organisation to connect with the
internal and external environment for co-creation opportunities. Close company–cus-
tomer collaboration allows for long-term value co-creation (Kamalaldin, et al., 2020),
where customers co-produce services by providing insights. Types of co-creation oppor-
tunities are the wisdom of crowds8 (Surowiecki, 2004), open innovation9 (Chesbrough,
2003), crowdsourcing10 (Howe, 2008) and crowdworking11 (Ross, 2010). A common fea-
ture of these co-creation opportunities is that they all use an open call for knowledge
to create innovative solutions. Amazon Mechanical Turk and Uber are examples of the
crowdworking philosophy using digital platforms to build networks in the service sector.

8
Wisdom of crowds uses a wide range of annotators to create large datasets, for example, Wikipedia.
9
Open innovation is the free flow of knowledge to accelerate internal and external innovation.
10
Crowdsource is an open call to internet users to get innovative solutions.
11
Crowdwork is “the performance of tasks online by distributed crowd workers who are financially compensated by
requesters (individuals, groups, or organizations)” (Kittur et al., 2013 pg. 1).
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 8 of 27

Leveraging society’s connectivity and responsiveness through platforms facilitates the

collaborative designing of personalised products, services and experiences.
Technologies such as RPA and service bots have been widely adopted in the service
industry. RPA interacts with the user interface of other computer systems using rule/
logic-driven software robots (softbots) that are coded to execute a high volume of repeti-
tive tasks without compromising the underlying IT infrastructure (Deloitte, 2018; van
der Aalst et al., 2018; Willcocks et al., 2015). This technology dates to the Eliza pro-
gramme’s interactive bots that enabled interaction between humans and machines
using text-based communication (known as the Turing test) (Turing, 1950; Weizen-
baum 1966). RPA follows prescribed protocols and procedures that increase the speed,
accuracy, compliance and productivity of business processes.12 Instead of multiple ERP
solutions (taking data from one system and inputting it into another system), it is more
cost-effective and efficient to integrate RPA into a company’s existing infrastructure and
automate processes (van der Aalst et al., 2018). However, RPA is on the lower end of
intelligent automation, since it uses structured logic and inputs to operate from simple
to complex business tasks.
RPA with cognitive automation has allowed softbots to be more useful due to their
superior intelligence. Softbots with machine learning13 capabilities are designed to
mimic human thought and action to manage and analyse big data with greater speed,
accuracy and consistency than humans can achieve by leveraging different algorithms
and technological approaches (Firstsource, 2019). Algorithms do not produce definitive
solutions but present probability-based predictions for humans to evaluate and make
informed decisions. Table 1 provides a summary of the Softbots.
Softbots are also known as service robots, chatbots, AI bots, AI assistants, virtual
assistants or agents, and digital assistants or agents. This study adopts the term service
robots, since they are most common in customer support or sales environments, where
they are expected to serve customers. For instance, call centre jobs are labour-intensive
and employing people’ around the clock’ for one or two late-night phone calls are costly.
However, service bots can answer simple queries efficiently and far quicker than a per-
son can. Service bots use Natural Language Processing (NLP) to develop logic from
unstructured inputs for human interaction. Service bots with NLP, Natural Language
Understanding (NLU)14 and Natural Language Generation (NLG)15 are distinguished
from the greater domain of service bots due to their aptitude to employ language to con-
verse with their clients. Table 2 shows the different types of service bots.
Kiat (2017) states that service bots can manage CRM quality by handling mundane
tasks leaving salespeople to focus on high-value tasks, such as meeting customers and
concluding company sales. In general, leads should be attended to within 5 min to

12
Business processes are activities that underly value-generating processes such as transforming inputs to outputs (Mel-
ville et al., 2004).
13
Machine learning allows a machine to learn by using algorithms to analyse and draw inferences from patterns in data
without direct intervention.
14
NLU helps bots understand the user by using language objects (such as lexicons, synonyms and themes) in conjunc-
tion with algorithms or rules to construct dialogue flows that tell the chatbot how to respond.
15
NLG enables bots to interrogate data repositories, including integrated back-end systems and third-party databases
for information to be used to create meaningful and personalised responses that are beyond pre-scripted responses.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 9 of 27

Table 1 Softbot functionalities

Functionality Description Author

RPA accepts a varied set of sophisti- Learns new commands, the loca- Etzioni et al. (1993)
cated objectives tions of several objects, and its
human partners’ preferences
RPA technology sits on top of the No coding experience is required Willcocks et al. (2015)
current IT systems and does not for human users. No need to
substitute but supplements BPM develop expensive platforms,
replace existing applications or
manipulate their code, resulting in
significantly lower IT investment
expenses
RPA serves as a digital worker and RPA is granted the same user van der Aalst et al. (2018); Willcocks
interacts as a human user would access rights as given to humans to et al. (2015)
with other systems perform mundane, repetitive pro-
cesses to reduce the transactional
workload of humans. RPA software
acts as a digital worker with a login
ID and password to perform rou-
tine tasks like the HR onboarding
process for new employees. RPA
releases humans to focus on non-
routine HR tasks requiring critical
thinking and skills
Softbots mainly automate white- Softbots can execute business pro- Acemoglu and Restrepo (2019); Ago-
collar work, such as accounting, cesses, such as humans typing and stinelli et al. (2020); Deloitte (2018);
sales, logistics, trading and manage- clicking in different applications, Willcocks et al. (2015)
rial occupations alternatively taking information
from one system and capturing it
into another system or analysing
documents to gather data
Source: Author

convert them to paying customers, which would be achieved with service bots. Other
advantages are:

• Seamless interface: bots can recall their previous customer interactions and seam-
lessly verify customer data by linking to social media, so queries are addressed at
a speed unmatched by humans. Service bots can also seamlessly transfer compli-
cated cases to human operators, facilitating humans’ foci on higher value customer
engagements.
• Data enrichment: cost-effectively resolving data leakage problems, since humans
often neglect to record key customer information from the various stages of the cus-
tomer’s purchase process, whereas a service bot would automatically capture the dis-
cussion.

Service bots are key differentiators within the IT industry with improved revenue
performance and customer value (customer contentment, service delivery and contact
centre performance) (MIT Technology Review, 2018). Service innovation technologies
are employed by renowned brands, such as Amazon, Netflix, Starbucks and Spotify, to
name a few. Service bots work reliably and accurately around the clock while maintain-
ing the same competence level without being distracted or fatigued. Service bots also do
not have inherent limitations, such as becoming ill, going on strike or requiring leave. In
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 10 of 27

Table 2 Types of service bots

Type of Service bots Description Limitation

NLP or linguistic service bots are Linguistic service bots have a highly Interactions with these bots are
rule-based and use if/then logic to labour-intensive approach which specific and structured, during which
generate conversational flows that can be rigid and slow to develop, automated tests check the bots’
deliver the fine-tuned control and since language conditions review quality and consistency but cannot
agility omitted in machine-learning the order of words, synonyms and correct any bot misinterpretations,
service bots common phrases, ensuring that since they require humans to modify
These are the most common bots questions with the same connota- the conditions
encountered by the public through tion get the same answer
live chat, an e-commerce website, Capabilities include interactive,
or Facebook messenger frequently asked questions, deliv-
More advanced service bots are ering specific scheduled com-
multi-language munications, slot filling, making
reservations, purchasing catalogue
items, updating customer profiles,
or other basic transactional compe-
tencies, such as taking pizza orders
Virgin Trains in the UK uses service
bots with NLP to automate
customer refunds by reading
customers’ emails, reducing daily
processing time and manual labour
by 85 per cent
AI service bots use machine learn- Algorithms mimic human cognitive AI service bots work best if tasks are
ing that is more sophisticated, functioning allowing service bots well matched to their capabilities,
interactive and personalised than to adapt and handle non-standard since they require a large amount
rule-based service bots, since they cases by observing humans resolve of training data and human training
are more conversational, data- problems (such as system errors, specialists to perform even basic
driven and predictive unpredicted system behaviour, or tasks
changing forms) Any malfunctions are difficult to fix,
AI software can sense, reason and let alone optimise and improve
act with structured and unstruc-
tured data, performing tasks
normally associated with human
intelligence, such as decision-
making, visual/pattern recognition,
speech recognition and translation
between languages
Gradually with the power of data,
they become contextually aware
and leverage NLU to personalise a
user’s experience through predic-
tive intelligence
Source: compiled by Author

2019, the banking sector achieved operational cost savings of $209 million from employ-
ing service bots. Insurance claims management departments had cost savings of $300
million across motor, life, property and health insurance (Juniper Research, 2019). Arti-
ficial Solutions (2020) also reported that Shell attained a 40 per cent decrease in call vol-
ume to live agents due to their service bots, Emma and Ethan. They answered 97 per
cent of questions correctly and resolved 74 per cent of digital dialogues. Similarly, the
service bot Laura is digitally transforming Skoda (a Volkswagen Group’s subsidiary),
where customers can discuss their vehicle needs and budget with Laura (Artificial Solu-
tions, 2020). Therefore, digitalisation has resulted in customer relationships evolving
from transactional to more relational.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 11 of 27

Table 3 Digital business model key constructs

1. Customer insights, tailoring and satisfaction Amit and Zott (2012); Dehning and Richardson (2002);
Dedrick et al., (2003); Iansiti and Lakhani (2020); Kim
(2021); Payne & Frow, 2005); Schryen (2013); Sjödin et al.,
(2021); Stringfellow et al., (2004)
2. Digital business process enhancements Downes and Nunes (2013); Sjödin et al., (2021)
3. Data competencies and analytics Gauthier et al., (2018); Parida et al., (2019)
4. Intangible assets Dedrick et al., (2003); Schryen (2013); van der Aalst and
et al., (2018)
5. Workforce capital Acemoglu and Restrepo (2019); Agostinelli et al., (2020);
van der Aalst et al., (2018); Willcocks et al., (2015)
6. Increasing coordination and productivity Amit and Zott (2001); Iansiti and Lakhani (2020); Visnjic
et al., (2017)
7. Performance/financial returns Amit and Zott (2001); Dedrick et al., (2003); Dehning and
Richardson (2002); Kim (2021); Schryen (2013); Teece
(2010); van der Aalst et al., (2018)
8. Environmental and societal values Anderson and Kupp (2008); Bocken et al., (2013); Boons
et al., (2013); Evans et al., (2017); Kim (2021); Sanchez and
Ricart (2010); Yang et al., (2014)
9. Sustainable competitive advantage Casadesus-Masanell and Zhu (2013); Kim (2021); Mitchell
and Coles (2003); Morris et al., (2005); Yang et al., (2014)
10. a) Creates value Amit and Zott (2001); Aspara et al., (2013); Casadesus-
b) Co-creating value Masanell and Zhu (2013); Chesbrough (2010); Kim
(2021); Magretta (2002); Teece, 2010); Visnjic et al., (2017);
Paschou et al., (2020)
Source: compiled by Author

Results: theoretical propositions

Several constructs emerged from the thematic analysis of the integrative review for
developing a digital business model, reflected in Table 3.
Using the people, process and technology (PPT) framework (Leavitt, 1964), these ten
constructs from Table 3 and innovation capabilities are presented in Fig. 2. This study
has added governance to the PPT framework to form the PPTG framework. Governance
is imperative for oversight over the value-creating activities (Sewpersadh, 2019a) to bal-
ance the trade-offs from the synergistic benefits of lower costs, increased coordination,
greater productivity and value delivery with the ethical and risk concerns over customer
data.
In Fig. 2, people have been expanded to include service bots. Collaboration between
service bots, employees and customers are integral for value co-creation. Service bots
cost-effectively record customer information from the various stages of their service
interactions, allowing for data warehousing. Data warehousing is important for allow-
ing data mining tools and the analysis of critical customer parameters.An ethics and risk
officer will play a key governance role in overseeing the principles of fairness and eth-
ics over emerging technologies, such as service bots. Increasingly companies integrate
their AI technologies with social media platforms which necessitates the ethics and risk
officer to detect, correct and prevent any biases that the service bots learn through the
data they collect. For example, service bots may discriminate against customers based
on their demographics (Puntoni et al., 2021). In 2016, Microsoft launched a service bot
called Tay to research conversational understanding. This project failed, because the
developers did not anticipate that some Twitter users would teach the bot to make rac-
ist, inflammatory and offensive tweets through its Twitter account (Berditchevskaia &
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 12 of 27

People
Customers, Human &
Service Bots

Smart
Collaborate &
Analycs
Co-create Value
Creaon Technology
Process Process Service innova on &
Client profiling, Innovaon collec ve intelligence
tailoring & experience plaorms

Governance
(Environmental, Social &
Governance Values)

Fig. 2 PPTG Framework. Source: Author

Baeck, 2020). For this reason, recent studies proposed digital corporate responsibility to
guide ethical dilemmas related to AI technology (Lobschat et al., 2021). There are also
ethical and security risks when service bots impersonate humans (van der Aalst et al.,
2018), since they may make improper judgements due to contextual changes that may
remain undetected, leading to unintended consequences. For instance, service bots may
make poor-quality recommendations that do not align with customer interests or may
expose customers to vulnerable and risky situations (Mullainathan & Obermeyer, 2017).
Service bots require service audits to prevent poor service quality outcomes. Service
bots also have excessive access and privileges that place them at risk of cyber-attacks.
The ethics and risk officer may assist in safeguarding data using surveillance methods to
detect intelligent malware.16 Research has found that customers are more likely to act
unethically and misbehave (LaMothe & Bobek, 2020) when interacting with service bots.
Therefore, service bots need to be monitored to detect and prevent these infringements.
In Fig. 2, PPTG is improved with technologies for process value configuration. Tech-
nology with people allows for smart analytics on service value capture and optimisation.
For example, service staff, key accounts managers and digital developers in Solutioncorp
evaluate customer service data to identify priority areas for AI innovation (Sjödin et al.,
2021). This dispersion of emerging technology gives rise to a disruptive landscape in the
knowledge economy, necessitating more R&D and continual business model innovation.
The three overarching themes from the constructs presented in Table 3 are innovation,
sustainable business models and value creation, which will be discussed further below.

16
Intelligent malware is AI-based and exploits vulnerabilities by mimicking normal user behaviour to avoid being
detected.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 13 of 27

Fig. 3 Innovation Continuum. Source: Author

Innovation continuum
The rapid pace of the evolution in technology innovation accelerates the diffusion
of innovations (Rogers, 1995). The increased R&D in innovation creates a continuum
(Fig. 3), where companies are not statically classified according to their degree of inno-
vation but rather placed on a continuum. Those businesses that recognise innovations’
relative advantages, compatibility and trialability (Rogers, 1995) will move to the higher
end of the continuum. Although, a high-innovation company may not remain a dis-
ruptor in the market if it becomes complacent or myopic with its innovation strategy
and neglects to continuously improve its business processes. This complacency can be
explained by the icarus paradox, where success may lead to a path of convergence with
an emphasis on the same strategies, which may simplify and desensitise divergent evolv-
ing demands (Elsass, 1993; Miller, 1990). Past successes promote a defensive mindset
and overconfidence, resulting in the persistence of the same strategic formulas when
executing innovative strategies is the most appropriate response (Sewpersadh, 2019b) to
the market’s changing needs. Thus, this paradox may lead to myopia, complacency and
inertia. This complacency leads to a condition of ‘unconscious incompetence’, where the
lack of knowledge of the availability of advanced technologies leads to suboptimal deci-
sion-making or decision paralysis on deploying such technologies. For this reason, the
degree of innovation is bidirectional on the innovation continuum, which allows for the
acceleration and deceleration of innovation investment. As business models transition
from traditional to transformative ones, eventually evolving into disruptive ones, those
with myopic capabilities soon find their business models antiquated. When companies
intensify their investment in innovation, they adopt a futurist strategy allowing them to
transition up the innovation continuum and challenge complacent companies.
Rogers (1995) cautioned that insufficient knowledge, inability to predict conse-
quences or overzealous innovation investments might lead to over-adoption. Also, the
complexity or incompatibility of innovations may not be suitable for some businesses,
which may jeopardise their positioning on the continuum. For this reason, governance
structures, such as a digitalisation committee, are important for moderating the firm’s
adoption strategy. This committee will assess the suitability, acceptability, feasibility and
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 14 of 27

sustainability of developing or acquiring innovations. Integrating stakeholder networks

in collaborative activities creates trust-based relationships, legitimacy and good govern-
ance that allows for the acceptability of innovations. In Fig. 3, governance optimisation
is vital for ensuring value-maximising decision-making concerning value-creating activi-
ties for all stakeholders (Sewpersadh, 2019a).
There could also be a reluctancy to allocate resources for R&D due to a digital para-
dox (revenue growth is not as expected despite the proven growth potential) (Gebauer,
et al., 2020). For these reasons, value creation and governance optimisation are unidirec-
tional factors in Fig. 3 and are placed on the high end of the continuum, where disrup-
tive business models operate. Governance is essential to moderate the negative effects of
an over-adoption, complex or incompatible innovations and the digital paradox. Good
governance is also critical for balancing trade-offs when making strategic decisions. For
instance, harmonising the need for legally protected intellectual assets for profit maxi-
misation and sustainability with knowledge sharing to build collaborative networks.
Central to the innovation process is the need for firms to create and acquire “new com-
binations” of knowledge. Based on the resource-based theory, complementary assets
and capabilities are scarce but valuable strategic resources, since they have strong path
dependencies that are difficult to imitate (Barney, 1991), thus shaping the firm’s compet-
itive advantage in the cooperative network. Since companies compete in a capital-inten-
sive space, with barriers to entry and economies of scale, profits may be achieved with
the legal protection of competitive advantages, such as closed innovation. Closed inno-
vation is the internal research within a particular company that is generally protected by
patents, so that access to that innovation is controlled by the rightsholder (Chesbrough,
2003). Progressively, open innovation has become a way in which key resources are
obtained for the development and execution of innovation (Chesbrough, 2003, 2011).
Open innovation is a means of sharing costs, ideas, synergies and skills (Chesbrough &
Crowther, 2006) from value networks to co-create innovation rather than an individual
company outlaying capital to conduct R&D from scratch. For this reason, in Fig. 3, the
networking capabilities of a company also follow the direction of its innovation policy
due to the collaborative work with extended networks that allow for the acquisition of
external knowledge. As innovation diffuses, collaborators within forged networks stimu-
late newer co-created innovations with superior outcomes.
A significant limitation to knowledge sharing is the disclosure of internal knowledge to
external collaborators (Cassiman & Veugelers, 2002), commonly referred to as the risk
of knowledge leakage (Gans & Stern, 2003) or the “paradox of openness” (Laursen &
Salter, 2014). This paradox describes the fundamental tension between knowledge shar-
ing (value creation) and knowledge protection (value appropriation) in open innova-
tion. Open innovation may increase the imitation tendency of mimetic companies, who
benefit from incurring fewer costs and inefficiencies with access to extended networks.
Therefore, a company’s position on the continuum and its competitive stance in the
industry depends upon its ability to remain at the technological forefront. Consequently,
open innovation also poses significant governance challenges to monitoring, controlling,
and managing intellectual property rights in enterprise innovation (Graham & Mowery,
2006). Hence, risk-averse companies usually have linear business models with a uni-
lateral dependency on internal resources. This tendency to be an information hoarder
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 15 of 27

lends itself to a closed innovation competitive stance. For this reason, the company’s risk
strategy must also be considered, since innovation pioneers may be more risk-tolerant
than those with more traditional business models. As newer, more revolutionary tech-
nologies become available, static business models with poor networks risk being on the
low end of the innovation continuum. Companies that have failed to keep at the fore-
front of technology do not have sustainable business models and may lose their extended
networks.

Sustainable business models

The diminishing competitiveness of traditional business models (McGrath, 2010)
has led to a fundamental rethinking of the firm’s value proposition for new prospects
(Bock et al., 2012) on refining how an existing product or service is provided to the
customer (Velu & Stiles, 2013). Reconceptualising structural elements for technology
and resource capitalisation to create new activity frameworks and networks aimed
at clear value propositions is known as business model innovation (Battistella et al.,
2017; Hamel, 2000; Helfat et al., 2007). Therefore, business model responsiveness
becomes a critical success factor in addressing challenges in the knowledge economy.
A business model’s alignment and coherence should be mutually reinforcing and
incorporate a response to the concomitant influence of contextual factors (Dehning
& Richardson, 2002; Melville et al., 2004; Schryen, 2013) and lag effects on firm per-
formance (Schryen, 2013). The responsive business innovation model, in Fig. 4 is a
hybridisation of prior value models with interlinkages to current service technolo-
gies employed in the market, including digital platforms, crowdsourcing, blockchain,
crowdworking, big data and service bots.
Figure 4 ascribes to Santos et al. (2015), where the model is more about “how is it
being done?” than “what is being done? It incorporates an iterative strategy that maps
cross-functional relationships between innovations and the underlying activities to be
responsive to the evolving economic environment. Large corporates often use share
centre services to support their network of firms under a GBS structure. However,
with the evolution of AI, the GBS structure can evolve into a digital platform business
model. A responsive business innovation model focuses on facilitating interactions
across many shared centres by providing a governance structure and a set of stand-
ards, so that they operate as one cohesive ecosystem. It is an activity system with
interconnected and interdependent activities to satisfy the market’s perceived needs
(Foss & Saebi, 2018).
The responsive business innovation model enables the acquiring, developing, and
integrating of key resources to overcome inertia. Introducing a new business model
into an existing organisation is challenging and may require a separate organisational
unit to redefine and reconfigure the model. For example, General Electric (GE) expe-
rienced business model transformation conflicts when they tried to adopt digital ser-
vitisation. There were conflicts between digital and physical service offerings, new
ecosystem partnerships and traditional supply chain relationships, digital revenue and
product sale models (Moazed, 2018). For this reason, positioning a Centre of Excel-
lence (COE) is important, since it can provide the organisational structure, methodol-
ogy, skills, tools and governance framework for handling the future innovation needs
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 16 of 27

Contextual Factors (Market, Industry & Country-specific Factors)

Lag Effects of Automated Investments

Fig. 4 Responsive Business Innovation Model. Source: Author

of a large global corporate (SSON, 2018). A GBS structure includes a COE for higher
level business support and specialist work and thus is incorporated in Fig. 4. COE
comprise of a centralised specialist team to promote collaboration and provide higher
value services, resulting in economies of scale. COEs focus on agility,17 CRM and tal-
ent development while standardising and automating cross-function end-to-end pro-
cess ownership), resulting in reducing costs and harnessing process efficiency (SSON,
2018). Examples of these are procure-to-pay (supply chain and accounting) and hire-
to-retire (HR and accounting. The positioning of the GBS is better placed by groups
of talent (area of expertise) rather than location, function or lowest costs.
The CRM literature provides a framework to delve into human motivations concern-
ing their buying incentives, biases and emotional connections. For this reason, CRM is

17
Agility can be described as a dynamic process of anticipating or adjusting to trends and customer needs without
diverging from the company vision (Fartash et al., 2012).
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 17 of 27

at the heart of the business model with AI differentiators (McAfee et al., 2012; Payne
& Frow, 2005; Stringfellow et al., 2004) that responds to evolving consumer behaviour
and expectations. The deep knowledge of consumers’ emotional and functional needs
allows businesses to optimise capital to address those needs. This strategic response to
customer needs and experience requires standardisation (lower costs, benchmark ser-
vice quality) and differentiation (premium service). For instance, businesses could stand-
ardise business processes through RPA for efficiency gains but personalise services via
service bots for market differentiation.
Service bots are key components of a digital strategy for entities searching for innova-
tive and cost-effective means to build closer customer relationships (Artificial Solutions,
2020). With a GBS structure, the service bots may need to be multilingual due to the
diversified client base. Furthermore, by integrating with social media (shown in Fig. 4),
service bots can access clients’ online data and learn their preferences, sentiments, out-
looks and proclivities. The data from clients’ online presence are often undervalued, but
access to this enables businesses to transcend beyond basic business intelligence. There-
fore, the service bot’s initial customer interaction will offer a superior service through
seamless verification of personal information (similar to the Facebook sign-up process)
and quick information transfer through hyperlinks. A seamless trail of conversations can
be achieved whenever users swap from device to device (cross-platform18), since this
practice improves engagement and customer fulfilment (Artificial Solutions, 2020). The
increased customer engagement means more actionable and enriched data to train ser-
vice bots to personalise the customer’s experience. In so doing, service bots can service
customers more competently and cost-effectively without human error (Artificial Solu-
tions, 2020; Kiat, 2017).
A limitation of service bots is that humans can notice tone and subtext in a way that
a service bot could never master. This disparity calls for cross-functional collaboration
between service bots and higher skilled humans, transitioning toward blended work-
forces. Data-centric CRM harness the potential of big data to focus on not only the func-
tional but also the deeper psychological aspects of buying behaviour (Stringfellow et al.,
2004). Access to client data is essential for value creation (Paiola & Gebauer, 2020) to
improve existing services and create novel innovations (Opresnik & Taisch, 2015) within
the confines of privacy laws. Automating customer interaction with service bots (see
Fig. 4) allows for a higher degree of message personalisation without increasing person-
nel costs. In-depth analysis of unstructured conversational data conveys perceptions on
what is done well or what can be improved by the business to develop market differen-
tiators for a strategic competitive advantage. Smart analytics, such as sentiment analysis,
support businesses in gauging their customers’ mindsets19 and analysing the customer’s
journey more effectively while remaining within the confines of data safety legislation.
Strategy guides and shapes by including the company’s brand reputation, Fig. 4. The
iterative CRM engagement strategy and value outlook (short, medium and long term)
is built from big data collected from the AI-led CRM and crowdsourcing from their

18
Cross-platforms recognise inter-relationships and complimentary services through different software applications and
devices.
19
Mindset is the attitudes and norms that either inhibit or encourage people’s or firms’ decisions.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 18 of 27

networks. This process allows companies to leverage their large network of end-users to
inform the co-created products, services and experiences. A large network also provides
microwork opportunities through crowd-working platforms for comprehensive support
and supplement human labour. However, managing the trade-offs between stakeholders,
technology, and societal benefits is important. Stakeholder engagement is essential in
identifying key stakeholder requirements for these benefits to occur. Accordingly, busi-
ness models should recognise and incorporate environmental, social and governance
(ESG) goals, whereby trade-offs must be managed. For instance, automation disrupts
the human capital leverage model, in which a trade-off exists between harmonising the
prospective savings from automation and the human impact of job losses. Due to the
escalation of global warming, business models must also incorporate innovative sustain-
able environmental solutions (Carayannis et al., 2020). Therefore, innovations must be
expanded beyond service innovations to ESG innovations.
In Fig. 4, the benefits of using blockchain technology in a business model are also
presented. Blockchain represents an endlessly accumulating list of records stored in
“blocks” protected using cryptography principles (Arnaut & Bećirović, 2020). The peer-
to-peer protocol ensures unambiguous and common ordering of all transactions in
blocks, a process that guarantees consistency, decentralisation, integrity and auditability
(Arnaut & Bećirović, 2020; Yuan & Wang, 2018). These features make the blockchain’s
permanent ledger resistant to data manipulation, which is a value contribution to the
company.
Value creation
A business model’s lifecycle involves “periods of specification, refinement, adapta-
tion, revision and reformulation” (Morris et al., 2005 pg.732). The business model’s ini-
tial period in the lifecycle has a process of trial and error, where core decision-making
delimits the firm’s evolution. For this reason, a value creation cycle is essential to harness
a sustainable competitive advantage by continuously refining, adapting, revising and
reformulating a business model to counteract the limitation of becoming static. In Fig. 5,
the importance of the continual assessment of the contextual factors, and the suitability
thereof, feed into the value creation cycle necessitating the need for change. However,
the suitability of this change must be assessed in terms of the company’s contingencies.
Research is necessary for informed decision-making on whether the change is incre-
mental versus transformative to reap all the benefits and value that innovations offer.
For value creation, the decision-making process should be free from bias and consider
the business’s ESG values, goals, and trade-offs. It is also important to be cognisant that
there is a time lag before benefits can be realised. A value architecture may also assist in
alleviating some of the trade-offs, particularly structuring a digitalisation committee.
The value architecture (Osterwalder & Pigneur, 2010), presented in Fig. 6, allows a
responsive business innovation model to capture and create market activation to build
the deep, compelling experiences customers desire with service-related products.
However, there is a need to balance the trade-offs between conflicting value drivers.
For instance, costly R&D may have environmental consequences that conflict with the
desire to provide a good return on capital. For this reason, a clear value preposition is
the first step in the value architecture. A value preposition is the underlying economic
logic explaining how value is delivered to customers at the appropriate cost (Magretta,
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 19 of 27

Fig. 5 Value creation cycle. Source: Author

Fig. 6 Value Architecture. Source: Author

2002). The building blocks of value proposition, configuration, delivery and capture
(Osterwalder & Pigneur, 2010; Osterwalder et al., 2005) must be considered to develop
a sustainable competitive advantage for the organisation (Teece, 2010). While the value
preposition remains customer centred, the value configuration and capture are focused
on relational selling using technological innovations. While the value delivery is focused
on efficiency and service optimisation using service innovations.

Conclusion
With the global environment moving so swiftly, multidisciplinary research is necessary
to condense and intensify business knowledge. This study highlights the need to examine
the discontinuous shift in the scope and culture of business models by exploring inter-
disciplinary streams of literature. An analysis of the recent literature revealed a lack of
research fusing automated technologies in the business models of CRM-intensive com-
panies. This study bridged the theoretical frameworks of organisational theories to learn
how contingent characteristics influence the design and function of business models. A
key contribution was the inclusion of structural elements (GBS, CRM and AI) to design
a responsive business innovation model to create, deliver and capture value. It was estab-
lished that AI-led CRM in a GBS structure yields a greater focus on generating innova-
tive services that satisfy customers’ emerging needs as well as balance ESG goals. Instead
of just customers just being consumers, they can be strategic networks to collaborate
and co-create outcomes by integrating CRM and AI technologies into a GBS structure.
Global businesses must update their cost focussed models to transcend into the
digital age by moving forward on the innovation continuum model and refocus-
sing on customer-centric service innovations to thrive in this evolving environment.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 20 of 27

An over-reliance on past successful formulae and static business models leads to the
eventual demise of AI-complacent companies. A prime example was seen during the
COVID-19 pandemic when some businesses adapted swiftly to the enforced lockdowns
using more digital avenues of earning revenue, while others failed to advance up the
innovation continuum and closed their businesses, resulting in the loss of millions of
jobs. The COVID-19 pandemic is not the only crisis faced by the global economy, since
there have been other life-threatening epidemics, such as the Zika virus, MERS, Swine
flu, SARS, Aids and Ebola. Businesses need to adapt to the ever-changing environment
with cognitive flexibility and agility to transform their business in the wake of any crisis.
Structures such as the COE may assist companies in averting the risk of unconscious
incompetence in respect of evolving AI and place them at the forefront of the innovation
continuum for sustained viability. Static business models can use existing digital plat-
forms to enhance their services, enabling them to move up the innovation continuum.
These businesses will have collaboration and co-creation opportunities from the large
networks on the high end of the innovation continuum.
This article illustrated the benefits of AI, specifically how service bots can assist in
creating new and improved business models in business-to-business and business-to-
consumer markets with CRM adoption. Since service bots are a market differentiator,
businesses at the forefront of service innovation are assured of resilience, even when
faced with the threat of a pandemic. Service bots use real-time data to predict and influ-
ence customer behaviour, preferences, buying incentives, and spending tendencies. The
un-leveraging of the human capital model has accelerated at an unprecedented level
amid the COVID-19 pandemic and is foreseen as being at its most impactful in the post-
pandemic period. The effects of AI technology on the human capital leverage model
vary depending upon humans’ skills set. AI technology is negatively associated with low-
skilled workers but significantly positively influences highly skilled workers.
Multinationals have better opportunities than single-country competitors to experi-
ment with various business models in different geographies and then transfer those
validated models to all geographies in which they can capture value (Teece, 2014). In
the digital transformation era, customer-centricity and global marketplace competition,
shared services have evolved from outsourcing to in-housing/re-shoring a GBS model
for developing a single and consistent approach to providing internal customer services
across functions and geographies. For GBS to stay at the forefront of service delivery
development and remain competitive, GBS leaders must leverage and scale these new
technologies. GBS’s global reach and governance, standardised processes, extended busi-
ness process ownership and use of consistent operating models and technologies make
them ideal candidates for implementing and delivering the aforementioned AI arbitrage
benefits for their operations. This study has illustrated the tremendous strides made
in AI technologies, whereby AI investment does not comprise resource-depleting dis-
bursements but encompasses intangible assets through which the system autonomously
learns and continually advances. These digital avenues provide key market differentia-
tors in customer service.
Management cannot rely exclusively on in-house expertise and needs the benefits
of mechanisms, such as crowdsourcing and crowdworking, to create a comprehen-
sive sustainable business model. However, regulators need to be wary of the potential
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 21 of 27

ramifications of crowdsourcing and crowdworking, since opportunistic companies may

exploit these platforms for cheap labour. Blockchain must be considered when propos-
ing disruptive models due to its revolutionary potential. As businesses move to scale
their digital ingenuities, a focus is placed on the agility to respond to consumers’ evolv-
ing tastes with diminishing lag times due to the availability of real-time data.
Inevitable changes in business models are necessary as organisations shift how they
create, capture and deliver value. For these reasons, this study developed key value driv-
ers grounded in the theoretical framework. The key findings of this article are the vari-
ous conflicting trade-offs between value drivers and ESG goals in digital business models
that require executives to harmonise. Some examples of these trade-offs were:

• the societal impacts of human job losses conflict with the efficiency and cost benefits
of cognitive automation,
• the utilisation of customer conversational data conflicts with remaining within the
confines of data protection legislature,
• the cost of software intrusion detection systems to avoid losing confidential data
conflicts with the desire to maintain profitability margins,
• the cost of innovation R&D conflicts with the desire to provide a good return on
capital, and
• the standardisation of processes conflicts with the customisation of services to avoid
the loss of strategic competitive advantage.

This study identified governance as a key mechanism in managing ethical issues

and risks. Concerns about consumer privacy may cause governments to prevent some
important innovative developments in global services (World Trade Organization, 2019).
Data security is a crucial concern for any business due to security risks when handling
customers’ personal information. For example, in 2018, Facebook was guilty of invad-
ing users’ personal data and giving this information to other large corporations, such as
Amazon, Microsoft and Spotify, to increase Facebook’s users and revenue (Dance et al.,
2018). Although regulatory user protection laws exist, businesses must employ cen-
tralised data management with cognitive analytics capabilities, encryptions, independ-
ent security audits and codes of practice. Personal identifiable data is a highly valuable
commodity in the digital age but is also unsafe, since any data breaches will result in
customers losing trust. Kelley (2019) recommends that a successful security protocol is
to program service bots to identify personal and/or sensitive information and treat it
accordingly. Systems must be able to anonymise or pseudonymise conversational data,
replacing identifiable data with placeholders, so users can still understand the intent for
analytics purposes but not know the customers’ identity (Kelley, 2019). Despite the chal-
lenges of surveillance and privacy issues, digital technologies are increasingly central to
people, organisations and societies (Flyverbom et al., 2019). For instance, the UK gov-
ernment has invested more than £1 billion into an AI industrial strategy (Berditchevs-
kaia & Baeck, 2020), thus, illustrating that some countries have grasped the opportunity
to build value-added resiliency into a service delivery model.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 22 of 27

Recommendations
Companies should be aware of their business model lifecycle to avoid becoming stagnant.
Therefore, it is recommended that they adopt a responsive business innovation model
with a value-creating cycle to continuously refine, adapt, revise and reformulate their busi-
ness model. To achieve this, companies should also have an innovation strategy driving a
customer-centric service innovation culture while reducing costs and leveraging the finest
skills. Organisations should consider establishing a COE with an innovation leader to be at
the forefront of innovative technologies.
The COE would seize, assess and manage cognitive automation technologies for data gov-
ernance. The COE is vital for providing leadership, driving change, and influencing business
strategy and multiple onboard stakeholders across the business. COE’s essential function is
driving an automation strategy as follows:

a. Develop an iterative strategy to extend and expand existing capabilities through

automation.
b. Drive a holistic AI-enabled disruptive operating model, similar to the model pro-
posed in this article, that is cost-efficient and leverages ‘fit-for-purpose’ technology to
inspire ‘out-of-the-box’ thinking and nurture an entrepreneurial ethos.
c. Incorporate and harness a digital platform strategy management that accelerates the
rate of digital platforms to realise cost savings and drive resiliency.
d. Initiate regular consolidating and mapping of business processes to identify areas of
duplication and labour-intensive processes for an automation analysis to appraise
potential benefits.
e. Create an AI-intensive GBS with an effective COE to use cognitive automation tech-
nologies in customer-centric service delivery.
f. Ensure CRM focuses on new customer onboarding forms and data-driven methods.
g. Benchmark against industry and competitors to ensure that the company’s technol-
ogy has a competitive advantage.
h. Create consistent and frequent communication channels between COE and those
charged with firm governance.
i. Design a data governance model to determine control and direct the use of data (how
and for what purpose).
j. Create guidelines on data protection, privacy, intellectual property rights and ethical
issues in data management.

It is also highly recommended that the public sector employs AI-intensive technolo-
gies, specifically RPA and service bots, that can streamline business processes. This sec-
tor’s work is extremely labour intensive, which is inefficient and resources depleting,
given the recent rise in digital technologies. The large burden placed on taxpayers to
supplement the ever-increasing public sector budgets is not met with improved out-
comes. Lower level public officials’ mundane and repetitive work, such as capturing
information from one system to another, using ineffective reporting templates and man-
ual month-end tasks, are time-consuming, costly and widen the margin for human error.
The public sector is also continuously dealing with fraud, tender bribes and schemes that
impair its ability to deliver public services efficiently. The employment of digital agents
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 23 of 27

can improve and expedite these laborious, inefficient and frustrating processes and, even
more importantly, alleviate fraud to some degree.

Future research agenda

This study focused on the value of service innovation technologies in responsive busi-
ness innovation models. However, there is an abundance of future research explorations
in the list below, which is not exhaustive.

Service bots

• Research that empirically tests the customers’ satisfaction journey with digital work-
ers versus human workers, particularly from a customer demographic perspective.
For instance, NLP has made strides in making service bots more humanlike. How-
ever, there needs to be research that interrogates which customer demographics are
more amenable to service bot services and which are not. Furthermore, research
needs to be conducted on service bots’ ability to match their customers’ evolving
needs.
• There should also be studies examining the emotional consequences on customers
when their needs are addressed by service bots, particularly from a customer demo-
graphic perspective and any potential extensions to service bot biases.
• Research examining customers’ concerns over privacy and data leakages and which
service bot interactions are more likely to trigger these concerns.
• Investigations into the potential impact on the company reputation/brand when
faced with negative service bot interactions and biases, amongst others.
• Research investigating potential trust or control issues when customers and employ-
ees rely on work performed by service bots.

Public service sectors

• As with institutional theory, government intervention is also necessary for a func-

tional digital ecosystem concerning infrastructure and access to funding and invest-
ment resources. Studies should investigate government funding structures to encour-
age more innovative R&D.
• An appraisal of the public sector’s readiness for the digital transformation of their
business model, since automated processes will result in societal benefits of service
efficiency and tax savings for citizens.
• An empirical study on the suitability of a GBS innovation model for the external
audit service. Due to the nature of their service, there is potential for a suitable fit.
Sewpersadh J ournal of Innovation and Entrepreneurship (2023) 12:2 Page 24 of 27

Open source/collaborative technologies

• An investigation into the use of open innovation systems and collaborative platforms
in assisting start-up companies with their digital transformation.

Abbreviations
AI Artificial intelligence
CIO Chief information officer
COE Centre of excellence
COVID-19 Coronavirus disease 2019
CRM Customer relationship management
ERP Enterprise resource planning
ESG Environmental, social and governance
GBS Global business services
IT Information technology
OECD Organisation for economic co-operation and development
NLU Natural language understanding
NLG Natural language generation
NLP Natural language processing
RPA Robotic process automation
R&D Research and development
Service Bot Service robot
Softbots Software robots

Acknowledgements
None.

Author contributions
This study results from the Author’s interest and contributions.

Funding
There is no funding attached to this research.

Availability of data and materials

Freely available using online research databases.

Declarations
Competing interests
There are no conflicts of interest to report.

Received: 19 May 2021 Accepted: 4 November 2022

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