Value in a Digital World: How to Assess Business Models and Measure Value in a Digital World

An in-depth examination of the concept of value in a digital world, an analysis of a range of digital business models and a framework for assessing the value of digital businesses.

Assessing the value of traditional business was easy. There are hard, well tested metrics and tangible, measurable assets you can literally kick the tyres of. But how do you measure the value of something that consists of little more than bits of information, brand awareness and a compelling idea?

In the winner takes all digital world how do you know if this idea is one that will attract billions of dedicated users or a few thousand fleeting trialists?

And, most importantly, how do you assess whether any given business model is robust enough to make billions or flawed in a way that will lose millions?

Lopez Lubian and Esteves look at what economic value means in a digital world, and argue for a shift from traditional value metrics to digital value metrics. Through high profile case studies they examine the process of valuation in the digital world – examining the challenges of making objective judgments from subjective information and how to assess the value of data.

Next they analyse in depth a number of different digital business models from the perspective of delivering value to investors, stakeholders and society at large. Finally they present a framework model for assessing value in digital business.

About the Authors

Francisco J. López Lubián is a professor and Head of the area of finance at IE Business School and an expert in financial valuation and analysis. He combined this teaching career with an intense career in business as a financial analyst at Hewlett-Packard, controller for the Sarrió Group, financial director for Sarrió Tisú and general financial director for the Isolux Group. Professor López Lubián regularly contributes to leading newspapers, including the Financial Times, and for the last five years has collaborated with Actualidad Económica journal and Expansión newspaper to publish the ranking of value creation for the shareholder.

José Esteves is Professor of Information Systems at IE Business School. He has a wealth of experience in the corporate world as an information systems analyst and consultant for companies such as Ciba-Geigy and Sonae Group and is chair of eGovernment Software AG- Alianza Sumaq. In addition to his research and teaching, Professor Esteves continues to act as a consultant to a number of companies saying: "Consulting provides fieldwork, data and results because, without examples, it’s all just theory. So it’s a cycle - consulting, research and then applying it in the classes."