Search Results for: business model

Building Networks with Business Models: Two approaches that will help you to understand and improve your value network

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<p>In an earlier posting we addressed <a href=”http://www.bizzdesign.com/blog/7-applications-of-the-business-model-canvas/”>7 applications of the Business Model Canvas</a>. Sure, we can agree that the Business Model Canvas is very useful for establishing, evaluating and reinventing businesses. But we should not only highlight the countless possibilities of it for a single enterprise. We need to synthesize our understanding of Value Chains and the Business Models and look for the next level of analysis: Value Networks.</p><p>In this blog we will highlight a less addressed aspect from the Business Model Canvas that is rooted in Value Network thinking. There are multiple methods and even tools that support the analysis of Value Networks which is regarded as the collaborations, interactions, and exchanges between business actors. You might have heard or read about <a href=”http://www.amazon.com/Mobile-Service-Innovation-Business-Models/dp/3540792376″ target=”_blank”>STOF</a> and <a href=”http://e3value.few.vu.nl/” target=”_blank”>e3-value</a>. But apart from academic research, Value Networks are less represented in practical settings today. Why? Because of the rapidly increasing complexity of Value Networks – soon we lose track when we think about relations between multiple actors involved in our business such as suppliers, customers, governments, partners, NGO’s. Therefore in this blog we will explain how the simplicity of Business Model Canvas can be used to highlight Value Networks. We discuss an external network approach as well as a more internally oriented network approach.</p><h3>The network is the challenge</h3><p>Imagine a pension fund with three business units – one for asset management, one for customer advice and a third one for customer relationship management and administration – that attempts to broaden its service offerings. We can use the Business Model Canvas to guide this effort. First, we establish the pension fund’s current Business Model Canvas. Then we formulate our goal – which is to broaden the current service offerings. Step by step we elaborate desired Business Model Canvases that include different new service offerings. Finally we selected the most feasible Business Model Canvas for implementation. Business as usual – except that until now we have limited ourselves to only the Business Model Canvas of the pension fund.</p><div class=”captionImage leftAlone” style=”width: 561px;”><img class=”leftAlone” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/business-model-canvas-pension-fund.png” alt=”Business Model Canvas pension fund” title=”The main goal is to reach our customers, provide them with our value proposition, and get paid” width=”561″ height=”417″/><p class=”caption”>three main elements of the business model canvas: key partners, enterprise and customers</p></div><p>Although external elements like key partners (1) and customers (3) are included in the Business Model Canvas, at the end of the story the emphasis is on the business model of a single enterprise (2). It seems that key partners are just there to be included in our Business Model Canvas. We also take customers for granted. The main goal is to reach our customers, provide them with our value proposition, and get paid.</p><p>Today more than ever, an isolated view on an organization is not feasible. We are not suggesting that the Business Model Canvas only provides an isolated view. Instead, we want to add some additional support to the Business Model Canvas to broaden and deepen its application from the perspective of Value Networks. This support comes in the form of a Networked and an Aggregated Business Model Canvas.</p><h3>The chained network approach</h3><p>Lets think about the pension fund example again. In addition to the single enterprise view of the Business Model Canvas we should also consider the canvases of our partners and customers for broadening our service offerings. That way we will be able to highlight the interactions of the pension fund and its actors for the sake of the pension fund and its actors –so basically focusing on the Value Network instead of a single company in order to retrieve additional insights that might not be highlighted through a single Business Model Canvas.</p><p> </p><div class=”captionImage leftAlone” style=”width: 600px;”><img class=”leftAlone” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600210-canvases-of-partners-and-customers.png” alt=”chained network approach” title=”Does the entire Value Network benefit from newly offered services of the pension fund?” width=”600″ height=”210″/><p class=”caption”>consider the canvases of our partners and customers for broadening our service offerings</p></div><div class=”captionImage leftAlone” style=”width: 561px;”><div class=”captionImage leftAlone” style=”width: 561px;”><span style=”font-size: 11px;”>By representing the Value Network through Networked Business Model Canvases we could answer new questions like: How can we broaden our service offerings through the current Value Network? What improvements can we implement? Does the entire Value Network benefit from newly offered services of the pension fund?</span></div></div><p>Now we are able to involve our partners as well and benefit as a group from the applications of the Business Model Canvas by:</p><ul><li>considering the potential improvement for all value network actors;</li><li>identifying (un)equal distributions of risks, costs and profits for actors based on changes in the value network;</li><li>and using the capabilities and knowledge of all actors to improve the value network;</li><li>Address opportunities of <a href=”http://en.wikipedia.org/wiki/Disintermediation” target=”_blank”>disintermediation</a> concerning removal of intermediaries from a value chain;</li><li>Apply (elements of) the unbundling pattern (page 62), concerning specialization. In commoditizing markets successful organizations focus on either Product Innovation, Customer Relationship Management or Infrastructure Management. Also see <a href=”http://www.amazon.com/Discipline-Market-Leaders-Customers-Dominate/dp/0201407191″ target=”_blank”>Tracy &amp; Wiersema’s value disciplines</a> and <a href=”http://en.wikipedia.org/wiki/Porter_generic_strategies” target=”_blank”>Porter’s generic strategies</a>.</li></ul><h3>The aggregated network approach</h3><p>In addition to a networked Business Model Canvas we can also establish an aggregated Business Model Canvas for the pension fund. Think about the individual business units that are part of the pension fund. While customers may perceive the pension fund as one entity, business units could be independent in terms of their financial performances. Each business unit operates independently and is responsible for own results and achievements. However, because all business units are part of the same pensions fund, the might be using each other’s assets, serve similar customers and share similar partners. Actually a customer could be advised by one business unit on his savings and investment plans, while the same investments could be managed by the assets management business unit. Along the process the customer wants to experience being served consistently by one organization – the pension fund – instead of separate business units. Providing such consistency is obviously important for the pension fund and its business units. But how can they start addressing related issues? And all business units have other internal and external customers as well….</p><p>That is when the aggregated Business Model Canvas comes into play. First we need to establish the individual Business Model Canvases of the pension fund and its business units. Then we need to examine the relations between building blocks across the network by connecting the Business Model Canvases.</p><p> </p><div class=”captionImage leftAlone” style=”width: 600px;”><img class=”leftAlone” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600219-Aggregated-Business-Model-Canvas.png” alt=”aggregated Business Model Canvas” title=”Along the process the customer wants to experience being served consistently by one organization instead of separate business units” width=”600″ height=”219″/><p class=”caption”>The aggregated business Model Canvas asks more questions</p></div><p>Again this allows us to answer additional questions like: How can we improve our corporate business model? Is each business unit aligned properly with the corporate organization? What similar partners are used by the different business units? Do we collaborate sufficiently to provide consistent service quality to our customers? Where are opportunities for synergy?</p><p>Now we are able to understand our internal model and consider our business models as complementary parts of the same aggregated model. Benefits of applying this internal network approach are:</p><ul><li>Aligning the whole with its parts</li><li>Learn from each other: using the capabilities and knowledge of all actors to improve the network</li><li>Understand and learn how costs and value creation are distributed throughout the organization in more detail then seen when only creating an enterprise view</li><li>identifying (un)equal distributions of risks, costs and profits for business units based on changes in the value network;</li><li>Understand and manage differences in the business unit’s business models</li><li>Understand and benefit from synergies between the different business models</li></ul><h3><span style=”color: #e3004a; line-height: 14px;”><span style=”color: #e3004a;”><span style=”line-height: 14px;”>Conclusions and advice for applying business model networks in practice</span></span></span></h3><p><span style=”color: #e3004a; line-height: 14px;”><span style=”color: #e3004a;”><span style=”line-height: 14px;”> </span></span></span>Supported by the alternative application suggestions of het Business Model Canvas discussed above, we recommend you to:</p><ol><li>Establish your current business model canvas</li><li>Establish the business model canvases of your internal and external customers</li><li>Establish the business model canvases of your internal and external partners and suppliers</li><li>Interconnect and aggregate the business model canvases</li><li>Assess the effectiveness of the network in term of experienced pain and gain by each partner</li><li>Elaborate opportunities to improve the networks performance as a whole</li><li>Work out these opportunities by following each dependency relation through the network, taking into account pains and gains addressed by each actor in the network</li><li>Establish an integrated implementation plan for the whole</li><li>Establish detail implementation plans for each partner</li></ol><p>Whether the additional Business Models concern internal or external customers and partners, in both cases you will benefit from the additional insights – you will improve your understandings of your own business model as well as the business models of your stakeholders and together you will be able to identify improvement opportunities in your value network. At the end of the day no business operates on its own. Every organization has to collaborate to different extends with multiple actors. Trends that are already here to stay, and trends that should be on your agenda today, all underline the importance of collaboration and require insight in your network. Supply chain management, co-creation, open innovation, knowledge sharing, social enterprise, big-data, predictive analytics.<br/><strong><em>“Understanding your business model is only a first step in understanding your value network.”</em></strong></p><p>We look forward to helping you achieve your goals in the new, networked, normal!<br/>BiZZdesign organizes <a href=”http://www.bizzdesign.com/training/business-model-management/”>training on Business Model Innovation</a> in London (UK), Brussels (BE) and Amersfoort (NL – <a href=”http://www.bizzdesign.nl/training/business-model-management/”>see our Dutch website</a>). More about BiZZdesign’s Business Model Management services, examples and a reference to recent webinars on this subject can be found <a href=”http://www.bizzdesign.nl/consultancy/business-model-management/”>here</a>. Feel free to download the <a href=”http://www.bizzdesign.com/tools/business-model-canvas-module/”>free trial version of our Business Model Canvas tool</a> from our website.</p><p> </p><p> </p>

The Project Business Model SWOT

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This post is the sixth in a series of ten about real life experiences of using business model thinking as a foundation for planning and delivering change. Writing this post I’ve had the help of a true friend and admirable colleague (Eva Kammerfors) whom I’ve shared many of the referred to business model experiences with. […]

7 ways to present your business model

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<p><span style=”color: #505050; font-size: 11px; line-height: 19px;”>One of the main challenges for business model innovation and business model implementation is communication. We need to get the message to the right people in a way they understand, that they like and that they can move forward with.</span></p><p>We introduced the <a title=”Blog: Business Models: Do the right thing” href=”http://www.bizzdesign.com/blog/business-models-do-the-right-thing/#Do the right thing vs doing the things right”>Business Model Canvas</a> (Osterwalder, 2009) as a useful tool for describing how a business creates, delivers and captures  value. We described how to apply it in practice and how analyzing the model helps you answering several questions regarding whether and how your organization is, or will be, viable and valuable. In this posting, we will describe different ways of communicating business models. Several ways of presenting will be described, addressing different goals regarding the communication of your business model.</p><p><span style=”font-size: 11px; line-height: 19px;”>We re-use the case of a coffee-cup company, called Nextpresso  that we introduced in aour earlier posting on </span><a style=”line-height: 19px;” title=”Blog: Business Models: Do the right thing” href=”http://www.bizzdesign.com/blog/business-model-analysis-with-the-business-model-canvas/#Do the right thing vs doing the things right”>Business Model Analysis</a><span style=”font-size: 11px; line-height: 19px;”>. We will present several possibilities for presenting business models using the tool </span><a style=”font-size: 11px; line-height: 19px;” title=”Tool for business model canvas creation” href=”http://www.bizzdesign.com/tools/business-model-canvas-module/#Business model canvas software”>BiZZdesign Business Model Canvas Software Tool</a><span style=”font-size: 11px; line-height: 19px;”>. Using a tool for Business Modelling is useful since the model  is created and stored in a central place, reducing the risk of miscommunication and maximizing the effect of collaboration. Furthermore, communication is made easier through publication functions (html, word, pdf-posters), making the business model better accessible.</span></p><h3>Stakeholders, views and viewpoints</h3><p>There are various questions to ask yourself before you start communicating about a business model. Of course you need to understand your stakeholders, preferably in person, so you know their preferences. If you do not know your intended stakeholder in person, it’s always harder to make an engaging view. Do what you can to understand their role and what is typically in focus for this role. An important challenge is to leave out unnecessary details and make it simple…</p><p>Obviously, what you present in the business model itself may vary. For instance leave out or add details or use coloring to distinguish AS-IS from TO-BE elements. You may want to select only some elements to show and zoom in on the relations between two or three parts of the business model. Another option is to present certain analyses, as we refer to in our posting on <a style=”font-size: 10.909090995788574px; line-height: 19px;” title=”Blog: Business Models: Do the right thing” href=”http://www.bizzdesign.com/blog/business-model-analysis-with-the-business-model-canvas/#Do the right thing vs doing the things right”>Business Model Analysis</a>.</p><p><span style=”font-size: 11px; line-height: 19px;”>The two most important communication questions of all:</span></p><p>-        <strong><em><span style=”text-decoration: underline;”>What is my communication goal?</span></em></strong></p><p>-        <strong><em><span style=”text-decoration: underline;”>What will make the most sense to my audience? </span></em></strong></p><p><a style=”font-size: 11px; line-height: 19px;” title=”solve complex problems with simple pictures” href=”http://www.thebackofthenapkin.com/”>Dan Roam</a><span style=”font-size: 11px; line-height: 19px;”>’s so called </span><a style=”font-size: 11px; line-height: 19px;” title=”back of the napkin the book” href=”http://www.danroam.com/the-back-of-the-napkin/”>SQVID-exercise</a><span style=”font-size: 11px; line-height: 19px;”> (click on “5 focusing questions”) is a simple tool that helps you to make decisions on this!</span></p><p><span style=”font-size: 11px; line-height: 19px;”>Communication to various stakeholders in your organization requires view mechanisms and various presentation options. Most of the 7 ways to present your Business Model, are generated with BiZZdesign software.</span></p><h2><span style=”font-size: 11px; line-height: 19px;”>7 ways to present your business model</span><em style=”font-size: 11px; line-height: 19px;”> </em></h2><h3>1.     Business Model as art</h3><p>If your idea is great, it has to look great. If you want to go to an Angel Investor or want to convince your first customer, everything you can do to impress them should be done. You never get a second change to make a first impression. Graphical work or drawings are a great way to make more happening then just your content on post-its would have done.</p><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Approach</span></p><p>First you make a business model and decide what is your goal and target audience. Second your go out and find yourself a great artist with a good sense for business. Her will make a prototype that you test with one person of your target audience.  If they like it, you finalize. Make it look exclusive and don’t make too many copies. It’s art! Be aware that aiming for the best looking model can be time consuming.</p><p><strong style=”font-size: 11px; line-height: 19px;”><span style=”text-decoration: underline;”>Example</span></strong></p><p><strong style=”font-size: 11px; line-height: 19px;”><span style=”text-decoration: underline;”> </span></strong></p><div class=”captionImage left” style=”width: 600px;”><strong style=”font-size: 11px; line-height: 19px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/Business-model-communication-art.png” alt=”Business Model Canvas Communication” title=”Business Canvas Pepijn Barnard” width=”600″ height=”588″/><p class=”caption”>Business Model Canvas illustration <span style=”font-size: 11px; line-height: 19px; font-weight: normal;”>(by </span><a style=”font-size: 11px; line-height: 19px; font-weight: normal;” title=”Business Model Canvas” href=”http://www.pepijnbarnard.nl/102838/588757/illustration/business-model-canvas”>Pepijn Barnard</a><span style=”font-size: 11px; line-height: 19px; font-weight: normal;”>)</span></p></strong></div><p><strong style=”font-size: 11px; line-height: 19px;”> </strong></p><p> </p><p>Another graphical approach can be found here (in Dutch). Sketching and drawing also can be a good way to represent your business model. <a title=”Business Model Canvas Nespresso” href=”http://businessmodelsinc.files.wordpress.com/2009/10/nespresso_businnes_model.png”>This drawing</a> looks very similar to our Nextpresso example. <a title=”Business Model Canvas Amazon” href=”http://4.bp.blogspot.com/_NS021FqASSU/SoQDzijbZTI/AAAAAAAAAGE/rDqyeTwFVgo/s1600-h/Sellaband_Business_Model.png”>This</a> one is quite busy, but holds a lot of information.</p><h3>2.     Posters</h3><p><em>Pdf-posters</em> do very well in hallways and your office. It will be inviting to react on such a poster and it fosters discussions. Posters are very useful in ‘proclaiming the gospel’ and generate ideas on how to create new gospels.</p><p> </p><div class=”captionImage left” style=”width: 440px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/Business-model-communication-pdf-poster.png” alt=”Business Model Canvas Communication PDF Poster” title=”Business Canvas Pepijn Barnard” width=”440″ height=”315″/><p class=”caption”>Communication about your business model canvas by creating a poster</p></div><p><span style=”text-decoration: underline;”>Approach</span></p><p>Looks are everything! Presenting your business model in a beautiful design makes it inviting to look at – and react upon. Therefore, make sure to use clear statements, easy-to-read fonts and a high resolution. After looks, speed is a good second. Generating the poster right after the high-energy workshop session keeps everybody enthusiastic. Location is key! Hang the poster close to those that made it, since you might want to explain elements or give some guidance to discussions that pop-up in front of the poster.</p><p><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>3.     Pitch presentation</span></p><p><em>Output using dynamic export to .ppt</em> enables you to present your model and take your audience through the story from customer problem, via value proposition and revenue streams to key activities, resources, partners and costs.</p><p> </p><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600455-business-model-canvas-powerpoint.JPG” alt=”Business model canvas powerpoint” title=”You can export your business model canvas as a Powerpoint format” width=”600″ height=”455″/><p class=”caption”>Business model canvas exported to Powerpoint</p></div><p><span style=”text-decoration: underline;”>Approach</span></p><p>After exporting your business model to a PowerPoint-presentation, you can customize the lay-out of your slide-deck. Use the house style of your company (to-be). Try using the endless possibilities in PowerPoint to substantiate your story and the point you want to make. <a title=”Ted talk Simon Sinek” href=”http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.htmll”>Start with why!</a> In the customer problem lies the reason you exist.</p><p><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>4.     Simple cut and paste</span></p><p>By inserting a representation in documents or presentation in software like MS office tools, you can present (parts of) your Business Model Canvas in other documentation to clarify your message, substantiate choices or share and generate ideas.</p><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Approach</span></p><p>Typically in a business plans a business model is expected. Also in project plans a business model will clarify the context. We advise not to trough the canvas direct in your audience’s face, but build it up, step by step.</p><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Example</span><span style=”font-size: 11px; line-height: 19px;”>: </span><span style=”font-size: 11px; line-height: 19px;”>You know </span><a style=”font-size: 11px; line-height: 19px;” title=”Wikipedia: cut-copy-past” href=”http://en.wikipedia.org/wiki/Cut,_copy,_and_paste”>crtl-c, ctrl-v</a><span style=”font-size: 11px; line-height: 19px;”>…. we don’t think that this needs an example.</span></p><p><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>5.     Intranet pages</span></p><p><em>Output in html</em> is suitable for communicating your business model via the public company website, intranet, etc. Via intranet, employees have easy-access to the fundamental aspects of their organization.  Partner with whom you collaborate on realizing your business model can als o be a potential target audience. A benefit is that you audience will only see those details, that they are interested in, by simply clicking on the boxes.</p><p> </p><div class=”captionImage left” style=”width: 600px;”><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600316-Business-model-communication-html-output.png” alt=”Business model canvas in HTML” title=”How you can export your business model canvas as a HTML format” width=”600″ height=”316″/><p class=”caption”>Business model canvas settings for export to HTML</p></div></div><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600320-business-model-canvas-HTML-report.JPG” alt=”Business model canvas in HTML” title=”You can export your business model canvas as a HTML format” width=”600″ height=”320″/><p class=”caption”>Business model canvas exported to HTML</p></div><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Approach</span></p><p>Before generating an HTML-report, think about the goal of your report. What should your report consist of? What will your starting page look like? A cascading stylesheet helps to simply generate a intranet page in your companies house style.</p><p><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>6.     Word-reports</span></p><p><em>Generating an RTF-report for MS Word</em>, to present models that contain a lot of  information, in which the documentation of the model is included in the report. Presenting the canvas itself is in most cases sufficient. However, when a lot of documentation is used to substantiate choices, this function is very useful for communicating this rationale behind your business model.</p><p> </p><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600315-Business-model-communication-link.png” alt=”Business Model Canvas Communication PDF Poster” title=”Business Model Canvas RTF report” width=”600″ height=”315″/><p class=”caption”>Communication about your business model canvas by creating a RTF report</p></div><p><span style=”text-decoration: underline;”>Approach </span></p><p>We advise A3 landscape to present canvas models to keep element readable. After generating an RTF report for MS Word, it is important to customize the report.  The documentation is reported in tables, intended to improve the readability and analyzability of the business model and it’s documentation. Make sure this will be the case for your model, since big models come with big communication challenges! As for HTML-reporting, several settings can be adjusted in the BiZZdesign Business Model Canvas tool. </p><p><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>7.     Implementation view e.g. using ArchiMate 2.0</span></p><p>A business model typically is a starting point for implementation. Implementations are about finding the first customer, pivoting the model  and eventually get your processes and supporting IT in place. <a title=”Consultancy Enterprise Architecture” href=”http://www.bizzdesign.com/consultancy/enterprise-architecture-management/eam-consultancy/#Do the right thing vs doing the things right”>Enterprise Architecture</a> is a proven instrument to help you in this journey. Transforming the ‘post-its’ in your Business Model Canvas into implementation concepts, e.g. using <a title=”ArchiMate for Enterprise Architecture” href=”http://www.bizzdesign.com/consultancy/enterprise-architecture-management/archimate/#Do the right thing vs doing the things right”>ArchiMate 2.0</a>, will help you translate your value propositions (and the way you intend to deliver these propositions to your customers) into your architecture models. The generated concepts can be added to your architecture repository and used to build roadmaps that will guide you from your AS-IS state, to your TO-BE state. BiZZdesign Business Model Canvas Software offers the possibility to generate architecture models from your business models and keeps track of relations and changes. Typically Enterprise Architects, Business Architects and project managers are interested in these views.</p><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Approach</span></p><p>There is a standard mapping between canvas concepts and architecture concepts. You might want to adjust this by choosing from the concepts that your company has agreed to use, for instance in conventions. You can adjust the ‘implementation concept’ per ‘post-it’. Then you simply generate a set of architecture concepts (processes, applications, business interfaces, actors) that will form the basis for the implementation models.</p><p><span style=”font-size: 11px; line-height: 19px; text-decoration: underline;”>Example:</span></p><p> </p><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600442-business-model-canvas-example.png” alt=”Business Model Canvas Communication PDF Poster” title=”Business Model Canvas Example” width=”600″ height=”442″/><p class=”caption”>Communication about your business model canvas by creating a RTF report</p></div><p><span style=”color: #e3004a; font-size: 12px; letter-spacing: 1px; line-height: 15px; word-spacing: 1px;”> </span></p><h2>Conclusions and next steps</h2><p>We described multiple ways to present a Business Model. Presenting your business model can foster discussions and improves the exchange of ideas. It is important to have everybody on the same page, before you go into implementation mode. Referring back to your original idea is of key importance. The artistic approach is great, but time consuming. Tooling is a useful aid in communicating your business model, making all kinds of communication and views easy. Feel free to share in your thoughts and suggestions on alternative presentations from your practice.</p><p>BiZZdesign organizes<a title=”Training Business Models” href=”http://www.bizzdesign.com/training/business-model-management/#Do the right thing vs doing the things right”> training on Business Model Innovation</a> in London (UK), Brussels (BE) and Amersfoort (NL – <a title=”BiZZdesign the Netherlands” href=”http://www.bizzdesign.nl/training/business-model-management/”>see our Dutch website</a>). More about BiZZdesign’s Business Model Management services and a reference to recent webinars on this subject can be found <a href=”http://www.bizzdesign.com/consultancy/business-model-management/bmm-consultancy/#Do the right thing vs doing the things right”>here</a>.</p>

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Business Model Innovation: connecting innovation with implementation

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<p style=”line-height: 18.99147605895996px;”><span style=”font-size: 11px; line-height: 19px;”>As BPM, BA or EA professional, you help to optimize implementation of change and operations. Your focus is: </span><strong style=”font-size: 11px; line-height: 19px;”>Doing the things right!”.</strong></p><p style=”line-height: 18.99147605895996px;”>Today we see clients struggle with the question: “<strong><a title=”Blog: Business Models: Do the right thing” href=”http://www.bizzdesign.com/blog/business-models-do-the-right-thing/”>Are we doing the right things</a>?” </strong>Your customers, partners and competition demand that flexibility is the standard. Innovation of who you are, what markets you are in and how you make money in these markets become relevant issues! It is time to reinvent your business model! Relate your communication and implementation work to a common view of your current and future business models.</p><p style=”line-height: 18.99147605895996px;”>In this energetic <a title=”Blog: Business Models: Do the right thing” href=”http://www.bizzdesign.com/about-bizzdesign/events/business-model-innovation”>one hour webinar</a> we present the following topics:</p><ul><li>Business Model Canvas</li><li>Innovation</li><li>Relations to Enterprise Architecture, BPM and Business Analysis</li></ul><div><div class=”captionImage left” style=”width: 411px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/Doing-the-right-things-vs-doing-the-things-right.png” alt=”Doing the things right vs doing the things right” title=”Is it time to reinvent your business model?” width=”411″ height=”309″/><p class=”caption”>Business Model innovation webinar</p></div></div><p style=”line-height: 18.99147605895996px;”><span style=”font-size: 11px; line-height: 19px;”>This webinar about Business Model Innovation will take place at the 19th of march at 17:00 (CET) and is set-up by BiZZdesign North America, but can be attended by people worldwide. </span><span style=”font-size: 11px; line-height: 19px;”>For more details about this webinar and registration, please send an email to <a title=”E-mail Ericka” href=”mailto:e.aguilera@bizzdesign.com”>Ericka Aguilera</a></span><a style=”margin: 0px; padding: 0px; border: 0px; font-family: inherit; font-style: inherit; font-variant: inherit; line-height: inherit; font-size: inherit; vertical-align: baseline; text-decoration: none;” title=”BiZZdesign North America” href=”mailto:e.aguilera@bizzdesign.com” target=”_blank”>, </a><a title=”BiZZdesign office North-America” href=”http://www.bizzdesign.com/contact/north-america/#BiZZdesign North-America”>BiZZdesign North-America</a></p><p style=”line-height: 18.99147605895996px;”>More <a title=”Blogs by Remco Blom and Tim Vehof” href=”http://www.bizzdesign.com/blog/serviceline/business-model-management”>blogs about Business Model Management</a> can be found here!</p>

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The Project Business Model Timeline

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This post is the fourth in a series of ten about real life experiences of using business model thinking as a foundation for planning and delivering change. Writing this post I’ve had the help of a true friend and admirable colleague (Eva Kammerfors) whom I’ve shared many of the referred to business model experiences with. […]

Business Model Analysis with the Business Model Canvas

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<p><span style=”color: #505050; font-size: 11px; line-height: 19px;”>In an earlier blogpost </span><span style=”color: #505050; font-size: 11px; line-height: 19px;”>we described the issue of ‘doing the things right’ vs. ‘doing the right things’. In that blogpost we introduced the </span><a style=”font-size: 11px; line-height: 19px;” title=”Blog ‘Business Models: Do the right thing'” href=”http://www.bizzdesign.com/blog/business-models-do-the-right-thing/”>Business Model Canvas</a><span style=”color: #505050; font-size: 11px; line-height: 19px;”> (Osterwalder, 2009) as a useful tool for describing how a business creates, delivers and captures value.</span></p><p>In this posting, we will elaborate on Business Models, introducing the subject of Business Model Analysis. We will describe the rationale for doing analyses and present different possible techniques using the case of Nextpresso, a virtual coffee-cup company. The example model is included, in a trial version of our software. Download the trail version of the <a title=”Business Model Module” href=”http://www.bizzdesign.com/tools/business-model-canvas-module/”>BiZZdesign Business Model Canvas Software</a> to learn more about this Tool.</p><h2><span style=”color: #e3004a; font-size: 11px; line-height: 14px;”>Business Model Analysis</span></h2><div class=”captionImage left” style=”width: 600px;”><p>Analysis of business models answers questions concerning why and how a venture is, or will be, viable and valuable; After completing a Business Model Canvas for a current or future business Model, designers have questions such as:</p><ul><li>Where are our revenues coming from? </li><li>What value is delivered to which markets? </li><li>What costs are involved in delivering that value? </li><li>Are our perceived key activities and key resources as important for gaining revenues as we think they are? </li><li>If we change our model in a specific way, what are the effects?</li></ul><p>This requires insight in the elements of the business model, attributes of the elements and the relations between different elements. Results from analysing these elements, attributes and relations become the foundation for business model change and innovation in an organization. When conducting analysis on a business model, there are different perspectives to start from. In our example, each possibility for an analysis is done from a different perspective, answering a specific question.</p><h3>Case and tool introduction</h3><p>In this blog we will present different possibilities for analysis on the Business Model Canvas for a virtual coffee-cup company, Nextpresso. The Nextpresso machines brew espresso from coffee capsules, a type of pre-apportioned single-use aluminium container of roasted coffee with a variety of flavours. Nextpresso initially operates in the Dutch coffee market and intends to “cuppify” the traditional coffee world from there.</p><p><span style=”font-size: 11px; line-height: 19px;”>We will present several possibilities for analysis using the <a title=”Business Model Canvas tool” href=”http://www.bizzdesign.com/tools/business-model-canvas-module/”>BiZZdesign Business Model Canvas Software Tool</a></span><span style=”font-size: 11px; line-height: 19px;”>. Using a tool for Business Modelling is useful since the model is created and stored in a central place, reducing the risk of miscommunication and maximizing the effect of collaboration. Furthermore, communication is made easier through publication functions (html, word, pdf-posters), making the business model better accessible. Needless to say, this is quite important for models that describe how your company creates value. Especially in the case of Business Model Analysis, tooling can help identifying strengths and weaknesses through relating building blocks, and providing insight in cash flows by calculations. Finally, tools help you to work your way “downstream” from your high level business model, to more detailed implementation views e.g. process models, customer journey maps and enterprise architecture models.</span></p><h3>Business Model Canvas for ‘Nextpresso’</h3><p>The Canvas below presents the current business model of Nextpresso. As said, Nextpresso is a coffee-cup company, providing “Great espresso experiences at home and at the office”.</p><p><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600476-Business-model-canvas-for-Nextpresso.png” alt=”Business Model Canvas made for Nextpresso” title=”This Business Model Canvas was made for the virtual coffee-cup company Nextpresso” width=”600″ height=”476″/></p><div class=”captionImage left” style=”width: 600px;”><p class=”caption”>Business Model Canvas Nextpresso</p></div><h2><span style=”font-size: 1em; line-height: 19px;”>Comparison of business models</span></h2><p>If we enter a new market, how will this affect our revenues? If we stop providing certain services, will we decrease our costs? Why is the model of our competitor more successful than our model? Comparing different business models is useful in addressing such questions. The Nextpresso case provides a good example of such an analysis:</p><p><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600449-Business-model-canvas-for-Nextpresso-new.png” alt=”Business Model Canvas made for Nextpresso” title=”This Business Model Canvas was made for the virtual coffee-cup company Nextpresso” width=”600″ height=”449″/></p><div class=”captionImage left” style=”width: 600px;”><p class=”caption”>New Business Model Canvas Nextpresso</p></div><p><span style=”font-size: 11px; line-height: 19px;”>The Canvas represents the business model of Nextpresso according to the situation before the value proposition ‘Great espresso experience at the office’ was added. At first Nextpresso provided machines and cups for households only. One can see the differences in Customer Segments, Channels, Customer Relationships and Revenue Streams. When elements from the other business model would have been removed, one should have these elements indicated with red. While knowing these differences, Nextpresso can calculate the differences in revenues and costs before and after this change. In the next example, we will present an example of calculating these costs and revenues.</span></p><p><span style=”font-size: 11px; line-height: 19px;”>Typical usage of business model comparison addresses questions regarding GAP-analyses (difference between as-is and to-be models), analyses on optional changes to a business model and comparison of alternative business models for the future. (Note: the feature to compare business models canvasses is standard available in BiZZdesign-software from release 4.2 and up)</span></p><h2>Analyzing Revenues and costs</h2><p>What value do we deliver to which markets and what costs are involved in delivering that value? Where are our revenues coming from? What prices generate what sort of revenues? The ‘Costs and revenues’ function provides a useful way of addressing these questions. Organizations get a simple and clear oversight in the size of the markets they operate in, revenues per revenue stream and costs per cost structure. </p><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600122-Business-model-canvas-Nextpresso-cost-and-revenue.png” alt=”Business Model Canvas Costs and Revenues made for Nextpresso” title=”This Business Model Canvas Costs and Revenues was made for the virtual coffee-cup company Nextpresso” width=”600″ height=”122″/><p class=”caption”>Costs and Revenues. Business Model Canvas Nextpresso</p></div><div class=”captionImage left” style=”width: 531px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/Business-model-canvas-detailled-cost-structure.png” alt=”Business Model Canvas detailled costs structure made for Nextpresso” title=”This Business Model Canvas detailled costs structure was made for the virtual coffee-cup company Nextpresso” width=”531″ height=”278″/><p class=”caption”>Detailled costs structure. Business Model Canvas Nextpresso</p></div><p><span style=”font-size: 11px; line-height: 19px;”>For an overview of revenues and costs, specific information per Cost Structure and Revenue Stream serves as input:</span></p><p><span style=”font-size: 11px; line-height: 19px;”> </span></p><div class=”captionImage left” style=”width: 530px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/Business-model-canvas-detailled-marketing.png” alt=”Business Model Canvas marketing made for Nextpresso” title=”This Business Model Canvas marketing was made for the virtual coffee-cup company Nextpresso” width=”530″ height=”275″/><p class=”caption”>Marketing. Business Model Canvas Nextpresso</p></div><p align=”center”><span style=”font-size: 11px; line-height: 19px;”> </span></p><h2>Analyzing the customer relations</h2><p>In the Nextpresso case, management asks themselves: “Do we have different operating concepts for our segments ‘Households’, ‘Office users’ and ‘Companies’? Why? How many? Using the Customer Relations Landscape Map in BiZZdesign Architect, an answer to those questions can look like this:<span style=”font-size: 11px; line-height: 19px;”> </span></p><div class=”captionImage left” style=”width: 530px;”><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600202-Business-model-canvas-customer-relationships-landscape-map.png” alt=”Business Model Canvas detailled marketing made for Nextpresso” title=”This Business Model Canvas detailled marketing was made for the virtual coffee-cup company Nextpresso” width=”600″ height=”202″/><p class=”caption”>Detailled marketing. Business Model Canvas Nextpresso</p></div><div class=”captionImage left” style=”width: 600px;”><div class=”captionImage left” style=”width: 600px;”><span style=”font-size: 11px; line-height: 19px;”>If you want to know what operating concepts your organization has for different Product Market Combinations (PMCs), this Customer Relations Landscape Map can be of service. It is typically conducted by organizations operating in segmented markets, e.g. retail banking, where concepts for wealth management relations are very different from concepts for standard retail banking relations.</span></div><div class=”captionImage left” style=”width: 600px;”><span style=”font-size: 11px; line-height: 19px;”><br/></span></div></div><h2/><h2/><h2>Analyzing the channels</h2><p>If you want to analyze, in addition to standard PMCs, through what channels your value propositions are delivered to your market segments, the ‘Channels Landscape Map’ can be of service. With this matrix, organizations can get better insight in <em>how</em> they deliver value.<span style=”font-size: 11px; line-height: 19px;”> </span><span style=”font-size: 11px; line-height: 19px;”> </span></p><div class=”captionImage left” style=”width: 600px;”><img class=”left” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/_resampled/resizedimage600315-Business-model-canvas-channels-landschape-map.png” alt=”Business Model Canvas Channels made for Nextpresso” title=”This Business Model Canvas channels was made for the virtual coffee-cup company Nextpresso” width=”600″ height=”315″/><p class=”caption”>Channels. Business Model Canvas Nextpresso</p></div><p> </p><p>This Channels Landscape Map may be extended by mapping the Channels on different phases a customer is in (e.g. orientation, comparison, purchase, usage, complaint)</p><h2>Presenting your business model</h2><p>Communication to various stakeholders in your organization requires view mechanisms and various presentation options. BiZZdesign Architect provides many presentation options which we will discuss in a next posting.</p><h2>Conclusions and next steps</h2><p>We described types of analysis and we zoomed in on analysing the Business Model Canvas. Analysis of business models answers the question why and how a venture is, or will be, viable and valuable. Based on questions that represent perspectives on analyzing business models, the Nextpresso case shows different possibilities for conducting analysis. Tooling is a useful aid in business model analyses, making calculations and communication easy. Feel free to share in your thoughts and suggestions on alternative analyzes from your practice.</p><p><span style=”font-size: 11px; line-height: 19px;”>BiZZdesign organizes </span><a style=”font-size: 11px; line-height: 19px;” href=”http://www.bizzdesign.com/training/business-model-management/”>training on Business Model Innovation</a><span style=”font-size: 11px; line-height: 19px;”> in London (UK), Brussels (BE) and Amersfoort (NL – </span><a style=”font-size: 11px; line-height: 19px;” href=”http://www.bizzdesign.nl/training/business-model-management/”>see our Dutch website</a><span style=”font-size: 11px; line-height: 19px;”>). More about BiZZdesign’s Business Model Management services and a reference to recent webinars on this subject can be found </span><a style=”font-size: 11px; line-height: 19px;” href=”http://www.bizzdesign.nl/consultancy/business-model-management/”>here</a><span style=”font-size: 11px; line-height: 19px;”>.</span></p></div></div>

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The Project Business Model Results

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This post is the third in a series of ten about real life experiences of using business model thinking as a foundation for planning and delivering change. Writing this post I’ve had the help of a true friend and admirable colleague (Eva Kammerfors) whom I’ve shared many of the referred to business model experiences with. […]

The Project Business Model Profile

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This post is the second in a series of ten about real life experiences of using business model thinking as a foundation for planning and delivering change. Writing this post I’ve had the help of a true friend and admirable colleague (Eva Kammerfors) whom I’ve shared many of the referred to business model experiences with. […]

The Project Business Model

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This post is about real life experiences of using business model thinking as a foundation for planning and delivering change. The collection of these experiences have been a long slow journey started out in the early 90′s, experimenting with creating small businesses. During the last six years experiences from the field and theory has accelerated […]

Should Business Architects use the Business Model Canvas at the Program level?

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In the Open Group conference at Newport Beach, I listened to a series of presentations on business architecture.  In one of them, the presenter described his practice of using Osterwalder’s Business Model Canvas to create a model of his program’s environment after a business program (aka business initiative) is started.  He felt that the canvas is useful for creating a clear picture of the business impacts on a program.  There are problems with this method, which I’d like to share in this post. 

Let me lay out the context for the sake of this post since there is no business architecture “standard vocabulary.” 

A “business program” is chartered by an “enterprise” to improve a series of “capabilities” in order to achieve a specific and measurable business “goal.”  This business program has a management structure and is ultimately provided funding for a series of “projects.”  The business architect involved in this program creates a “roadmap” of the projects and to rationalizes the capability improvements across those projects and between his program and other programs. 

For folks who follow my discussions in the Enterprise Business Motivation Model, I use the term “initiative” in that model.  I’m using the term “program” for this post because the Open Group presenter used the word “program.”  Note that the presentation was made at an Open Group conference but it does NOT represent the opinion or position of the Open Group and is not part of the TOGAF or other deliverables of the Open Group.

The practice presented by this talk is troubling to me.  As described, the practice that this presenter provided goes like this: Within the context of the program, the business architect would pull up a blank copy of the business model canvas and sit with his or her executive sponsor or steering committee to fill it out.  By doing so, he or she would understand “the” business model that impacts the program. 

During the Q&A period I asked about a scenario that I would expect to be quite commonplace: what if the initiative serves and supports multiple business models?  The presenter said, in effect, “we only create one canvas.”  My jaw dropped.

A screwdriver makes a lousy hammer but it can sometimes work.  The wrong tool for the job doesn’t always fail, but it will fail often enough to indicate, to the wise, that a better tool should be found.

The Osterwalder’s business model canvas makes a very poor tool for capturing business forces from the perspective of a program.  First off, programs are transitory, while business models are not.  The notion of a business model is a mechanism for capturing how a LINE OF BUSINESS makes money independent of other concerns and other lines of business.  Long before there is a program, and long after the program is over, there are business models, and the canvas is a reasonable mechanism for capturing one such model at a time.  It is completely inappropriate for capturing two different models on a single canvas.  Every example of a business model, as described both in Osterwalder’s book and on his web site, specifically describe a single business model within an enterprise.

I have no problem with using business models (although my canvas is different from Osterwalder’s).  That said,  I recommend a different practice: If the business initiative is doing work that will impact MULTIPLE business models, it is imperative that ALL of those business models are captured in their own canvas.  The session speaker specifically rejected this idea.  I don’t think he is a bad person.  I think he has been hammering nails with a screwdriver.  (He was young).

Here’s where he made his mistake:

multistream value chain

In the oversimplified value stream model above, Contoso airlines has three business models.  The business owners for these three businesses are on the left: Bradley, Janet, and Franklin.  Each are primarily concerned with their own business flows.  In this oversimplified situation, there are only two programs, each with one project.  If the session speaker were working on the Plantheon program, his idea works.  there is only one business model to create.  That nail can be hammered in with a screwdriver.  Lucky speaker.  Showing Franklin his own business model is a good thing.

But if we are working on the Flitrack program, what do we show Franklin?  if we create a “generic” canvas that includes cargo, he will not recognize the model as being applicable to his concerns.  He will not benefit and neither will the program.  In fact, Franklin will think us fools because he had a presentation from Plantheon yesterday showing him an accurate model… don’t you people talk?

Program Flitrack should have one-on-one conversations with Bradley and Janet to develop their business models.  The business model that Franklin cares about does not need to be created again.  It can come out of the repository.  The Flitrack program would consider all three models as independent inputs to the business architecture of the organization impacting the program. 

Anything less is business analysis, not business architecture.