Technology Describe And Improve Your Business Model

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Here the slides for the talk I am giving at an event organized by Enterprise Ireland. I am quite honored to speak together with Prof Henry Chesbrough, author of Open Business Models... He is opening the conference with his talk, while I am concluding.

Text of Describe and Improve your Business Model

How to Describe and Improve your Business Model Openinnovation, Dublin, 24 Oct 2007 Arvetica, September 2007
photos are from flickr under a creative commons license - authors are referenced in the comment section
IBM Global CEO Survey Business model innovation matters and it is a top priority of CEOs
How Do We Describe Business Models Today?
Going to War without a Map Karl von Clausewitz (~1800)
Insufficiently Well Here CEOs 10 Managers 60 Here Staff 360 Ok
The Result
Could it Be Different?
It Exists in Business Process Modeling
A Management Toolbox for Business Model Design and Innovation
A Template to Describe Business Models 42941 downloads
Describe a Business Model: 9 Building Blocks CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE
Example: Bizner Bank CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS entrepreneurs automatized relationship BizBallance (integrated banking and accounting) monthly fee Reeleezee IT infra mgmt account mgmt, transactions, etc. IT infrastructure, marketing, partnership costs DISTRIBUTION CHANNELS Web KEY ISSUES TO SOLVE IT, accounting, banking
Xerox 914 Business Model CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE large companies transactional sales team 1 time sales fee photocopiers R&D manufacturing regular large companies lease high-end photocopiers sales teams lease & 4ct per copy (2k+) financing & billing
Multis Example REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS total remanufacturing solutions of high end IT platforms manufacturing long term deep integration brand manufacturers customers base manufacturing IT brand manufacturers sales commission re-marketing inventory management systems knowledge manage secondary supply chain reverse logistics manufacturing inventory sales team brand manufacturers of high end IT platforms flat fee
The Process
find a way to play poker to unlock these models Prof Henry Chesbrough, Berkeley
5 Steps to Business Model Design & Renewal
- describe existing business model
- assess strengths and weaknesses
- brainstorm on improvements & opportunities
- turn new model into a project roadmap
1 2 4 3 VISUALIZE ASSESS RENEW PLAN 5 IMPLEMENT
- implement project roadmap
Visualize
Visualizing
Visualizing Amazon.com
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon.com warehousing & distribution distribution content management product selection product search marketing affiliates
Assess, Design & Renew
good ideas are widely distributed, nobody has a monopoly on innovation Prof Henry Chesbrough, Berkeley
Assessing Amazon.com
- where are some of Amazon.coms highest costs located?
- what are some of Amazon.coms core competencies ?
- how could they leverage these competencies ?
- how could they leverage investments ?
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon.com warehousing & distribution distribution content management product selection product search marketing affiliates
Leveraging IT at Amazon.com
REVENUES COSTS KEY ISSUES TO SOLVE ACTIVITIES PARTNERS RELATIONS OFFER CLIENTS CHANNELS selling stuff on the Web IT infra automatized relationships mass customer data services Amazon.com data grid partners selling stuff Amazon S3 Amazon.com Internet API Web2.0 companies warehousing & distribution distribution content management product selection A9 product search data storage fees product search search engine revenues e-commerce sites Internet marketing affiliates
Changing the Business Model: Examples
Building on Existing Customer Relationships: Walmart Clinics CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE shoppers frequent relationship Walmart Clinics health services medical knowledge and staff
Changing the Game: Cirque de Soleil CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE theater & opera visiitors artistic circus without lions stage & manage spectacle & logistics create art & atmosphere higher ticket prices
Demand-Creating Alliances: Intel Processor Platform CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES PARTNER NETWORK REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE end users speedy processors partners with ever heavier applications
Planning & Implemention
Introducing a Family Office Service through a Partnership CLIENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS CLIENT SEGMENTS OFFER COST STRUCTURE CLIENT RELATIONSHIPS CLIENT SEGMENTS COMPETENCIES, ACTIVITIES, RESOURCES REVENUE FLOWS DISTRIBUTION CHANNELS KEY ISSUES TO SOLVE affluent clients (100k-1+mio) tight personal relationships branches & bankers local private banking mainly product revenues ultra high net worth individuals family office services revenue sharing agreement local branch of family office tight relationships with UHNWI PARTNER NETWORK PARTNER NETWORK independent multi-family office
Project Roadmap OFFER CLIENT RELATIONSHIPS CLIENT SEGMENT ACTIVITIES PARTNER REVNUE STREAMS ACQUISITION CHANNELS family office services UHNWI relationships UHNWI client trust, internal cooperation mutli-family office partner revenue sharing relationship managers & new office design collaboration process training program develop marketing material internal concept presentation generate prioritized prospect list work out client presentation establish acquisition learning process relationship manager collaboration process team set-up client reception area profit center set-up set-up CRM tool
the only thing thats not designed is nature Dave Kelly, IDEO
business people dont just need to understand designers better; they need to become designers Roger Martin, Dean Rotman School
Thank You
www.arvetica.com business-model-design.blogspot.com
Alexander Osterwalder
- Before joining Arvetica Alex founded Business Model Design, a consulting boutique specialized in business model innovation. Besides consulting the private sector he was also involved in building up a globally active NGO based in Thailand in the field of knowledge management, HIV/AIDS and malaria. Prior to consulting, Alex worked at the University of Lausanne, as an entrepreneur in the banking sector and as an online journalist for the major Swiss business magazine BILANZ. He holds a PhD and Masters degree of the HEC Business School of the University of Lausanne, Switzerland. Alex is an active member of the IMD based Open World Initiative (OWI).
Waster Water Treatment Example
offer customer segment revenue stream distribution channel waste water treatment system Canadian mining sites one