Transcript Technologies de l'information

The Business Model Ontology
a proposition in a design science approach
PhD Defense
February 4 2004
HEC/UNIL, Lausanne
Alexander Osterwalder
HEC Lausanne
[email protected]
http://www.hec.unil.ch/aosterwa
(+41 21) 692.3420
Université de Lausanne
HOME | AGENDA | FIN
A Short Reflection on Science
The origin of the word science comes from the Latin scire, which simply
means "to know."
observe
phenomena
Social or
natural
phenomena
© 2003, Osterwalder
develop
theory
explain
phenomena
test
theory
refute
theory
business model concepts 2
Université de Lausanne
HOME | AGENDA | FIN
A Short Reflection on Science - Story of the Village... An Analogy
Pressure to explore: fast
moving complex environment
with new threats and
opportunities (Outsourcing,
SCM, CRM, ...)
Search: New business models
& introduction of the concept of
business models as a new unit
of analysis (ad hoc, explorative)
Plan & Build: Instrumentalizing
the business model concept by
building tools on the basis of an
ontology
© 2003, Osterwalder
business model concepts 3
Université de Lausanne
HOME | AGENDA | FIN
Research Question
How can business models be described
and represented in order to build the
foundation for subsequent concepts and
tools, possibly computer based?
© 2003, Osterwalder
business model concepts 4
Université de Lausanne
HOME | AGENDA | FIN
Methodology: Design Science (March and Smith 1995)
RESEARCH ACTIVITIES
RESEARCH OUTPUT
Design Science
Build
Evaluate
BM Building
Blocks
Complete?
Model
BM Ontology
Fidelity with
Real World
Phenomena?
Method
XML
Appropriate?
Instantiation
BM2L
Applicable?
Construct
© 2003, Osterwalder
Natural Science
Theorize
Justify
business model concepts 5
Université de Lausanne
HOME | AGENDA | FIN
Main contributions
1. Update of the knowledge in the business model domain
2. Consolidation into a business model ontology
– Provide a specification of a conceptualization in the business model domain
3. Software tool prototype: Business Model Modeling Language BM2L
– A tool to capture and represent business models
4. Outlook on possible business model tools
– How can the business model concept be applied
5. Proposition of Business / Information Systems alignment tool
– Align in an environment underpinned by ICT and e-business
•
•
•
This is not about modeling the whole enterprise
It is not an attempt to explain business model success
The goal is not to re-write strategy.
© 2003, Osterwalder
business model concepts 6
Université de Lausanne
HOME | AGENDA | FIN
The Business Model Ontology
Partnership
Actor
Relationship
INFRASTRUCTURE
MANAGEMENT
Agreement
PRODUCT
Mechanism
CUSTOMER
INTERFACE
Capability
Value Configuration
Value Proposition
Channel
Customer
Resource
Activity
Offering
Link
Criterion
Cost
Profit
Revenue
Account
FINANCIAL
ASPECTS
Pricing
© 2003, Osterwalder
business model concepts 7
Université de Lausanne
HOME | AGENDA | FIN
The Nine Elements Compared to the Business Model Literature
Business model
ontology
Value
Proposition
Hamel
√
Linder and Cantrell
√
Target
Customer
√
Distribution
Channel
Customer
Relationship
Value
Configuration
√
√
√
√
√
√
Capability
√
√
Cost
Structure
√
Revenue
Model
√
√
√
Tapscott, Ticoll et
al.
Partnership
√
Afuah and Tucci
√
√
√
√
√
√
Gordijn
√
√
√
√
√
√
Petrovic, Kittl et al.
√
√
√
Weill and Vitale
√
√
√
√
√
√
√
√
√
Stähler
© 2003, Osterwalder
business model concepts 8
Université de Lausanne
HOME | AGENDA | FIN
Have we Made any Progress: Modeling Rigor
Mentioning Elements
© 2003, Osterwalder
Describing Elements
Modeling Elements
business model concepts 9
Université de Lausanne
HOME | AGENDA | FIN
Modeling Distribution Channels
Value Proposition
delivered
through
delivered
to
Distribution
Channel
Target
Customer
setOf
isA
Offering
isA
Distribution
Channel Link
•Reasoning
•Customer Buying Cycle
•Value Level
•Price Level
Actor
© 2003, Osterwalder
by
Partnership
Actor
Relationship
INFRASTRUCTURE
MANAGEMENT
Agreement
PRODUCT
Mechanism
CUSTOMER
INTERFACE
Capability
Value Configuration
Value Proposition
Channel
Customer
Resource
Activity
Offering
Link
Criterion
Cost
Profit
Revenue
Account
FINANCIAL
ASPECTS
Pricing
business model concepts 10
Université de Lausanne
HOME | AGENDA | FIN
Capturing Business Model Information
A model to...
–
–
–
–
Define
Seize
Describe
Store
unstructured
information
formalization
Semi –
structured
information
...the logic of what a firm does and how it
does it
bla
bla
Application
manager
© 2003, Osterwalder
formal model
seize
business model concepts 11
Université de Lausanne
HOME | AGENDA | FIN
2
Business Model with XML: Conceiving BM L
Name
Description
Use
Reasoning
Risk
Value
Proposition
Characteristics
ValuePropositionID
AddressesCustomerIDREF
BasedOnCapabilityIDREF
Computer-aided
business modeling
Effort
Value
Proposition
MeToo
Value
Level
Innovative
Innovation
Excellence
Innovation
Capability
Value Proposition
Target Customer
Name
Free
setOf
isA
Description
Use
Reasoning
Risk
Economy
Offering
Price
Level
Market
Life
Cycle
Effort
High
End
LifeCyclePhase
{Creation, Purchase, Use,
Renewal, Transfer}
MeToo
Offering
Characteristics
SetOf
Offerings
Innovative
Innovation
Offering
Excellence
OfferingID
Legend
Value
Level
SetOf
Offerings
Innovation
element
obligatory element
element
optional element
element
1 - n elements
Price
Level
sequence of
Life
Cycle
Free
Economy
Market
choice between
© 2003, Osterwalder
LifeCyclePhase
{Creation, Purchase, Use,
Renewal, Transfer}
High
End
business model concepts 12
Université de Lausanne
HOME | AGENDA | FIN
2
Application Prototype: The Business Model Modeling Language BM L
<Product>
<ValueProposition ValuePropositionID="vp1" BasedOnCapabilityIDREF="cp4 cp3 cp1"
AddressesCustomerIDREF="tc4">
<ValuePropositionCharacteristics>
<Name>MJF Concerts</Name>
<Description>The main attraction and VALUE PROPOSITION of the MJF are its prestigious concerts
with stars from jazz, pop, rock, hip-hop and more. The MJF has made itself a name with the regular by
unforgettable jazz musicians like Miles Davis, Keith Jarett, Charlie Mingus, Ella Fitzgerald and later
from other fields like Bob Dylan, Phil Collins or Guru's Jazzmatazz. The 2003 event featured artists
across the musical range, such as George Benson, Joao Gilberto, Simply Red or Cypress Hill.
</Description>
<Reasoning>
<Use>For the customer the value essentially lies in going to the concert of the artist of his
choice.</Use>
</Reasoning>
<ValueLevel>
<MeToo>The MJF may be special because of its quality but it is not substantially different from other
jazz festivals throughout the world.</MeToo>
</ValueLevel>
<PriceLevel>
<Market>The MJF ticket prices are comparable to the market prices of what is paid for other
concerts.</Market>
</PriceLevel>
</ValuePropositionCharacteristics>
© 2003, Osterwalder
business model concepts 13
Université de Lausanne
HOME | AGENDA | FIN
2
Application Prototype: Generating documents from a BM L document
BM2L
Document
BM2L
Schema
© 2003, Osterwalder
XSL
Processor
HTML
Document
e.g. a two page
overview of a
company’s business
model
PDF
Document
e.g. a ten page report
of a company’s
business model
Word
Document
e.g. a detailed n-page
description of the
company’s business
model
SVG
Document
e.g. a graphical view
of a business model
issue such as the
channel strategy
XSL Stylesheet
Document
business model concepts 14
Université de Lausanne
HOME | AGENDA | FIN
Montreux Jazz Festival Business Model
© 2003, Osterwalder
business model concepts 15
Université de Lausanne
HOME | AGENDA | FIN
Distribution Channel Strategy at the Montreux Jazz Festival
Value Proposition
delivered
through
delivered
to
Distribution
Channel
Target
Customer
setOf
isA
Offering
isA
Distribution
Channel Link
•Reasoning
•Customer Buying Cycle
•Value Level
•Price Level
Actor
© 2003, Osterwalder
by
business model concepts 16
Université de Lausanne
HOME | AGENDA | FIN
Value proposition, capabilities and customers at the MJF
Capability
Value Proposition
Attractive MJF venue
MJF concerts
Mobilize Volunteer Staff
MJF off
Target Customer
Festival visitors
Shops
MJF frequentation
Atmosphere & Experience
Sponsors
MJF sponsorship
Contract stars
Attract people
© 2003, Osterwalder
MJF recordings
MJF Brand & Franchise
Record, TV, artists
Franchisees
business model concepts 17
Université de Lausanne
HOME | AGENDA | FIN
Evaluating the Business Model Ontology
Compare ontology with
literature
Evaluate ontology by
practitioners
Letting managers and consultants pronounce
themselves on the ontology gives an indication on
its ability to describe the business logic of a firm.
Test ontology with case studies
Describing a real world business model through
the ontology's rigorous formalism tests its
applicability to a case.
Interest by the research
community
Observing the research community's interest in
the ontology demonstrates certain aspects of its
validity.
Evaluation
Test ontology in the field
Test ontology vs. other model
in the field
© 2003, Osterwalder
Positioning the ontology to the existing business
model literature shows which domains are
covered or not and is an indicator of
completeness.
Testing the ontology in the field would take place
indirectly through applying an instantiation of it
to a real-world business setting.
Testing two models' performance would also be
indirect by applying them to a real-world business
setting and compare the outcome.
business model concepts 18
Université de Lausanne
HOME | AGENDA | FIN
Compare with Literature
is the ontology complete?
Business model
ontology
Value
Proposition
Hamel
√
Linder and Cantrell
√
Target
Customer
√
Distribution
Channel
Customer
Relationship
Value
Configuration
√
√
√
√
√
√
Capability
√
Afuah and Tucci
√
√
Gordijn
√
√
Petrovic, Kittl et al.
√
Weill and Vitale
√
√
√
√
√
√
Cost
Structure
√
Revenue
Model
√
√
√
Tapscott, Ticoll et
al.
Partnership
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Stähler
have we made any progress?
© 2003, Osterwalder
business model concepts 19
Université de Lausanne
HOME | AGENDA | FIN
Semi-Structured Interviews with Practitioners
Question Domain
Questions on the use
of business concepts
& tools
Questions
How do you plan the general business objectives of your company? Do you use any conceptual
tools to plan your business or to sketch the general direction in which your firm is heading?
If yes, do you use any specific formalism(s) to do this?
use of concepts and
tools?
If yes, do you use any specific software tool to do this? If yes, which one(s)?
Demonstrations &
Explanation of the
Ontology
Questions on the
fidelity with real
word phenomena
easyJet.com, ColorMailer, Barnes & Noble, Nokia
In your opinion, what elements are missing in the model presented before?
In your opinion, what elements should not belong to the model presented before?
fidelity with real world
phenomena?
How could such a model help you define business indicators?
How could such a model help you or a group of managers make better decisions?
How could such a model improve some parts of strategic planning?
How could such a model make it easier to chose and design appropriate information systems
potential applications
(e.g. software purchases like Customer Relationship Management or Supply Chain
the business model
Management...)
How would it be able to foster innovation in a company with such a model?
of
concept and ontology?
How do you think such a model could improve business process design and engineering?
How could it be helpful to have such a model to communicate your business model. (when
making decisions, to communicate with employees)
Final discussion
© 2003, Osterwalder
Do you have any final comments?
business model concepts 20
Université de Lausanne
HOME | AGENDA | FIN
Interview Outcome
no
yes
q1
q2
q3
q4
q5
Software in the mobile industry
5
little
no
yes
q6
q7
q8
q9
Service over Internet
15
no
no
yes
q12
q13
Service in Finance
31
no
no
no
q16
q17
Internet Industry Platform
80
yes
no
yes
q18
Industry
400
yes
no
no
q22
Entertainment
101200
no
no
yes
3'315
no
no
yes
Consultant 1
yes
no
-
q32
q33,
q34
Consultant 2
yes
no
-
q39
q40
Consultant 3
yes
no
-
improving
communication
improving process
design
defining indicators
increasing innovation
trial & error
helping in the design
of ISs
use of tools
little
Transport
improving strategic
planning
use of concepts
3
q11
improving decision
making
employees
Retail over Internet
q10
q14
q15
q19
q20
q21
q23
q24
q25
ability to create a
transparent big picture
q26
creation of a commonly
understood language
q27
q28
q29
q41
q30
q31
q35
q36
q42
helps addressing
fundamental questions
q37
q38
q43
q44
green = positive answers, red = negative answers, grey = neutral answers, white = not answered q = quotes
© 2003, Osterwalder
business model concepts 21
Université de Lausanne
HOME | AGENDA | FIN
Case Studies & Use by Others
Company & industry sector
Company information
Logifleet – Fleet management systems provider
Swiss startup founded in 2002
Factory121 – personalized Swiss watch retailing over the Internet
Swiss startup founded in 2003
LeLivre –book retailing over the Internet
Subsidiary of book retailer Librairies La Fontaine SA
Closed interview questions rated between 1 and 5 (1 = very definitely not, 3 = to some extent, 5 = very definitely)
Swiss bookstore founded in 1984
Did the concepts exposed in the course "Stratégies et technologies de l'information" allow you to accurately describe
Subsidiary of Aleance (USA) founded in 2001
the business model of the company you analyzed?
Ellipse – bricks & clicks book retailing
NetMovies – DVD rental over the Internet
average
3.89
MNC – mobile phone services (SMS)
Swiss Telecom service provider founded in 1998
How closely do the elements of the sample document cover the aspects of the business model analyzed?
Adrenalink – sports marketing and management consultancy
Swiss consultancy
Was the concept "proposition de valeur" relevant to describe the business model you analyzed?
4.44
Phone-Plus – telecommunication services reseller
Belgian venture established in 1999
Was the concept "clients et canaux de distributions" relevant to describe the business model you analyzed?
3.78
ZenithVie – life insurance
Swiss company
Was the concept "relation-client et confiance" relevant to describe the business model you analyzed?
3.78
is the business model
concept applicable?
4
Was the concept "activités et compétence" relevant to describe the business model you analyzed?
3.89
Was the concept "partenariat" relevant to describe the business model you analyzed?
4.11
In your opinion is the business model concept useful?
4.33
fidelity with real world
phenomena?
appropriateness of the
building block concepts?
MyChocolat
© 2003, Osterwalder
business model concepts 22
Université de Lausanne
HOME | AGENDA | FIN
Montreux Jazz Festival Case Study
fidelity with real world
phenomena?
applicability of
ontology?
applicability of
prototype?
completeness?
© 2003, Osterwalder
business model concepts 23
Université de Lausanne
HOME | AGENDA | FIN
Further Research & Further Validation: Test in the Field
h1) A business model ontology based visualization tool can help
business practitioners more quickly understand a business
model and the relationships behind its elements.
h2) A business model ontology based tool creates a common
language to address business model issues an in this regard
improves communication between business practitioners.
h3) Discussing business model issues with a business model
ontology based tool (to understand business models) has an
impact on discussion quality.
© 2003, Osterwalder
business model concepts 24
Université de Lausanne
HOME | AGENDA | FIN
Exploring the Potential: Alignment
INNOVATION
GOALS
CUSTOMER
PROCESSES
FINANCE
STRATEGY
Balanced ScoreCard
Business
model
BUSINESS/ORG.
IT/IS
STRUCTURE
SYSTEMS
Infusion
PROSPECTOR
IS role
IS sourcing
IS structure
Alignment profile
© 2003, Osterwalder
Alliance
ANALYZER
Utility
DEFENDER
Importance of IT
Applications
-
+
Strategic
High
Potential
Key OP
Support
Strategic impact of IT
business model concepts 25
Université de Lausanne
HOME | AGENDA | FIN
Discussion?
THE END...
http://www.hec.unil.ch/aosterwa/PhD
© 2003, Osterwalder
business model concepts 26