UBC workshop January 9, 2004 Yves Pigneur Université de Lausanne [email protected] (+41 21) 692.3416 An ontology for defining e-business models

UBC workshopJanuary 9, 2004

Yves PigneurUniversité de Lausanne

[email protected](+41 21) 692.3416

An ontology for defining e-business modelsAn ontology for defining e-business models

© 2004 Pigneur

UBC January 2004 2

Université de Lausanne

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Agenda

• Introduction

1. Ontology– Value proposition– Customers, channels and relationship– Capabilities, activities and partnerships– Revenues and cost models

1b Computer-aided design

2. Research methodology– DESIGN SCIENCE

3. IT alignment

• Conclusion– Next: environment assessment …

Research with

Alexander Osterwalder, phd

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What is a Business Model anyway?

• A buzzword with no precise definition ?– […] Executives, reporters and analysts who use the term don't have a

clear idea of what it means. They use it to describe everything from how a company earns revenue to how it structures its organization

A business model is– the value a company offers to one or several segments of customers, and

– the architecture of the firm and its network of partners

– for creating, marketing and delivering this value and relationship capital,

– in order to generate profitable and sustainable revenue streams.

[Linder, 2000]

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Why a business model approach?

Business ProcessesInformation systems

Business Model

StrategyPlanninglevel

Architectural level

Implementationlevel

Conceptual architectureof a business strategy

e-Business Technology layer

• Positioning• Objectives & goals• Communication of strategy

Avoid re-inventing strategy

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Business/IT alignment

STRATEGYSTRATEGY

ORGANIZATIONORGANIZATION TECHNOLOGYTECHNOLOGYFUNCTIONAL INTEGRATION

STRATEGIC FIT AUTOMATION LINKAGE

INT

ER

NA

LE

XT

ER

NA

L

BUSINESS STRATEGY I/T STRATEGY

ORGANIZATIONAL INFRASTRUCTUREAND PROCESSES

IS INFRASTRUCTURE AND PROCESSES

BUSINESSSCOPE

DISTINCTIVE COMPETENCIES

BUSINESSGOVERNANCE

BUSINESSSCOPE

TECHNOLOGYSCOPE

I/TGOVERNANCE

PROCESSES

ARCHITECTURES

SKILLSSKILLS

ADMINISTRATIVE INFRASTRUCTURE

PROCESSES

Businessmodel

[Venkatraman, 1993]

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State of the Art (I) – e-business models

• Categorization– According different axes (innovation, integration, control …)

– Timmers, Rappa, Tapscott …

• Modeling– Concepts and questions

– Hamel, Afuah, LinderWeill, Rayport, …

• Tools– Computer-aided design

– MIT Process Handbook (Malone)

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State of the Art (II) - ontology

• The Enterprise Ontology– collection of terms and definitions relevant to business enterprises

– Activities and processes, organization, strategy, marketing, time

• On-to-knowledge (XML) Content-driven Knowledge-Management through Evolving Ontologies

• Electronic Business (EDI) using XML– «To provide an open XML-based infrastructure enabling the global use

of electronic business information in an interoperable, secure and consistent manner by all parties»

– Other EDI ontology: bizTalk, cXML, CBLScénario

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State of the Art (III) – business strategy

• (Un-)bundling the corporation– Product (What?), Customers (Who?), infrastructure (How?)

– Hagel, Markides …

• Competence tree– Knowledge, strategy, value creation

– Giget, …

• Value creation framework– value-creating activities result in

offerings provided to customers

– Ramirez, Wallin, Norman …

WHATWHAT

WHOWHO

HOWHOW

Market

Product

Activities

Capabilities

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PART 1. An e-Business Model framework (questions)

Customerrelationship


Productinnovation

Productinnovation

FinancialAspects

FinancialAspects

Infrastructureoperation

InfrastructureoperationHOW?

WHO?WHAT?

HOW MUCH?

Who are our customers?

How do we reach them?

How we get and keep our customers?

What are our key competencies?

How we operate and deliver?

How we collaborate?

What do we offer to our customers?

What are our revenues?Our pricing?

What are our costs?

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An e-Business Model framework (concepts)



Productinnovation

Productinnovation

FinancialAspects

FinancialAspects



Capability

Configuration

Partnership

HOW?

Channel

Customer

Relationship

Proposition

WHAT?

Cost

Revenue

WHO?

HOW MUCH?

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1. Value proposition

Value Proposition

Offering

setOf isA

• Description• Reasoning (use, risk, effort)

• Life cycle (creation, purchase, use, renewal, transfer)

• Value level (me-too, innovation/imitation, innovation)

• Price level (attractive, market, high-end)

• Categorization (barter, sale, market, buy)

Customer Capability

What do we offer?

ProductInnovation

ProductInnovation

synonym: Benefice

Requires Targeted to

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Value proposition (definition)

To characterize product innovation, the value proposition

• defines,

• the actual product or service, and

• the value or benefits perceived by customers of the products and services offered by the firm.

• In the case of e-business this offer naturally includes a strong information system component, principally the Internet.

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Value propositions, capabilities and customers

MJF concerts Festival visitors Attractive MJF venue

MJF off

MJF frequentation

MJF recordings

Sponsors

Record, TV, artists

Shops

Value Proposition Target Customer Capability

Contract stars

Attract people

Atmosphere & Experience

MJF sponsorship

Mobilize Volunteer Staff

MJF Brand & Franchise Franchisees

illustration

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A detailed value proposition

VALUE PROPOSITION Name: MJF sponsorship

Description: The international reputation and the size of the MJF makes it an ideal partner for sponsorships. With its great concerts, large crowd and international media presence it gives affiliated sponsors a large visibility.

Reasoning: {Use}: An MJF sponsorship contract gives a partner the possibility to potentially address 240'000 people and build be co-branded with the MJF.

{Risk}: As the MJF is an established institution with an established brand and a solid customer base the risk of entering a troubled partnership is very low.

Value level: {Me-too}: The MJF is a mass advertising "media" among others. Thought it is one of the top established festivals the value level of a sponsorship with the MJF is comparable to other festivals.

Price level: {Market}: The price level of a sponsorship at the MJF is situated at market levels.

Composed of OFFERINGs: (the detailed OFFERINGs are captured in annex XXX) Affiliation Advertising space Sponsors' events Free tickets

Value for TARGET CUSTOMER: TARGET CUSTOMER 3: Sponsors

Based on CAPABILITYies: CAPABILITY 2: Attract and feature great stars and concerts

CAPABILITY 4: Attract people

illustration

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2. Target customers

Customer

Criterion

setOf isA

Value proposition

Community

Segment isA

Who are our customers?



Targeted to

• Description• Reasoning

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Segments

• Categorizations of the population into social class or psychologically defined groups

• Area where a firm can specialize and gain competitive advantage– By having lower costs or customer-

satisfying differentiation

– Clear distinction

– Limited set of competitors

– Distinctive supply

– Different purchase criteria

– Barriers to deter new entrants

MJF concerts Festival visitors

MJF off

MJF frequentation

MJF recordings

Sponsors

Record, TV, artists

Shops

Value Proposition Target Customer

MJF sponsorship

MJF Brand & Franchise Franchisees

illustration

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Communities

Group of people or entities– that share values or interests

– and use the le Net regularly &at the same place

transaction Business, trading, occasions, barter …

interest Idea sharing,communication …

fantasy Role games, fantasy world…

relation Assistance (disease), sharing of experiences …

MJF concerts Festival visitors

Value Proposition Target Customer

illustration

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3. Distribution channel

How do we reach our customers? Feel and serve them?

Channel

Link

setOf isA

CustomerValue proposition

Offering

isA

Internet

Network isA

Call center

Actor by

Delivered through Delivered to

• Description• Reasoning• Customer Buying Cycle• Value Level• Price Level

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Channel

• A channel can be defined as a set of links or a network via which a firm “goes to market” and delivers its value proposition.

– Owned channels - direct (i.e. Web, phone, fax…)

– Owned channels - indirect (i.e. brand shops)

– Partner channels (intermediation i.e. retail, shops, ...)

• More precisely it defines how a firm is “in touch” with its customers for a variety of tasks

– Customer Buying Cycle (CBC)

– Customer Service Life Cycle (CSLC)The purpose is to make the right quantities of the right products or

services available at the right place, at the right time

The purpose is to make the right quantities of the right products or

services available at the right place, at the right time

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Distribution channels and links

MJF advertising

MJF concert listing

Free distribution of the MJF program, also as supplement

Advertising for up-coming events

Online program, news feed and real videos

of past concerts

Real videos of past concerts, various

information

www.montreuxjazz.com

MJF event

www.ticket corner.ch

Ticket Corner

MJF program

CHANNEL {Awareness} {Evaluation} {Purchase} {After sales}

Channel strategy at the Montreux Jazz Festival (essentially for Festival visitors)

Emissions, and supplements on the

MJF

Media

www.montreux sounds.com

Artist descriptions, online program, MJF

virtual tour

Ticket office

Online ticketing (48% of tickets) and online shop

Online ticketing

Swiss-wide ticket agency shops

Program distribution

MJF Sponsors

Worldwide promotion

Swiss Tourism: Top Events of

Switzerland

46% of tickets

MJF concert database, taste real

videos

Artist and event descriptions

illustration

Channel

Link

setOf isA


Offering

isA

Internet

Network isA

Call center

Actor by



Channel

Link

setOf isA


Offering

isA

Internet

Network isA

Call center

Actor by



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MJF Concert ... ... Online ticketing (48% of tickets)

CHANNEL VALUE PROPOSITION

MJF Concert

OFFERINGs of the VALUE PROPOSITION LINKs of the CHANNEL

CHANNEL Name: www.ticketcorner.ch

Description: www.ticketcorner.ch belongs to Ticket Corner and is a partner CHANNEL that sells tickets of various Swiss events from concerts to sports events. They also sell MJF concert tickets.

Reasoning: {Use}: The concerts of the MJF can conveniently be found on the website in the Ticket Corner database.

{Effort}: The customer can comfortably order the tickets over the Internet and get them delivered directly to his home.

Value level: {Me-too}: Online ordering of tickets for a specific event have become quite commonplace.

Price level: {Free}: Customers have to pay a fee for handling an delivery of an order.

Composed of LINKs: MJF concert listing. Online ticketing.

Delivers VALUE PROPOSITION: VALUE PROPOSITION 1: MJF concert (tickets).

Delivers to TARGET CUSTOMER: TARGET CUSTOMER 1: Festival visitors.

A detailed distribution channelillustration

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4. Customer relationship

Relationship

mechanism

setOf isA

• …


Offering

isA

Retention

Acquisition isA

Add-on selling

How do we get and keep our customers?

Trust

Personalization isA

Security

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Customer equity

• Customer Acquisition– How do we get customers?

– Growing market share

• Customer Retention– How do we keep customers?

– Nurturing customer loyalty

• Add-on selling– How do we get customers to buy more?

– Enhancing Average Revenue Per User (ARPU)

In some mobile firms,customer acquisition costshad reached almost a quarter of all operating expensessaid Mr Zehle, CEO of

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PERSONALIZATION mechanisms

Make recommendation Make recommendation

2

3

4a

5

4b

Establish configuration Establish configuration

Planing of production

Listen to the customerListen to the customer

Distribution

Production (internal)

ERP Outsourcing (external) SCM

One-to-one

Mass-customization

Collaborative

filtering

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TRUST & LOYALTY mechanisms

TRUST

SECURITY

PRIVACY

Contribute to the establishment of

BRAND

Notoriety …

Fear: financial losses

Fear: loss of intimacy

INFO- MEDIARY COMMUNITY

Certification

Verification et authorization

Escrow

Notary, payments

Expertise

Guarantee of quality

Rating

Reputation of actors

Insurance

Risk managementContribute

QUALITY

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5. Capabilities and resources

Capability

Resource

setOf isA

Value proposition

What are our key competencies?

Actor by


Business capability

Mgmt capability isA



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Capabilities and resources

• Capability– Repeatable patterns of action in

the use of assets

– Aptitude to exploit and coordinate resources

– to create, produce, and/or offer products and services to a market

• Resource– Assets that are available &

useful

– in detecting and responding to

– market opportunities or threats

OWN

DO

MJF concerts Attractive MJF venue

MJF off

MJF frequentation

MJF recordings

Value Proposition Capability

Contract stars

Attract people

Atmosphere & Experience

MJF sponsorship

Mobilize Volunteer Staff

MJF Brand & Franchise

illustration

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Types of capabilities

external

internal

customersresources

Related to business processes

Related to management processes(decision)

Business modelingcapability• Absorptive capacity• Conceptualizing• timing

[Wallin, 2000] & Synocus

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6. Activities and value configurations


Configuration

Activity

setOf isA

Value propositionCapability

Resource

FitFlowSharing

Value shop

Value chain isA

Value network

How do we operate and deliver?

Actor by

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Types of value configurations

Value chain

Value shop

Value network

[Stabell, 1998]

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Activities and capabilties

Contract musicians

Recording concerts

Selling recordings

Merchandising

Food & Beverages

Concerts

Advertising the MJF

Ticketing

Contract sponsors

Manage volunteers

Manage JAZZ

Manage infrastructure

Commerce Production

musicians

Sponsors

JAZZ

venues

recordings

Nobs Network

tickets instruments

flow

flow

flow

flow

fit

fit

flow

fit

fit

flow

share

Programming

flow

by MJF

by MJF

by MJF, Ticket Corner

by MFJ, sponsors, media, Swiss tourism, Montreux

by Montreux Sounds

by MJF, artists

by MJF, caterers, Heineken

by shops

by MJF

by MJF

by MJF

by MJF

by MJF, Municipality

by MJF

by MJF

NETWORK PROMOTION

SERVICE PROVISIONING

NETWORK INFRASTRUCTURE

fit fit

Define concert date and stage to be filled

list music styles and possible artists

Choose artist Put artist in program

Evaluate concert and ticket sales

Problem finding

see focus

Focus: Programming decomposed into its sub-activities (forming a value shop)

Problem solving

Choice Execution

Evaluation

Activity Resource By ACTOR

Legend

Nobs & staff flow

illustration

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7. Partnerships


Partnership

Agreement

setOf isA

Value propositionCapability

Activity

on

Market

Chain isA

Network

How do we collaborate?

Actor by

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Types of partnerships: cooperation, competition, co-opetation

Pro

du

ctio

n c

ost

Coordination costlow

low

high

high

CHAINCHAIN

manufacturersupplier retailerdistributor buyer

pro

du

ct

MARKETMARKET

Authormarketing

Authormarketing

Distributorinventory

Distributorinventory

sales

Information systemscoordination

contents

sales

Information systemscoordination

contents

Shippingtransporttracking

Shippingtransporttracking

Affiliatesales

Affiliatesales

Customerbuy

content

Customerbuy

content

Bankpayment

Bankpayment

deliver deliver

order

sale ordersales

critics

Credit cardclearance

returns

NETWORKNETWORK

[Malone, 1987]

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8. Revenue model

Revenue

Pricing

setOf isA

Target CustomersValue proposition

Offering

for

What are our revenues? Our pricing?

Link• Description• Reasoning

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Revenue models

REVENUE

one time

recurrent

sale

registry

subscription

advertisement

use

Income of the subscription fees to become a memberPaid by the buyer and/or the vendor

transaction

commission Income, percentage of a transaction made by the settlement (affiliate program)

Income of online sales paid by the buyer

Income of the ad banners posted on the shopfrontPaid by the vendor

Phone• registry• subscription• Usage

• Time• Services

combination

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9. Cost structure


Cost

Account

setOf isA

What are our costs?

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Cost structure

Revenues

Total net revenue

Cost of goods sold

Total Costs of goods sold

Gross margin

Total Costs of goods sold

Operating expenses

research and development

sales and marketing

general and administration

Total operating expenses

Operating income (loss)

Income (loss) before tax

Net income (loss)

PROFIT = (P – VC).Q – FC

P the unit price of a product

VC the variable cost of a unit

Q the number of products

sold

FC fixed costs

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The e-Business Model Modeling Framework (BM2F)

Channel CustomerPropositionConfigurationCapability

Link CriterionOfferingActivityResource

Cost

Account

Revenue

Pricing

Partnership

Agreement

Relationship

Mechanism

Actor

isa

isa

flowfitshare

ProductInnovation

ProductInnovation





Financialaspects

Financialaspects

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An overview business model

VALUE PROPOSITIONs

MJF Concerts MJF off

Frequentation MJF Sponsorship

Festival recordings MJF Brand & Franchise

CAPABILITYies

Atractive MJF venue Contract stars Attract people

Mobilize volunteers Atmosphere & Experience

CUSTOMERs

Festival visitors Shops

Sponsors Record, TV, artists

Franchisees

RELATIONSHIPs

PARTNERSHIPs

Artists, sponsors, shops, F&B, volunteers, media,

infrastructure, general festival partners, "Friends of the Festival", musical

partners, Montreux municipality

ACTORs

Artists, Media, Sponsors, Montreux, Volunteers,

F&B, Merchants, Montreux Sounds, Sunset Music, Swiss Tourism, IJFO,

SMPA

REVENUE MODEL

Ticket sales {41%} Sponsoring {20%}

F&B {28%} Merchandising {5%}

Recordings {4%} Diverse {2%}

COST STRUCTURE

Infrastructure {20%} Artists {29%} F&B {10%}

Merchandising {2%} Production {16%} Fixed costs {15%} Marketing {4%}

Divers {4%}

PROFIT/LOSS

INFRASTRUCTURE MANAGEMENT

CUSTOMER RELATIONSHIP

PRODUCT INNOVATION

FINANCIAL ASPECTS

CHANNELs

Montreuxjazz.com MJF event

TicketCorner bricks&clicks MJF program

Media Sponsors

MontreuxSounds.com Swiss tourism TEOS

VALUE CONFIGURATION

Contract musicians, contract sponsors, ticketing,

advertising / concerts, F&B, commerce, merchandising, selling recordings / manage

MJF infrastructure, production, manage JAZZ, manage volunteers, record

concerts

THE MONTREUX JAZZ FESTIVAL BUSINESS MODEL (A BIRD'S EYE VIEW)

illustration

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PART 1B. Computer-aided design of business models

A model to...– Define– Seize– Describe– Store

... a business model

Application

bla bla

formal modelmanager seize

unstructured

information

Semi –structured information

formalization

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A XML e-Business Model Modeling Language (BM2L)

ValueProposition

ValueProposition

Characteristics

SetOfOfferings

SetOfOfferings

OfferingCharacteristics

Description

Name

Offering

ValueLevel

Reasoning

LifeCycle

PriceLevel

Risk

Use

Effort

InnovativeInnovation

MeToo

Excellence

Innovation

Economy

Free

Market

HighEnd

Description

Name

ValueLevel

Reasoning

LifeCycle

PriceLevel

InnovativeInnovation

MeToo

Excellence

Innovation

Economy

Free

Market

HighEnd

Risk

Use

Effort

element

element

element obligatory element

optional element

choice between

sequence of

1 - n elements

Legend

ValuePropositionIDAddressesCustomerIDREFBasedOnCapabilityIDREF

LifeCyclePhase{Creation, Purchase, Use,Renewal, Transfer}

LifeCyclePhase{Creation, Purchase, Use,Renewal, Transfer}

OfferingID

for computer-aided business modeling

Protégé-2000an ontology editor anda knowledge-base editor.

also …

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A BM2L document

<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>

EXTRACT

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Generating documents from a BM2L document

XSLProcessor

BM2LDocument

XSL StylesheetDocument

HTML Document

SVG Document

PDF Document

Word Document

e.g. a two page overview of a company’s business model

e.g. a ten page report of a company’s business model

e.g. a detailed n-page description of the company’s business model

e.g. a graphical view of a business model issue such as the channel strategy

BM2LSchema

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PART 2. Research methodology: DESIGN SCIENCE

[March & Smith, 1995, 2004]

Build Evaluate

Construct LANGUAGE

Model USES

Method PROCESSES

InstantiationWORKING SYSTEM

RESEARCH PROCESSES

RE

SE

AR

CH

AR

TIF

AC

TS

• A problem-solving approach (engineering, artificial science)

“Create innovations that define ideas, practices, technical capabilities, and products through which the analysis, design, implementation, and use of information systems can be effectively and efficiently accomplished”

The goal is utility

Vs. Behavioral science

Development and justification of theoriesthat explains or predict phenomena

Goal is truth

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Build and Evaluate

BUILD Outcome EVALUATE Method

Construct Provides the language

The e-Business Model Ontology

Completeness, Understandability

Literature Review,

Interviews, Cases

ModelUses the construct to represent real world situations

Uses of the e-Business Model

Ontology

Fidelity with real world

phenomena, Completeness

Literature Review,

Interviews, Cases, MJF Case Study

Method Defines processesGuidance for

defining business models

Appropriateness

Literature, Instantiation,

MJF Case Capture

InstantiationShows that […] can be implemented in a working system

BM2L and prototype ApplicabilityMJF Case Capture

UTILITY

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Evaluating the Business Model Ontology

Evaluation

Compare ontology with literature

Test ontology in the field

Test ontology vs. other model in the field

Evaluate ontology by practitioners

Test ontology with case studies

Interest by the research community

Positioning the ontology to the existing business model literature shows which domains are covered or not and is an indicator of completeness.

Interviewing managers and consultants on the ontology gives an indication on its ability to describe the business logic of a firm.

Describing a real world business model through the ontology's rigorous formalism tests its applicability to case studies.

Observing the research community's interest in the ontology demonstrates certain aspects of its validity.

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.

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Compare with literature

Revenue Model

Cost Structure

PartnershipCapabilityValue Configuration

Customer Relationship

Distribution Channel

Target Customer

Value Proposition

Business model ontology

Stähler

√√√√√√Weill and Vitale

√√√√√√Petrovic, Kittl et al.

√√√√√√Gordijn

√√√√√√Afuah and Tucci

√√Tapscott, Ticoll et al.

√√√√√Linder and Cantrell

√√√√√√√√√Hamel

Revenue Model

Cost Structure

PartnershipCapabilityValue Configuration

Customer Relationship

Distribution Channel

Target Customer

Value Proposition

Business model ontology

Stähler

√√√√√√Weill and Vitale

√√√√√√Petrovic, Kittl et al.

√√√√√√Gordijn

√√√√√√Afuah and Tucci

√√Tapscott, Ticoll et al.

√√√√√Linder and Cantrell

√√√√√√√√√Hamel

Is the ontology complete?

Have we made any progress?

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Semi-structured interviews with practitioners

Question Domain Questions

Questions on the use of business concepts & tools

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?

If yes, do you use any specific software tool to do this? If yes, which one(s)?

Demonstrations & Explanation of the Ontology

easyJet.com, ColorMailer, Barnes & Noble, Nokia

Questions on the fidelity with real word phenomena

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?

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 (e.g. software purchases like Customer Relationship Management or Supply Chain Management...)

How would it be able to foster innovation in a company with such a model?

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 Do you have any final comments?

Fidelity with real world phenomena?

Potential applications of the business model concept and ontology?

Use of concepts and tools?

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Interview outcome

employees

use of concepts

use of tools

trial & error

defining indicators

improving decision

making

improving strategic

planning

helping in the design of IS

s

increasing innovation

improving process design

improving com

munication

Retail over Internet 3 little no yes q1 q2 q3 q4 q5

Software in the mobile industry 5 little no yes q6 q7 q8 q9 q10

Service over Internet 15 no no yes q11 q12 q13 q14 q15

Service in Finance 31 no no no q16 q17

Internet Industry Platform 80 yes no yes q18 q19 q20 q21

Industry 400 yes no no q22 q23 q24 q25 q26

Entertainment10-

1200no no yes q27

Transport 3'315 no no yes q28 q29 q30 q31

Consultant 1 yes no - q32q33, q34

q35 q36 q37 q38

Consultant 2 yes no - q39 q40 q41 q42 q43

Consultant 3 yes no - q44

green = positive answers, red = negative answers, grey = neutral answers, white = not answered q = quotes

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Montreux Jazz Festival Case Study

VALUE PROPOSITIONs




CAPABILITYies



CUSTOMERs



Franchisees

RELATIONSHIPs

PARTNERSHIPs




ACTORs



SMPA

REVENUE MODEL




COST STRUCTURE



Divers {4%}

PROFIT/LOSS



PRODUCT INNOVATION

FINANCIAL ASPECTS

CHANNELs



Media Sponsors


VALUE CONFIGURATION




concerts


VALUE PROPOSITIONs




CAPABILITYies



CUSTOMERs



Franchisees

RELATIONSHIPs

PARTNERSHIPs




ACTORs



SMPA

REVENUE MODEL




COST STRUCTURE



Divers {4%}

PROFIT/LOSS



PRODUCT INNOVATION

FINANCIAL ASPECTS

CHANNELs



Media Sponsors


VALUE CONFIGURATION




concerts


fidelity with real world phenomena?

applicability of ontology?

applicability of prototype?

completeness?

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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

Ellipse – bricks & clicks book retailing Swiss bookstore founded in 1984

NetMovies – DVD rental over the Internet Subsidiary of Aleance (USA) founded in 2001

MNC – mobile phone services (SMS) Swiss Telecom service provider founded in 1998

Adrenalink – sports marketing and management consultancy Swiss consultancy

Phone-Plus – telecommunication services reseller Belgian venture established in 1999

ZenithVie – life insurance Swiss company

Closed interview questions rated between 1 and 5 (1 = very definitely not, 3 = to some extent, 5 = very definitely) average

Did the concepts exposed in the course "Stratégies et technologies de l'information" allow you to accurately describe the business model of the company you analyzed?

3.89

How closely do the elements of the sample document cover the aspects of the business model analyzed? 4

Was the concept "proposition de valeur" relevant to describe the business model you analyzed? 4.44

Was the concept "clients et canaux de distributions" relevant to describe the business model you analyzed? 3.78

Was the concept "relation-client et confiance" relevant to describe the business model you analyzed? 3.78

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?

Is the business model concept applicable?

Appropriateness of the building block concepts?

Masters Student’s

Class Work & thesis

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Design science research guidelines

A more formal proof of concept using the guidelines …

1. Problem relevance

2. Research rigor

3. Design as a search process

4. Design as an artefact

5. Design evaluation

6. Research contributions

7. Research communication

Coming …

UTILITY[March & Smith, 1995, 2004]

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PART 3. Business/IT alignment

HYPOTHESIS

• A formal business model should make easier the business/IT alignment

STRATEGYSTRATEGY

ORGANIZATIONORGANIZATION TECHNOLOGYTECHNOLOGY

Businessmodel

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Business model and business/IT alignment

Application infrastructure

Communication

Data management

IT management

Security

Architecture & standards

IT research & development

IT education

IT infrastructure

STRATEGYSTRATEGY




Productinnovation

Productinnovation

FinancialAspects

FinancialAspects



IT application portfolio

STRATEGIC TURNAROUND

FACTORY SUPPORT

CUSTOMER

INNOVATION

FINANCE

PROCESSES

IS roleIS sourcingIS structure

InfusionPROSPECTOR

AllianceANALYZER

UtilityDEFENDER

Balanced ScoreCard

Alignment profile

1

2

3

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Payment infrastructure

MJF Telekurs Multipay

Bank

transactions

clearing

statement $ account

Ergonomics

application

Web Application

Docking Station

transaction information

merchant physical sync

merchant

$

$

Shop Telekurs

Multipay

Bank

transaction

clearing

statement $ account

JAZZ $

illustration

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IT infrastructure


Communication

Data management

IT management

Security



IT education

TECHNOLOGYTECHNOLOGY[Weill & Vitale, 2002]

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IT infrastructureillustration


Communication

Data management

IT management

Security



IT education

IT infrastructure

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Application portfolio

STRATEGIC

Applicationsthat are criticalto sustaining future

KEY OPERATIONAL

Applicationsthat are essentialfor success

HIGH POTENTIAL

Applicationsthat may be importantIn achieving the future

SUPPORT

Applicationsthat are valuablefor success

High STRATEGIC IMPACT OF IT low

Hig

h

I

MP

OR

TA

NC

E O

F I

T A

PP

LIC

AT

ION

S

low

EMERGING

GROWTH

DECLINE

MATURITY

12

43

McFarlan

TECHNOLOGYTECHNOLOGY[Ward, 2002]

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Application portfolio

IT application portfolio

STRATEGIC POTENTIAL

OPERATIONAL SUPPORT

.

Activities Strategic Key Operational Support High Potential Contracting musicians Database, Office Contracting sponsors Ticketing Website

(NAGRA system) Reservation System Accounting

Promotion Website Mailing Database, Office

CMS

Concerts (NAGRA System) Production F&B (NAGRA System) Paycenter Accounting, Office Commerce (NAGRA System) Paycenter Accounting, Office Merchandising (NAGRA System) Paycenter Accounting, Office Website Selling recordings Concert Database Accounting, Office Website

(Music downloading) manage MJF infrastructure Production Production JAZZ currency & CASH Paycenter & Views Accounting, Office Volunteer management (NAGRA system) Volunteer Database Volunteer Database,

Office

illustration

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Balanced Scorecard (BSC)[Kaplan & Norton, 1992]

Customerperspective

Customerperspective

Innovationperspective

Innovationperspective

Financialperspective

Financialperspective

Processperspective

Processperspective

How do the customers perceive us?

In which process do we have to prove excellence?

How to improve our services and our quality?

How do shareholder perceive us?

CUSTOMER

Goals Measures

& initiatives

INNOVATION

Goals Measures

& initiatives

FINANCE

Goals Measures

& initiatives

PROCESSES

Goals Measures

& initiatives

STRATEGYSTRATEGY

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Balanced Scorecard (BSC)

INNOVATION

CUSTOMERS

INFRASTRUCTURE

FINANCE

illustration

CUSTOMER

INNOVATION

FINANCE

PROCESSES

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Alignment profiles

ORGANIZATIONORGANIZATION

Business

model

[Hirschheim, 2001]

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Alignment profilesillustration

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CONCLUSION. Alignment with the environment

STRATEGYSTRATEGY


1Business

model

Evolutionmodel Environment

model

ENVIRONMENTENVIRONMENT

2

EVOLUTION3

NEXT …

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Assessing a technology environment

Observation & capture

STUDY

Multi-perspective

MODELREPRESENTATION

LANDSCAPEm-Business

CustomerMarket

CustomerMarket

Productinnovation

Productinnovation

Financialaspects

Financialaspects

InfrastructureIndustry

InfrastructureIndustry

Analysis & visualization

TOOL

NEXT …

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A framework for assessing a technology environment

uncertain

complex disruptive

ISSUE

ACTOR USE

Env

iron

men

tO

ntol

ogy

Ana

lysi

s

Five forces analysis Policy network analysis

Structural analysisActor-issue analysis

Disruption analysisAdoption analysis

Analysis & visualization

TOOL

Multi-perspective

MODEL

for assessing environment (present) and designing scenarios (future)

Research with

Giovanni Camponovo, phd

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A DSS tool for assessing a technology environment

Multi-Actor Strategic Analysis Model

WLAN

Example

Monzani, Bendahan & PigneurBest paper HICSS-37 (2004)

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Thank you …

http://inforge.unil.ch/yp/TALK/slides/UBC_Jan2004.ppt

Documents

UBC workshop January 9, 2004 Yves Pigneur Université de Lausanne [email protected] (+41 21) 692.3416 An ontology for defining e-business models