Creative Thinking about Internet of Service Business Models

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»Creative Thinking about Internet of Service Business Models«, Nico Weiner, SRII Global Conference 2011, San Jose, California, U.S.

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Creative Thinking about Internet of Service Business Models

  1. 1. Creative Thinking about »Internet of ServiceBusiness Models«Presentation of the contribution »A Framework for the Design andEvaluation of Business Models in the Internet of Services«at the SRII Global Conference 2011 Nico Weiner Competence Center Electronic Business Fraunhofer IAO, Stuttgart Germany March 31st, 2011 San José, CA, USA © Fraunhofer IAO, IAT Universität Stuttgart 1
  2. 2. The »Internet of Services« - VisionHypothesis:The Web of the future offers the infrastructural and organizationalfacilities to trade business-services over the internet as simple as we cantrade products today.Today, Cloud Computing- and Software-Services are the mostsignificant aspects of this vision to become reality! © Fraunhofer IAO, IAT Universität Stuttgart 2
  3. 3. Agenda  The Internet of Services from a Business Model Perspective – A First Glance  The[moby]-Business Model Approach  Web-based Business Model Design Demo  Outlook on Business Model Management © Fraunhofer IAO, IAT Universität Stuttgart 3
  4. 4. Cloud Services –Excerpt of the Dimensions of a Business ModelFinancials: costs for running a datacenter and server-infrastructure (inhouse or via partner); typically high-quality support with appropriate costs; a completely different pricing model in many cases –various criteria do exist: OS, location of datacenter, instances, compute units, memory size, transfer, transactions, subscriptions …Partnership: Integration of a datacenter-partner; platform providers; ISV – independent software vendors which offer via a platform; integrators; resellers & value adding resellers and many other 3rd parties …Value Creation & Distribution: New questions of outsourcing of resources, capabilities to partners; development of software-offering itself + migration/ integration/ customization-services; support; infrastructure & service monitoring, hosting, SW/HW-appliances …Value Proposition => How do you describe the value for your customers? © Fraunhofer IAO, IAT Universität Stuttgart 4
  5. 5. »The Greater Picture«Thinking of creative business model variants by keeping track of all aspectswithout information overload Image by Ben Heine © Ben Heine 2011 - www.benheine.com BLOG: http://benjaminheine.blogspot.com © Fraunhofer IAO, IAT Universität Stuttgart 5
  6. 6. Solution –Think about business models, not business plansBusiness Model: A simple model of the business logic (mainaspects of value exchange) of a company. Business Models are(far) more than financials!Elements of a business model description depend on author’sfocus – most of them see building blocks and relations betweenthem => An Ontology is particularly suitable to describe a business modelWhy no business plan? A business model is an early-stage tool to be fast is a visual way to speak about ideas targets a wider audience (internal and external decision makers, business developers but maybe also partners and other external parties)Images: small versions of the canvas by Osterwalder, Gordijn’s e3-value and Wirtz’s model; Business Model Research Map by Fraunhofer IAO © Fraunhofer IAO, IAT Universität Stuttgart 6
  7. 7. Business Model Design is a Creative & Visual Task»Much of the thinking done in formal education Critical vs. Creativeemphasizes the skills of analysis – teaching students Thinking Thinkinghow to understand claims, follow or create a logical analytic vs. generativeargument, figure out the answer, eliminate theincorrect paths and focus on the correct one. probability vs. possibilityHowever, there is another kind of thinking, answer vs. an answerone that focuses on exploring ideas,generating possibilities, left brain vs. right brainlooking for many right answers verbal vs. visualrather than just one.«(Robert Harris) linear vs. associative reasoning vs. richness, noveltyExcerpt from Robert Harris,Introduction into Creative Thinking 1998http://www.virtualsalt.com (1998) Image: photostock / FreeDigitalPhotos.net © Fraunhofer IAO, IAT Universität Stuttgart 7
  8. 8. Agenda  The Internet of Services from a Business Model Perspective – A First Glance  The [moby]-Business Model Approach  Web-based Business Model Design Demo  Outlook on Business Model Management © Fraunhofer IAO, IAT Universität Stuttgart 8
  9. 9. Business Model Conceptmoby – methodology for business dynamics © Fraunhofer IAO, IAT Universität Stuttgart 9
  10. 10. Four Stages of Business Model Design0.) Business Model Ideas Brainstorming about innovative ideas1.) Configuration of the model Introduction into the available building blocks Selection of the required building blocks together with the partner2.) Prioritization and design of the business model alternatives Criteria-based identification of the promising alternatives Design of the alternatives together with the partner (Software-supported)3.) Business Model Evaluation Comparison and validation of the modeled alternatives4.) Business Model Dynamics & Management Exploitation and revision of the business model information © Fraunhofer IAO, IAT Universität Stuttgart 10
  11. 11. Basic reference model (full) Value Approach Market Interface Financial Aspects Products & Services Value Creation & Capabilities offersRelated Customer Experience causesExperience Product & leadsTo Service Offering isOfferedWith Competitor influences Pricing creates intends experiences approaches refines targets requires leadsTo reflects Target Revenue refines Customer generatesSharedRevenue isOfferedWith requires isRiskFor (Group) targets providesInputFor isMaintainedWith targets influences usesSimilar Business Revenue isOperationalBaseFor Customer/ Process creates leadsTo Sharing Complementary Business Mechanism Offering Relationship delivers requires requires Value deliversTo Intention refines requires integrates refines Profit refines targets isAspectOf isOperationalBaseFor isMaintainedWith Distribution Channel Capability requires Resource isAspectOf contributes targets influences Potential Expense isAspectOf conceals Agreement reflects earns negotiates operates isInvolvedIn isSetUpWith refines causes Partner (Group) causes causes Expense experiences refines Partner causesExperience provides holds Experience requires requires invests Investment © Fraunhofer IAO, IAT Universität Stuttgart 11
  12. 12. Configured Reference Model (example) Value Approach Market Interface Financial Aspects Products & Services Value Creation & Capabilities offersRelated Customer Experience causesExperience Product & leadsTo Service Offering isOfferedWith Competitor influences Pricing creates intends experiences approaches refines targets requires leadsTo reflects Target Revenue Customer refines generatesSharedRevenue isOfferedWith requires isRiskFor (Group) targets providesInputFor isMaintainedWith targets influences usesSimilar isOperationalBaseFor Business Process Revenue Customer/ creates leadsTo Sharing Complementary Business Mechanism Offering Relationship delivers requiresrequires Value deliversTo Intention refines requires integrates refines Profit refines targets isAspectOf isOperationalBaseFor isMaintainedWith Distribution Channel Capability requires Resource isAspectOf contributes targets Potential influences Expense isAspectOf conceals Agreement reflects earns negotiates operates isInvolvedIn isSetUpWith refines causes Partner (Group) causes causes Expense experiences refines Partner causesExperience provides holds Experience requires requires invests Investment © Fraunhofer IAO, IAT Universität Stuttgart 12
  13. 13. Agenda  The Internet of Services from a Business Model Perspective – A First Glance  The[moby]-Business Model Approach  Web-based Business Model Design Demo  Outlook on Business Model Management © Fraunhofer IAO, IAT Universität Stuttgart 13
  14. 14. [moby:designer]bmSoftware-supported Business Model Design & Management Moby-bm.wmv © Fraunhofer IAO, IAT Universität Stuttgart 14
  15. 15. OnLive – A Cloud-Service for High-End GamingPlease note: this an external view on a business model excerpt based onpublicly available information © Fraunhofer IAO, IAT Universität Stuttgart 15
  16. 16. Agenda  The Internet of Services from a Business Model Perspective – A First Glance  The[moby]-Business Model Approach  Web-based Business Model Design Demo  Outlook on Business Model Management © Fraunhofer IAO, IAT Universität Stuttgart 16
  17. 17. Possible Extensions of the [moby]-Frameworkmoby – methodology for business dynamics Model [moby:business ontology]bm Dynamic Business Model Method [moby]bm Editor [moby:designer]bm Broker Model [moby:event processing]dbpm Dynamic Business Process Method [moby]dbpm Editor [moby:designer]dbpm © Fraunhofer IAO, IAT Universität Stuttgart 17
  18. 18. Thanks for your time & see you at the forum!Download of publications and presentations: www.itbusinessmodels.orgMore information on the THESEUS Research Program: www.theseus-programm.de/en-US/home/Contact Details:  Nico Weiner, Fraunhofer IAO nico.weiner@iao.fraunhofer.de Tel.: +49 711 970 5120Fraunhofer-Alliance Cloud Computingis led by Fraunhofer IAO  7 Fraunhofer-institutes steering the Cloud-activities of Fraunhofer  http://www.cloud.fraunhofer.de (German)The project underlying this report was funded by the German Federal Ministry of Economics and Technology under project funding reference number 01MQ07017. Theresponsibility for the content of this publication lies with the author. © Fraunhofer IAO, IAT Universität Stuttgart 18

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