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Business Models in the Data Economy: A Case Study from the Business Partner Data Domain


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Data management seems to experience a renaissance today. One particular trend in the so-called data economy has been the emergence of business models based on the provision of high-quality data. In this context, the paper
examines business models of business partner data providers. The paper explores as to how and why these business models differ. Based on a study of six cases, the paper identifies three different business model patterns. A resource-based view is taken to explore the details of these patterns. Furthermore, the paper develops a set of propositions that help understand why the different business models evolved and how they may develop in the future. Finally, the paper discusses the ongoing market transformation process indicating a shift from traditional value chains toward value networks—a change which, if it is sustainable, would seriously threaten the business models of well-established data providers, such as Dun & Bradstreet, for example.

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Business Models in the Data Economy: A Case Study from the Business Partner Data Domain

  1. 1. PD Dr.-Ing. Boris Otto, Dr.-Ing. Stephan AierLeipzigFebruary 27, 2013Business Models in the Data Economy: A Case Study fromthe Business Partner Data Domain
  2. 2. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 2Agenda1. Introduction2. Related Work3. Research Methodology4. Results Presentation5. Conclusion and Outlook
  3. 3. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 31.1 Motivation and Research Question First proposals to view data as a resource were made in the 1980s (Wang et al. 1993;Goodhue et al. 1988) Concepts for managing physical goods were transferred to managing the “dataresource”, e.g. TDQM (Levitin & Redman 1998; Wang 1998) The relevance of business partner data was recognized when studying “corporatehousehold data” (Madnick et al. 2002) The practitioners’ community observes the emergence of the “data economy” (Newman2011)How and why do business models of business partner data providers differ?
  4. 4. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 41.2 Business Partner Data: An Example from a Global ElectricalEngineering and Manufacturing GroupOrganisationalData+Name+Block indicatorIdentification+Unique identifier+Chamber ofcommerce no.Contact Data+Division+Telephone+EmailData Source+System ID+Local System IDAddress Data+Street and city+Country+ZIP codeBankingInformation+Bank+IBAN+BIC codePurchasing Data+Currency+IncotermsHierarchyInformation
  5. 5. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 52.1 Related Work on Business Model Theory Foundations of Business Model Theory Resource-Based View of the Firm (Wernerfelt 1984; Barney 1991) Industrial Organization Perspective (Bain 1968) The Strategy Process Perspective (Ginsberg 1994) Strategic Resources are according to Barney (1991): Valuable Rare In-imitable Non-substitutable Examples of recent business model work Business model generation (Osterwalder & Pigneur 2010) Electronic business models (Zott & Amit 2010)
  6. 6. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 6Market level, e.g. five forcesOffering level, e.g.generic strategiesActivity andorganizationallevel, e.g. value chainResource level, e.g. RBVMarket level, e.g. fiveforcesand capital and labourMARKET / INDUSTRYCustomers (1) Competition (2)Offering (3)Physical component Price/Cost Service componentTHE FIRMScope of management (7) ACTIVITIES AND ORGANISATION (4)RESOURCES (5)SUPPLIERS (6)Factor Markets Production InputsLongitudinaldimension,e.g. constraints onactors, cognitive andsocial limitations (7)Human Physical Organizational2.2 Business Model Framework by Hedman & Kalling (2003)
  7. 7. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 73.1 Research Methodology Case study research was applied to study a contemporary phenomenon in its naturalenvironment (Benbasat et al. 1987; Eisenhardt 1989) Research process according to five guiding points proposed by Yin (2002) Conceptual framework following the business model approach by Hedman & Kalling(2003) Case selection within a focus group (Morgan & Krüger 1993) Data collection through interviews, internal presentations, public records
  8. 8. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 84.1 Case Study OverviewAvox Bureau van Dijk(BvD)Dun & Bradstreet(D&B)Factual Infochimps InfoGroup OneSourceCustomers n/a 6,000 clients,50,000 users.100,000 fromvarious industries.n/a n/a Several thousands.Competitors Interactive Data,SIX Telekurs.D&B, amongothers.BvD, among others. Similar offeringas Infochimps.Similar offering asFactual.D&B, amongothers.Offering One millionentities, threeservice types, webservices.85 millioncompanies, dataand softwaresupport, webservices, salesforce.177 millionbusiness entities,data and relatedservices, webservices, salesforce.Open dataplatform, API usefor free or at acharge.15,000 data sets,open data platform,four differentpricing models,web service.18 millioncompanies, 20million executives,data and software,web service.Activities andorganizationData retrieval,analysis, cleansingand provisionMonitoring ofmergers andacquisitions, dataanalysis andprovision.Data collection andoptimization,provision of qualitydata services.Data mining,data retrieval,data acquisitionfrom externalparties.Data collection,infrastructuredevelopment,hosting, anddistribution.Selection ofcontent providers,data collection,“data blending”,data updates.Resources 38 analysts toverify and cleansedata, centraldatabase500 employees in32 offices, centraldatabase (ORBIS).More than 5,000employees, centraldatabase21 employees,central open dataplatform.Less than 50employees, centraldata platform.104 employees.Factor andproduction inputsThird-partyvendors, officialdata sources,customers.More than 100different datasources.Official sources,partnering, contactto companiesOpen datacommunity.Open datacommunity.50 “world-class”suppliers, 2,500data sources.Scope ofmanagementInternationalcoverage, co-creation,partnering.Global coverage,alliances, data,software,consulting.Global coverage. Start-upcompany.Start-up company. Global coverage.
  9. 9. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 94.2 Business Model Analysis: Offering in the Case of InfoChimpsPricing model “Baboon” “Brass Monkey” “Silverback” “Golden Ape”Fee free 20 USD/month 250 USD/month 4,000 USD/monthAllowed API callsper month100,000 500,000 2,000,000 15,000,000Allowed calls perhour2,000 4,000 20,000 100,000
  10. 10. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 104.3 Key Resources of Business Partner Data ProvidersValuable Rare Inimitable Non-substitutableLabor Yes No No NoExpertise and Knowledge Yes Yes No YesDatabase Yes Yes No YesInformation Technology andProceduresYes No No NoNetwork Access and Relationships Yes Yes Yes YesCapital Yes Yes No No
  11. 11. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 114.4 Business Model Patterns for Business Partner Data ProvidersPattern IBuyer-SupplierRelationshipPattern IICommunity SourcingPattern IIICrowd SourcingLegend: Business Partner Data Provider Business Partner Data Consumer Data SourceData flow.
  12. 12. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 124.5 Resource Allocation PatternsInformation Technology andProceduresNetwork Access andRelationshipsExpertise and KnowledgeCapitalLaborDatabaselow highmediumFactual, InfochimpsAvoxBvD, D&B,InfoGroup OneSource
  13. 13. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 135.1 An Analysis and Positioning Framework for Business Partner DataProviderscrowd-sourced dataunmanaged databudget pricinglow market share(or) niche offeringhigh market sharebroad offeringAvoxFactualD&Bself-sourced datamanaged datapremium pricingestablished crowd-sourcer well-established traditional suppliernew market entrant niche provider
  14. 14. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 145.2 Conclusion and Outlook Findings Three business model pattern exist A positioning framework is suggested Contribution Among the early papers addressing business partner data domain Results may be applied for business models around “intangibles” in general Practitioners may benefit from the analysis of the domain Limitations Small case base Explorative nature of study, threats to generalizability
  15. 15. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 15PD Dr.-Ing. Boris OttoUniversity of St. GallenInstitute of Information 71 224 3220Your SpeakerThis research was supported by the European Commission through the «NisB – The Network is theBusiness» project and the Competence Center Corporate Data Quality (CC CDQ) at theUniversity of St. Gallen.
  16. 16. © IWI-HSG – Leipzig, February 27, 2013, Otto, Aier / 16ReferencesBain, J. S. (1968) Industrial organization, 2 edition. New York, NY: Wiley.Benbasat, I., D. K. Goldstein, and M. Mead (1987) "The Case Research Strategy in Studies of Information Systems," MIS Quarterly(11) 3, pp. 369-386.Eisenhardt, K. M. (1989) "Building Theories from Case Study Research," Academy of Management Review (14) 4, pp. 532-550.Ginsberg, A. (1994) "Minding the Competition: From Mapping to Mastery," Strategic Management Journal (15) S1, pp. 153–174.Goodhue, D. L., J. A. Quillard, and J. F. Rockart (1988) "Managing The Data Resource: A Contingency Perspective," MIS Quarterly(12) 3, pp. 373-392.Hedman, J. and T. Kalling (2003) "The business model concept: theoretical underpinnings and empirical illustrations," EuropeanJournal of Information Systems (12) 1, pp. 49-59.Levitin, A. V. and T. C. Redman (1998) "Data as a Resource: Properties, Implications, and Prescriptions," Sloan ManagementReview (40) 1, pp. 89-101.Madnick, S., R. Wang, and W. Zhang (2002) A Framework for Corporate Householding, in 7th International Conference onInformation Quality, pp. 36-46. Cambridge, MA.Morgan, D. L. and R. A. Krueger (1993) When to use Focus Groups and why?, in D. L. Morgan (Ed.) Successful Focus Groups,Newbury Park, California: Sage, pp. 3-19.Newman, D. (2011) How to Plan, Participate and Prosper in the Data Economy. Gartner G00211545.Osterwalder, A. and Y. Pigneur (2010) Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers.Hoboken, NJ: Wiley.Wang, R. Y. (1998) "A product perspective on total data quality management," Communications of the ACM (41) 2, pp. 58-65.Wang, R. Y., H. B. Kon, and S. E. Madnick (1993) Data Quality Requirements Analysis and Modeling, in 9th InternationalConference on Data Engineering, pp. 670-677. Vienna.Zott, C. and R. Amit (2010) "Business Model Design: An Activity System Perspective," Long Range Planning (43) 2-3, pp. 216–226.Yin, R. K. (2002) Case study research: design and methods, 3rd edition. Thousand Oaks, CA: Sage Publications.