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Defining Transformational Patterns for Business Model Innovation

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Defining Transformational Patterns for Business Model Innovation

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The pace of changes in the business environment in which a modern enterprise operates requires the enterprise to constantly review its business models in order to survive and prosper in the dynamic world. This exploratory study investigates how to help the enterprise to innovate their business models based on the concepts of fractal enterprise model and transformational patterns. The paper suggests an approach to Business Model Innovation (BMI) where the focus is on transformational patterns. It discusses the structure of such patterns, and based on examples, it presents an approach on how such patterns can be derived from cases of completed business transformations.

The pace of changes in the business environment in which a modern enterprise operates requires the enterprise to constantly review its business models in order to survive and prosper in the dynamic world. This exploratory study investigates how to help the enterprise to innovate their business models based on the concepts of fractal enterprise model and transformational patterns. The paper suggests an approach to Business Model Innovation (BMI) where the focus is on transformational patterns. It discusses the structure of such patterns, and based on examples, it presents an approach on how such patterns can be derived from cases of completed business transformations.

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Defining Transformational Patterns for Business Model Innovation

  1. 1. BIR 2018 Defining Trasformational Pattern for Business Model Innovation Ilia Bider, Erik Perjons DSV, Stockholm University
  2. 2. Have you thought …. Your company’s Business model 2017-2022 … that you company’s main business model can be dead in 5-10 years … and … How do you address that?
  3. 3. Solution: Use existing model/method for Business Model Innovation Osterwalder, A., Pigneur, Y. (2014).Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Wiley, Hoboken, NJ, US Business Model Canvas
  4. 4. Text of the article: http://bit.ly/2NB6APD Video on YouTube: https://youtu.be/-itxTYSBJjg Links to external sources
  5. 5. New problem Business Model Canvas
  6. 6. New problem ● How to get from here to there? ? Business Model CanvasBusiness Model Canvas
  7. 7. Solution ● Find all the company’s assets (people, machines) and processes and their relationships ● Try to combine them in another way to get a new business model In other words use destruction (of an old model) and creation (of a new one) by reconfiguring the existing elements Boyd, J.R: Destruction and creation. Lecture presented to the U.S. Army Command and General Staff College (1976).
  8. 8. New problem ● How to find the assets and processes? – Very few, if any member of staff has an exact picture of how the company works Hoverstadt, P.: Why Business should take Enterprise Architecture seriously. In: Gøtze, J. and Jensen-Waud, A. (eds.) Beyond Alignment: Applying Systems Thinking in Ar-chitecting Enterprises. pp. 55–166. College Publications (2013) – Assets and processes can be hidden for the management
  9. 9. Solution: Model and method support Requirements a such Model and Method support: ● Should visualize the processes and their assets – and relationships between them ● Should support generation of hypotheses for change ● Should help to evaluate hypotheses
  10. 10. Fractal Enterprise Model (FEM) ● FEM is a means to identify the enterprise’s assets and processes that can be used as a basis for new and innovative business models
  11. 11. Fractal Enterprise Model (FEM) ● FEM focuses on enterprise processes and assets and relationships between them, and helps to visualize these relationships Process Asset (resource)
  12. 12. Fractal Enterprise Model (FEM) ● FEM facilitates generation and evaluation of hypotheses about new or complementing business models
  13. 13. Fractal Enterprise Model (FEM) ● FEM facilitates generation and evaluation of hypotheses about new or complementing business models Existing assets and processes that can used as a base for a new business model
  14. 14. Fractal Enterprise Model (FEM) ● FEM facilitates generation and evaluation of hypotheses about new or complementing business models Existing assets and processes that can used as a base for a new business model
  15. 15. FEM – step by step ● To build a FEM, one starts with a process (in most cases a primary one) Book sales over Internet
  16. 16. FEM – step by step ● … then assets that are needed to run process instances are identified Book sales over Internet
  17. 17. FEM – step by step ● … then assets that are needed to run process instances are identified Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure
  18. 18. FEM – step by step ● Then for each asset, identify how it is managed (created, maintained and removed) Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure
  19. 19. FEM – step by step ● Then for each asset, identify how it is managed (created, maintained and removed) Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure
  20. 20. FEM – step by step ● For each assets, identify the processes for its creation, maintenance and removal Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Platform creation Platform maintenance Phasing out old platform Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure Aquire Maintain Retire
  21. 21. FEM – step by step ● Then for each newly added process, once again, identify the assets that are needed for running its instances Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Platform creation Platform maintenance Phasing out old platform Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure Aquire Maintain Retire
  22. 22. FEM – step by step ● Then for each newly added process, once again, identify the assets that are needed for running its instances Book sales over Internet Private Customer - Book Readers Packing and Devilvering Staff Webshop Software IT Plattform for Webshop Deployment Platform creation Platform maintenance Phasing out old platform Beneficiary Workforce Tech & Info Infrastructure Tech & Info Infrastructure Aquire Maintain Retire
  23. 23. Build FEM – with archetypes (patterns) ● To support identification of assets for a process one can use a process-assets archetype
  24. 24. Build FEM – with archetypes (patterns) ● “Process-assets” archetype
  25. 25. Build FEM – with archetypes (patterns) ● To support identification of processes for an asset one can use a process-assets archetype
  26. 26. Build FEM – with archetypes (patterns) ● “Asset-processes” archetype
  27. 27. Build FEM – with archetypes (patterns) ● FEM is created by recursive application of archetypes (process-assets  asset-processes …
  28. 28. Example of Transformation
  29. 29. Example of Transformational Pattern
  30. 30. Another Example of Transformation and Transformational Pattern
  31. 31. Goal: Creating a library of transformational patterns Based on analysis of past transformations 1. Build a relevant fragment of FEM before the transformation 2. Build a relevant fragment of FEM after the transformation 3. Relate elements of these two models showing which elements of the original model have been used in the transformed model and how they have been change during the transformation 4. Abstract from the details of the given case creating a transformational pattern 5. Finding other examples of transformation that fit the constructed pattern
  32. 32. Just a comment on the type of BMI ● Three types of BMI 1. Industry model innovation - which amounts to change the position in value change, entering new markets, and/or other type of radical changes. 2. Revenue model innovation - which results in changes in how a company generates revenues, e.g. reconfiguring offerings and/or introducing new pricing models. 3. Enterprise model innovation – which involves innovating the structure of an enterprise, such as enterprise goals, business processes, products and/or services Giesen, E., Berman, S. J., Bell, R., Blitz, A.: Three ways to successfully innovate your business model. Strategy & Leadership, Vol. 35 Issue: 6, pp. 35(6), 27-33 (2007). Osterwalder, A., Pigneur, Y.: Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. Wiley, Hoboken, NJ,US (2014)
  33. 33. Links Example of Business Model Innovation in the InsightMaker: http://bit.ly/2qakWJR or use this link: https://insightmaker.com/insight/67969/Debating-Businesss-Model-Transformation-an- Example (Press "View story" in the left bottom corner and use Step forward in the right bottom corner) - Research paper with detailed information: https://link.springer.com/article/10.1007/s10270-016-0554-9 - One more example of a FEM model, from the paper above, related to teaching& learning https://insightmaker.com/insight/19994/Teaching-Learning
  34. 34. Q & A Thank you for your patience Questions and comments Please Contact Ilia Bider, ilia@dsv.su.se Erik Perjons, perjons@dsv.su.se
  35. 35. Contact Ilia Bider, ilia@dsv.su.se Erik Perjons, perjons@dsv.su.se

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