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A value based approach to business models


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A value based approach to business models

  1. 1. A value based approach to business models
  2. 2. GoalTo develop a clear insight into the transitionprocess from a traditional business model tothe SaaS business model
  3. 3. Objectives• Review the value theory in context of business models• Review business model frameworks in context of the value theory• Develop or extend the existing business model framework so that it is in sync with the value theory• Create a business model description of the participating company and consolidate existing SaaS literature• Compare and analyze the traditional, SaaS business models and SaaS trends in light of the business model framework• Develop clear insight and draft recommendations
  4. 4. Methodology• Qualitative research• Case study approach• Primary data (in depth interviews and customer survey)• Secondary data (website, product brochures etc.)
  5. 5. Theory
  6. 6. Case studyExact Compact’s value network
  7. 7. Exact Online’s value network
  8. 8. Findings• SaaS does not necessarily open up the long tail segment for all the companies => this is a choice for vendors• There is a change in the value being provided under the SaaS business model, i.e.: service• Customer needs was found to be the most important element of motivation to develop SaaS offerings• SaaS creates customer benefits at three levels (Dean & Saleh, 2009) – Utility level (example: service instead of software) – Process transformational level (example: ability to enter and manipulate data from any location) – Business model innovation level (example: transaction based revenue, ecosystem partners)
  9. 9. Findings• Number and importance of electronic channels increases• For example: provide customer self service in all phases of the sales cycle but also provide access to employees and referees via telephone, e-mail and social media
  10. 10. Recommendations• Customer needs (value) should be at the heart of a business model• E.g. sharing data with the accountant Understand the end results customers want to achieve by using your product• A balance has to be achieved between organizational value and customer value• E.g. customer self service versus human responsiveness• E.g. pricing based on both costs and customer value
  11. 11. Recommendations• SaaS companies should explore the ecosystem approach to create, deliver and capture value• E.g. how to improve the customer’s business by providing seamless upgrading of whatever component• SaaS companies should try to create economies of scale wherever and whenever possible. Special attention should be paid to customer value while creating economies of scale• E.g. partnerships with notary business, accountants, consultants, banks?
  12. 12. Recommendations• Rethink revenue logic in light of customers needs, the benefits customers derive from using products & services, customers willingness to pay, cost structures and competitors pricing strategies (Woodruff 1997, Harmon, Demirkan, Hefley & Ausekils, 2009)• Revenue model should change under SaaS – may impact PD• Modify contracts that govern customer relationships and pay special attention to SLAs, security measures, liabilites, data backup and management, integrations and customizationsContract model should change under SaaS – may impact PD
  13. 13. Recommendations• SaaS providers should work towards building transparency in order to give customers clear insight into their processes of handling infrastructure, security and reliability, example: (Botteri et al., 2010)
  14. 14. StatusCustomer survey• Exact: 251 responses• AFAS: need to send out the customer survey
  15. 15. A BIG thank you to all of you for your supportand cooperation - Austin D’souza