Tuesday, August 14, 2007

The relevance of business models: An integrative approach

What is the added value of working with business models for practitioners? I think three of the major benefits are the helicopter view, the structured way of working, and the integrative approach.

I will discuss the
integrative approach in this post. I work on mobile services in the health care using the STOF business blueprint method and model (Service, Technology, Organization, and Finance). In a 'valorization' project we try to identify what it takes to bring a specific (technological) prototype application to the market. In one of the business model design sessions a health professional was surprised to find out from an application engineer that the software of the prototype could not be one-on-one transferred into a market-ready product.

What is integrative about this? Firstly, the business model design sessions require the presence of persons from the business side and from the technology side, and stimulate a constructive discussion about their mutual dependence. Secondly, once it was clear that the software could not be
transferred, it was possible to think of the consequences for the organization and finance in a structured way. What capabilities are required to build a market-ready product and which organization has these capabilities? What investment does it require to build a market-ready product and what does that mean for the time-to-market?

What are your ideas and experiences on this? Do you see similar benefits? Are these really benefits of designing business models?


Erwin Fielt said...

A colleague mentioned that business models are also easy to play with. Could one maybe see them as a prototype?

Erwin Fielt said...

What has to be added is that the benefits are particularly relevant when there is unclarity about the business model of a new product (good or service) or the focus is upon business model innovation itself. In other cases the existing business model can implicitly be followed, for example, adding a new product to the assortment. However, even then it may be advisable to discuss business model issues. There may be new opportunities or threats.