Enterprise social networks : A business model perspective

Enterprise Social Networks continue to be adopted by organisations looking to increase collaboration between employees, customers and industry partners. Offering a varied range of features and functionality, this technology can be distinguished by the underlying business models that providers of this software deploy. This study identifies and describes the different business models through an analysis of leading Enterprise Social Networks: Yammer, Chatter, SharePoint, Connections, Jive, Facebook and Twitter. 

A key contribution of this research is the identification of consumer and corporate models as extreme approaches. These findings align well with research on the adoption of Enterprise Social Networks that has discussed bottom-up and top-down approaches. Of specific interest are hybrid models that wrap a corporate model within a consumer model and may, therefore, provide synergies on both models. From a broader perspective, this can be seen as the merging of the corporate and consumer markets for IT products and services.

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Business Model Canvas or Business Model thinking?

The Business Model Canvas presents us with a great tool for the design and innovation of business models. As with every specific approach or tool, the Canvas can also bias or blind us. This can be caused by the features of the tool itself as well as from the way in which the tool is (wrongly) used.

As with every solution for solving a problem, the features of the Business Model Canvas are determined by the framing and scoping of the problem. This means that compared to other business model frameworks and tools, the Business Model Canvas has certain strengths and weaknesses (see also my discussion on different frameworks here). For example, some of specific areas where the Business Model Canvas could fall short in are related to business networks, service logic and business dynamics.

Another potential hazard with using the Business Model Canvas is that its use gets reduced to just filling out the individual building blocks. This will not provide a holistic perspective on value creation as it omits the relationships between the building blocks, e.g. Dell could offer direct sales because they targeted corporate customers going for a repeat purchase. Moreover, every business model has an underlying rational or story.  This is easily missed when one limits oneself to the individual building blocks. The idea behind Southwest Airlines' business model can be described as making flying an alternative for taking a bus or car.

So while the Business Model Canvas can be very useful for supporting the design and innovation of business models, we should not fall into the trap that we therefore assume that we do not need to also think more broadly about the logic for creating and capturing customer value.