Information and Knowledge Management using ArcGIS ModelBuilder

Monika Magnusson
categories of business model elements in earlier studies labeled economic, operational and strategy.
Yunus et al. (2010) found that three similar elements are usually distinguished in academic literature;
the value proposition, the value constellation (how the company is organized to be able to deliver the
product or service to its customers) and the revenue model (focusing on how profit is created from
sales, costs, and capital employed). Shafer et al. (2010) divide their elements into components for
strategic choices, value network, create value and capture value. Demil and Lecocq (2010) build on
Penrose 1 ideas of how growth occurs in a firm as they suggest that the essential components in a
business models is resources & competences, value proposition, internal & external organization,
volume & structure of revenues, volume & structure of costs and margin. Three themes or areas for
business model thus emerge in earlier research:
Strategic issues concerning the value proposition and the market segment – What is our value
proposition and for whom? This includes deciding which products and services to offer and how
these add value to the customers.
Operational issues concerning how to organize the company and its interaction with the context to
be able to deliver the value propositions to the customers in an efficient way. This includes key
activities/business processes, partner network, distribution channels, necessary competences
and other resources.
Financial issues such as revenue model, cost structure and margins.
From an information system’s perspective these give little support for designing the information systems
that should make operational the strategies and business processes. The dominating point of
view in earlier research seems to be that the business model is separated from the business processes
and information and communication systems (c.f. Osterwalder & Pigneur, 2002; Petrovic et
al.,2001). Wu and Hisa (2008:102) argue for example that “A business model is a mediating construct
between technologies and business value”. de Reuver and Haaker (2009) however, suggest that the
construction of a mobile service business model includes design issues concerning the service domain
(including targeting and value creating elements), the technology domain, the organizational
domain and the financial domain.
The productivity paradox 2 has highlighted that the development of new information systems needs to
walk hand in hand with the development of business strategies and processes. This is acknowledged
in business model research although technology seldom is mentioned as an actual part of a business
model. Rather it is discussed how technology can be applied to implement the business model in the
next step. However, these arguments are contradicting since the concept of business models arose
as a result of new technologies such as Internet. Chesbrough and Rosenbloom (2002) for example
claim that the process of defining a business model “begins with articulating a value proposition latent
in the new technology”. Since then a number of new technologies and applications have found its way
into eCommerce; mobile phones and lately smart phones, iPads, information kiosks, Facebook, blogs
etc. Wu and Hisa (2008) claim that internet commerce and mobile commerce will be followed by ucommerce
– ubiquitous commerce enabled by wireless and/or embedded IT. All these innovations
offer slightly different opportunities, highly intertwined with the technology in question, which calls for
a necessity to incorporate the technology in the business model.
4. A business model framework
Earlier studies have suggested different ways of using frameworks to facilitate design and/or evaluation
of (e-) business models. Morris et al., (2005:729) presents a framework in “three increasingly
specific levels of decision making”. Gordijn et al. (2000) propose an ontology for describing actors and
the exchange of value object. Several have also showed how different business model elements can
be utilized to analyze and compare empirical business models (c.f. Demil & Lecocq, 2010; Yunus et
al., 2010). Osterwalder et al. (2005) present matrixes that assist the analysis of the alignment between
the business model elements and a) IT infrastructure services, b) the IT application portfolio
and c) requirement engineering goals. Furthermore, they also suggest a matrix for combining business
model elements with balanced scorecards. Neither of the sources in the literature review includes
information technology as a major component of business models although for example Weill
and Vitale (2002:18) state that an eBusiness model is “heavily IT enabled”. There are also numerous
1 Penrose, E.T. (1959), The Theory of the Growth of the Firm, John Wiley, New York.
2 The fact that the adoption of new IT often does not lead to an increased productivity in the organization was first acknowledged
by Erik Brynjolfsson (1998) “Beyond the Productivity Paradox: Computers are the Catalyst for Bigger Changes”, online
at http://ebusiness.mit.edu/erik/bpp.pdf (May 2011).
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