The Business Model Ontology - a proposition in a design ... - HEC

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Knowledge of the Problem Domain calls e 3 -value. This methodology is based on a generic value-oriented ontology specifying what's in an e-business model. On the one hand it has the goal of improving communication and decision making related to e-business and on the other hand it aims at enhancing and sharpening the understanding of e-business operations and requirements through scenario analysis and quantification (cf. 3.1.5). e 3 -value consists of a number of generic concepts and relationships illustrated in Figure 19. Gordijn specifies actors that produce, distribute or consume objects of value by performing value activities. The objects of value are exchanged via value interfaces of actors or activities. Value interfaces have value ports offering or requesting objects of value. The trade of value objects is represented by value exchanges, which interconnect value ports of actors or value interfaces. Actor assigned to Value with similar 0..1 1..n Interface 1..n 0..1 1 1..n 1 Market Segment Value Offering performed by has assigned to 0..n 0..1 Value Activity 1..n contains 1..n Value Exchange between 0..n 2 1..n Value Port offers/request 0..n 1 Value Object Figure 19: e 3 -value ontology for e-business (Gordijn, Akkermans et al. 2001) The e 3 -value methodology has been applied to a real world business case and evaluated one-year-anda-half later (Gordijn and Akkermans 2003). Lessons learned include that the method is lacking a marketing perspective, that business units should be included in the analysis and that it would be helpful to work with evolutionary scenarios. However, Gordijn and Akkermans are positive about their methodology enhancing the common understanding of business ideas, which was not possible by traditional e.g. verbal ways. Furthermore, they believe that a model-based approach to business problems can help asses the consequences of changes in business models. 3.1.6 Business Models and Change Because models are static by nature and simply take a snapshot of a current situation, a number of authors add a time trajectory to business models and introduce the concept of change. This allows them to go from a current state or business model to a desired state or new business model. Linder and Cantrell (2000), for example, mention that business models are a picture at a point in time, but that most firm’s business models are under constant pressure to change because of numerous pressures in the firm’s environment (e.g. technology, law and competition)(cf. also 2.3). Therefore and in order to coordinate and channel change inside a company they introduce so-called change models. They distinguish four basic types according to their degree to which they change the core logic of a company, namely realization models, renewal models, extension models and journey models (see Figure 20). The realization model focuses on small changes in the existing business model of a firm in order to maximize its potential. It often involves preoccupations, such as brand maintenance, product line extensions, geographic expansions or additional sales channels. Renewal models are characterized by consistent revitalization of product and service platforms, brands, cost structures and technology bases. According to Linder and Cantrell a renewing firm leverages its core skills to create new positions on the price/value curve. This kind of change model also often involves attacking untouched markets and introducing new retailing formats. Extension models expand businesses to cover new ground. An extending company stretches its operating model to include new markets, value chain functions, and product and service lines. This kind of model often involves forward, backward and 36
The Business Model Ontology - a proposition in a design science approach horizontal integration in the value chain. Finally, journey models provoke most change and take a company to a complete new business model. Journey model Extension model Renewal model Realization model No business model change Business model change Degree to which core logic changes Figure 20: Change Models (Linder and Cantrell 2000) Tapscott, Ticoll et al. (2000) propose a change methodology in six steps towards creating a b-web company (cf. Figure 15 and Table 4). The first step consists of describing the current value proposition by defining end-customers, offerings, customer value and the value proposition’s strengths and weaknesses from a customer’s perspective. The second step consists of disaggregating and identifying the entities that contribute to the total value-creation system. The following step envisions b-web enable value. In other words, planners must step outside their day-to-day mental models to develop creative and discontinuous views of doing business. This means asking what new business models – ways of creating, setting, and delivering value and facilitating relationships with customers, suppliers, and partners – could be envisaged. In the fourth step the company must reaggregate. This step entails repopulating the categories of value contributors and assigning contributions to the various classes of participants. The fifth step consists of preparing a value map, which is a graphical depiction of how a b-web operates. It identifies the participants, such as strategic partners, suppliers and customers and their exchanges of value. The last step consists of doing the b-web mix, which means considering how each type and subtype might enhance customer value, provide competitive differentiation and advantage and reduce costs for the participants. In his e 3 -value methodology Gordijn (2002) outlines a change methodology based on value model deconstruction and reconstruction, which is mainly inspired by Tapscott, Ticoll et al. (2000) Evans and Wurster (2000) and Timmers (1999). He splits the process into two questions, namely, which value adding activities exist, and which actors are willing to perform these activities. Petrovic, Kittl et al. (2001) specify that the improvement and change of a real world business model is related to the ability to change a manager’s mental model. According to them, people often talk about reducing time and costs via automating or redesigning processes when really they want to improve their business model. To change this Petrovic, Kittl et al. introduce double-loop learning to explicit mental models through a systemic business model concept in order to provide a holistic, broad, longterm and dynamic view to help redesign business models. Papakiriakopoulos and Poulymenakou (2001) propose a transformation method for constructing e- business models based on their analytical framework outlined in section 3.1.3.1. The method includes 4 steps, ranging from the identification of players, over highlighting the value flows and identifying key competitive drivers to constructing a feedback chain. Thus, the first step consists of defining the context and the scope of the business model. This means identifying the list of stakeholders and describing their strategy. The second step consists of drawing the relationships and flows between the actors in order to capture the value chain concepts. Papakiriakopoulos and Poulymenakou recognize two main flows, which are the financial flows and the communication flows. The next step of this methodology is about identifying the nature of competition in the marketplace. The fourth and final step of the method aims at constructing a so called "feedback chain". The objective of the feedback chain is to examine and collect all the information resources that could help and empower some 37
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