Network-Centric Design of Agile Business Models

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1 Network-Centric Design of Agile Business Models A Service-Dominant approach Paul Grefen School of Industrial Engineering

2 1. Service-dominant business 2. BASE/X pyramid and approach 3. Business model design in BASE/X 4. A bigger example 5. Let s get to work

3 Service-Dominant Business

7 Markets are refocusing from assets to services The value is in the functionality of an asset. The effort is in the ownership of an asset.

8 Companies are organizing into agile networks Global competition requires business leadership. Excel where you lead, have others do the rest.

9 Servitization & networking create organizations with complexity & agility Customer orientation. Mass customization. Short life cycles. Fluid market conditions.

10 BASE/X Pyramid and Approach

11 S Strategy T Tactics O Operations Top-down thinking creates rigidity.

12 S Strategy T Tactics O Operations Bottom-up thinking creates chaos.

13 S BM SC BS The what: Business Goal Engineering The how: Business Operations Engineering

14 S BM SC BS SD business strategy SD business models Service compositions Business services

15 S BM SC BS The what of business exists in two forms: 1.The stable part (identity): Business Strategy 2.The agile part (offerings): Business Models

16 S BM SC BS The how of business exists in two forms: 1.The stable part (capabilities): Business Services 2.The agile part (combinations): Service Compositions

17 S Complexity is handled by strategic design. strategic design BM SC Resulting in modular business services. BS

18 S BM SC BS tactic design Agility is handled by tactic design. Resulting in fast, flexible business support.

19 Strategic Design Loop: Evolutionary alignment of identity and capabilities Tactic Design Loop: Revolutionary conception of market offerings S BM SC BS Confrontation of Goals: Alignment of identity and market offerings Confrontation of Means: Alignment of required and available capabilities

offerings S BM SC BS Confrontation of Goals: Alignment of identity and

20 Business Model Design in BASEX/X

21 S BM SC BS SD business strategy SD business models Service compositions Business services

22 S BM SC BS SD business strategy SD business models Service compositions Business services

23 actor cost/benefit The value-in-use: what is the added value for the customer? actor coproduction activity actor value proposition co-created value in use Who is the customer?

24 What are the elements that parties in the network contribute to the value-in-use? actor cost/benefit actor coproduction activity actor value proposition co-created value in use

25 Which acivities must be performed by the network in collaboration to realize the value-in-use? actor cost/benefit actor coproduction activity actor value proposition co-created value in use

26 What are the costs/benefits for each actor (financial and non-financial) and does this lead to a viable business network? actor cost/benefit actor coproduction activity actor value proposition co-created value in use

27 actor cost/benefit actor coproduction activity Advertiser create content content actor value proposition Customized Advertising visibility presence view pages User create pages Google

28 A bigger example: TraXP

29 Offer a seamless, complete travel experience to various customer groups Base that on advanced customer profiles that record preferences Use a broad spectrum of travel services that can be flexibly combined Execute the combinations in a highly networked, real-time fashion Be the central orchestrator in these networks

31 Partner Partner Partner Partner TraXP Custo mer Partner Partner Partner

32 S BM SC BS SD business strategy SD business models Service compositions Business services

34 Customer Any individual traveller, business or private Value-in-Use Experience Seamless Travel Experience one-shot and guided Interactions Profile maintenance Trip requirements Travel instructions Core Services Travel configuration, optimization, execution Core Partners Transport, accomm., inform. provider Service Eco-System Focal Organization TraXP Enriching Services Social networking, insurance, communic., cost claiming Enriching Partners Social network, insurance firm, comm. & docum. handler Core Relationships Multiple relations; transactional; income sharing fixed or variable rates Collaboration Management Enriching Relationships Single relation; relational; Visibility/goodwill sharing; Fixed-rate income sharing

35 S BM SC BS SD business strategy SD business models Service compositions Business services

37 c/b cpa vp ViU /F c/b cpa vp ViU /I c/b cpa vp ViU /C c/b cpa vp ViU /X

38 seamless travel experience /X

39 Let s Get to Work

41 Free Ride A dam Event

42 Group 1 (K10) Sander van den Berg (DHL) Reinier Remmelink (Philips) Hans Leijen (Oce) Ton de Kok (ESCF) Group 2 (K10) Noud Gademann (Ortec) Dario Vettese (Valeant) Hans Smit (Philips) Elena Tufan (TU/e) Group 3 (K16) Gerwin van Harskamp (Valeant) Pieter Rambags (Nippur) Jan Henk Penninkhof (Eastman) Ellen de Weerd (TU/e) Group 4 (K8) Tessa Brand (Vanderlande) Hubert Rulkens (Philips) Karel Parre (Boskalis) Marten van der Velde (Portbase)

43 Nippur Flexible Technology Philips Portbase Flexible Intelligence Business Agility Flexible Collaboration TraXP Flexible Collaborative Business Models A dam

44 1. Select a case 2. Select a non-traditional driver 3. Identify a customer (segment) 4. Identify a value-in-use (fee free to push limits) 5. Create a business model radar blueprint

Service-Dominant Business Engineering: From Strategy to Service Orchestration

Service-Dominant Business Engineering: From Strategy to Service Orchestration Oktay Turetken, Paul Grefen School of Industrial Engineering Internet of Things (2IMN15), TU/e, 07.Dec.2015 Outline Context