Business Model Designing the 9 blocks

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1 GRUPPO TELECOM ITALIA Catania, 28 Marzo 2014 Business Model Designing the 9 blocks The Open Innovation perspective Telecom Italia Head of Joint Open Lab

2 Agenda Business Model Innovation The Business Model Canvas Open Innovation Paradigm Telecom Italia s Joint Open Labs Catania

3 Why innovate the Business Model? Starting point Innovation is invention taken to market Not technology per se, but technology in use Create a value proposition for the research output Go to market at right timing and with right moves 4

technology per se, but technology in use Create a value

4 The Business Model Canvas Crafting tool to build new Business Models 5

5 The Business Model Canvas The «left brain» of the canvas 6

6 Key Resources The most important assets required to make a business model work. Allows an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customers and earn Revenues. Physical: physical assets, manufacturing facilities, machines, buildings, vehicles, point-of-sales, distribution networks, Intellectual: brands, proprietary knowledge, patents, copyrights, customer databases, Human: people value - Particularly important in knowledge-intensive & creative industries Financial: financial resources or financial guarantees, cash, lines of credit, stockoption pool 7

Physical: physical assets, manufacturing facilities, machines, buildings, vehicles, point-of-sales, distribution networks, Intellectual: brands,

7 Key Activities The most important things a company must do to operate successfully and make its business model work. Required to create and offer a Value Proposition, reach markets, maintain Customer Relationships and earn Revenues. Production: designing, making, delivering, Relevant in manufacturing firms Problem Solving: new solutions to individual customer products, Calls for knowledge management & continuous training. Relevant in service organizations Platform Network: networks, matchmaking platforms, software, brands. Requires platform management, service provisioning, platform promotion 8

Production: designing, making, delivering, Relevant in manufacturing firms Problem Solving: new solutions to individual customer products, Calls for

8 Key Partnerships The network of suppliers and partners that make the business model work. Creating alliances enables optimization and economies of scale (outsourcing, sharing infrastructure), reduction of risks (competitive environment), acquisition of particular resources and activities (knowledge, licenses, access to customers). Strategic Alliances: between noncompetitors Coopetition: strategic partnerships between competitors Joint Ventures: to develop new businesses Buyer-Supplier: relationships to assure reliable supplies 9

environment), acquisition of particular resources and activities (knowledge, licenses, access to customers).

9 Cost Structure The most important costs that incur to operate a business model, after having identified the Key Resources, Key Activities and Key Partnerships. Creating and delivering Value, maintaining Customer Relationships and generating Revenue all incur costs. Cost Driven: focus on minimizing costs (lowcost, maximum automation, extensive outsourcing) Value Driven: focus on value creation (premium, high degree of personalized service) Cost Structures: Fixed Costs vs. Variable Costs Economies of scale vs. Economies of Scope 10

Creating and delivering Value, maintaining Customer Relationships and generating Revenue all incur costs.

10 How to use the Canvas* * A. Osterwalder, «Business Model Generation» 11

11 What is Open Innovation? Opening the organizational bounderies Closed Innovation Open Innovation 12

12 Telecom Italia s Joint Open Labs Innovating Innovation: shifting the Paradigm In House Corporate Open 13

13 Telecom Italia s Joint Open Labs Key Resources: moving into Top Universities Torino Milano Trento Pisa Catania 14

Spinoff Crowd sourcing Joint Open Labs Joint Open Labs Joint Open Lab University

14 Telecom Italia s Joint Open Labs Key Activities: territory as a Living Lab SME Hi Tech Other Industrial partners Incubators Prototypes & New Services Startup & Spinoff Crowd sourcing Joint Open Labs Joint Open Labs Joint Open Lab University StartUps Field Trials City as a Living Lab with diverse actors (municipalities,...) 15

15 Telecom Italia s Joint Open Labs Key Partnerships: building the Ecosystem 16

16 Telecom Italia s Joint Open Labs Cost Structure: leveraging investments on Project Financing Gaining a multiplicative effect 17

Wireless Applications in multi-device Ecosystems WAVE - where we are Telecom Italia brings its expertise and know-how to Catania, in the heart of the Cittadella

17 Wireless Applications in multi-device Ecosystems WAVE - where we are Telecom Italia brings its expertise and know-how to Catania, in the heart of the Cittadella Universitaria campus, bridging together technological innovation with the local academic excellence and the entrepreneurial spirit of the Etna Valley. KickOff WAVE: LIVE on 18

Universitaria campus, bridging together technological innovation with the local

smart objects, TV ) new usage scenarios & innovative business models WAVE We exploit: future generation technological enablers

18 Wireless Applications in multi-device Ecosystems WAVE - what we do We realize: innovative mobile applications, on versatile software development platforms, exploiting the potentialities of an ecosystem of connected devices (smartphone, tablet, PC, smart objects, TV ) new usage scenarios & innovative business models WAVE We exploit: future generation technological enablers (LTE, Mobile Cloud, Innovative Data Centers, ) Technology Push Integration of technological opportunities with business needs Market Pull 19

19 Thank You! TELECOM ITALIA Innovation Head of Joint Open Lab WAVE 20

Innovation in Business Models for Start-ups. Prof. Dr. Utz Dornberger in4in Workshop Rwanda, 2014

Innovation in Business Models for Start-ups Prof. Dr. Utz Dornberger in4in Workshop Rwanda, 2014 Business idea Many existent enterprises have the goal to develop a new sui-generis product Almost every