Network-Centric Design of Agile Business Models A Service-Dominant approach Paul Grefen School of Industrial Engineering
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
Service-Dominant Business
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.
Companies are organizing into agile networks Global competition requires business leadership. Excel where you lead, have others do the rest.
Servitization & networking create organizations with complexity & agility Customer orientation. Mass customization. Short life cycles. Fluid market conditions.
BASE/X Pyramid and Approach
S Strategy T Tactics O Operations Top-down thinking creates rigidity.
S Strategy T Tactics O Operations Bottom-up thinking creates chaos.
S BM SC BS The what: Business Goal Engineering The how: Business Operations Engineering
S BM SC BS SD business strategy SD business models Service compositions Business services
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
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
S Complexity is handled by strategic design. strategic design BM SC Resulting in modular business services. BS
S BM SC BS tactic design Agility is handled by tactic design. Resulting in fast, flexible business support.
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
Business Model Design in BASEX/X
S BM SC BS SD business strategy SD business models Service compositions Business services
S BM SC BS SD business strategy SD business models Service compositions Business services
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?
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
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
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
actor cost/benefit actor coproduction activity Advertiser create content content actor value proposition Customized Advertising visibility presence view pages User create pages Google
A bigger example: TraXP
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
Partner Partner Partner Partner TraXP Custo mer Partner Partner Partner
S BM SC BS SD business strategy SD business models Service compositions Business services
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
S BM SC BS SD business strategy SD business models Service compositions Business services
c/b cpa vp ViU /F c/b cpa vp ViU /I c/b cpa vp ViU /C c/b cpa vp ViU /X
seamless travel experience /X
Let s Get to Work
Free Ride A dam Event
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)
Nippur Flexible Technology Philips Portbase Flexible Intelligence Business Agility Flexible Collaboration TraXP Flexible Collaborative Business Models A dam
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