Upload
others
View
0
Download
0
Embed Size (px)
Citation preview
MS MIT 8699 Process Innovation © Duane Truex, 2011
Day 2 Part I–Business Modeling Canvas : Innovation &
Prototyping -and-
Part II – Adopting Business Process Perspectives
MS MIT 8699 Process Innovation © Duane Truex, 2011
Three Types of Business Models Value chains
Value shops
Value networks
Based on Stabell and Fjeldstad, “Configuring Value for Competitive Advantage: On Chains, Shops, and Networks,” Strategic Management Journal, 19:1, 1998, pp. 413-437.
MS MIT 8699 Process Innovation © Duane Truex, 2011
Logic of value creation Value chain: Transformation of inputs into
products Manufacturers
Value shop: Solving customer problems Professional services: medicine, law, architecture,
engineering
Network: Linking customers who wish to be independent Telephone companies, banks, insurance companies
MS MIT 8699 Process Innovation © Duane Truex, 2011
Brief review Parts of the canvas are?
MS MIT 8699 Process Innovation © Duane Truex, 2011
5
WHAT WHO HOW
HOW MUCH
MS MIT 8699 Process Innovation © Duane Truex, 2011
CANVAS OVERLAY OFFER
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY ACTIVITIES
KEY PARTNERS
KEY RESOURCES
MS MIT 8699 Process Innovation © Duane Truex, 2011
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
CHANNELS
VALUE PROPOSITIONS
COST $TRUCTURE
REVENUE $TREAMS
KEY PARTNERS
KEY ACTIVITIES
KEY RESOURCES
bird’s eye view
MS MIT 8699 Process Innovation © Duane Truex, 2011
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY ACTIVITIES
PARTNER NETWORK
KEY RESOURCES
the business model canvas
3rd party sellers
warehouses &
inventory
retail stuff over the web
sales margin
amazon.com
affiliates
mass-customization
IT infrastructure
delivery
affiliates
people
fulfillment
content management
fulfillment technology & content
marketing
IT management
mass customers globally
MS MIT 8699 Process Innovation © Duane Truex, 2011
IT Infrastructure Services are Amazon.com’s big strategic bet!
MS MIT 8699 Process Innovation © Duane Truex, 2011
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE STREAMS COST STRUCTURE
KEY ACTIVITIES
PARTNER NETWORK
KEY RESOURCES
the business model canvas
3rd party sellers
warehouses &
inventory
retail stuff over the web
sales margin
mass customers globally
amazon.com
affiliates
mass-customization
delivery
affiliates
people
fulfillment
content management
fulfillment
IT services
(e.g. S3, EC2) Internet interfaces
Internet companies
utility fees
IT management
IT infrastructure
marketing technology &
content
MS MIT 8699 Process Innovation © Duane Truex, 2011
Simply….INNOVATION
Discuss the Chesbrough “Bringing Open Innovation to Services” MIT Sloan Management Review article
MS MIT 8699 Process Innovation © Duane Truex, 2011
What is unique about this model? What is YOUR key take-away? How might we apply his points?
break-out
MS MIT 8699 Process Innovation © Duane Truex, 2011
How to foster Service Innovation
Work Closely with customers to develop new solutions
Focus offers on utility, rather than on the product
Embed your company in your customer’s organization
MS MIT 8699 Process Innovation © Duane Truex, 2011
?"the skype‘s business model
MS MIT 8699 Process Innovation © Duane Truex, 2011
skype.com
Logitech ...
SME businesses
mass customers globally
free VOIP &
video calling
cheap calls (skype out)
mass customization
fraud management
software development
software
development
complaint management
software
software developers
Logitech
payment providers
telco partners
skype out
hardware sales
free
MS MIT 8699 Process Innovation © Duane Truex, 2011
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
CHANNELS
VALUE PROPOSITIONS
COST $TRUCTURE
REVENUE $TREAMS
KEY PARTNERS
KEY ACTIVITIES
KEY RESOURCES
free VoIP &
video calling
MS MIT 8699 Process Innovation © Duane Truex, 2011
mass customized
VALUE PROPOSITIONS
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE $TREAMS
KEY ACTIVITIES
free VoIP &
video calling
Logitech partnership
Skype.com
SME businesses
mass customers globally cheap calls
(Skype Out)
hardware sales
COST $TRUCTURE
software
development
KEY RESOURCES
KEY PARTNERS
software
developers
Software
telco partners
fraud management
software development
payment providers
Logitech
free Skype Out complaint management
MS MIT 8699 Process Innovation © Duane Truex, 2011
RESULTS…"500 million users
1 billion revenue 8 billion in capitalization
MS MIT 8699 Process Innovation © Duane Truex, 2011
?"what is the difference with the Telco business model?"
MS MIT 8699 Process Innovation © Duane Truex, 2011
skype.com
Logitech ...
SME businesses
mass customers globally
free VOIP & video
calling
cheap calls (skype out)
mass customization
fraud management
software development
software development complaint management
software
software developers
Logitech
payment providers
telco partners
skype out
hardware sales
free
20
global coverage!
100% low cost!
100% automatic!
roughly similar but cheaper/free!
no network!
software developm.!
not all have to pay!
software company!
outsourcing non-core!
Vs. Telco
MS MIT 8699 Process Innovation © Duane Truex, 2011
mass customized
OFFER
DISTRIBUTION CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE STREAMS
KEY ACTIVITIES
free VoIP & video
calling
Logitech partnership
Skype.com
SME businesses
mass customers globally cheap calls
(Skype Out)
hardware sales
COST STRUCTURE
software
development
KEY RESOURCES
PARTNER NETWORK
software
developers
Software
telco partners
fraud management
software development
payment providers
Logitech
free Skype Out complaint management
global coverage!
100% low cost!
100% automatic!
roughly similar but cheaper/free!
no network!
software developm.!
not all have to pay!
software company!
outsourcing non-core!
Vs. Telco
MS MIT 8699 Process Innovation © Duane Truex, 2011
break-out
Examine each team’s model in formation….
MS MIT 8699 Process Innovation © Duane Truex, 2011
analytical thinking"
intuitive thinking"
design thinking
MS MIT 8699 Process Innovation © Duane Truex, 2011
business people don’t just
need to understand
designers better; they need
to become designers
Roger Martin, Dean Rotman School "
“
”
MS MIT 8699 Process Innovation © Duane Truex, 2011
the designer’s
toolkit ...
MS MIT 8699 Process Innovation © Duane Truex, 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Business Architecture expressed as Component Business Models
Component Business Model is a Matrix
Horizontal: Business competencies Not just organization chart
Vertical: Direct, control, execute Use these to organize components
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Form of a Component Business Model
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Dimensions of a Business Component
Business purpose Why does this component exist?
Activities: What actions does it perform?
Resources What assets are required, including human, technical, and other
resources?
Governance How are activities and resources managed?
Business services What is received from and offered to other components?
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
CBM Example
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Where are the Priorities for Change?
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Toward a “service-oriented” view of a firm
What is a service?
Is it possible to contribute to a firm’s operation without performing service for someone?
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Service-oriented view of a firm
Based on article in IBM Systems Journal
Each component receives and produces services.
We can take the same approach when the components are subdivided into service systems.
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Examples of Service Systems (from MBA students at Georgia State)
Calculating rates for insurance renewals
Managing software development projects
Acquiring clients at a professional service firm
Receiving materials at a large warehouse
Approving real estate loan applications
Planning and dispatching trucking services
Performing pre-employment background checks
Performing financial planning for wealthy individuals
Scheduling and tracking health service appointments
Operating an engineering call center
Purchasing advertising services
Determining salary increases
Collecting and reporting sales data for a wholesaler
Planning for outages in key real time information systems
Invoicing for construction work
MS MIT 8699 Process Innovation © Duane Truex, 2011
Ideally cover any type of service
Services for internal and/or external customers
Automated, IT-reliant, and non-automated services
Customized, semi-customized, and commodity services
Personal and impersonal services
Repetitive and non-repetitive services
Long-term and short-term services
Services with varying degrees of self-service responsibilities.
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Examples for testing different definitions of service
Doctor provides medical care
Circus performance
Produce statue of grandiose CEO of an American company
Painter paints office in your business
DHL delivers a package to you
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Alternative Definitions of Service Bring Valuable Ideas and Implications
A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. (Kotler and Keller, 2006)
A service is a time-perishable, intangible experience performed for a customer acting in the role of a co-producer (Fitzsimmons and Fitzsimmons 2006).
“With service processes, the customer provides significant inputs into the production process.” (Sampson and Froehle, 2006)
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Other definitions of service Services are capabilities or competencies that one
person, organization, enterprise, or system provides for another (Vargo and Lusch, 2004).
A service is a provider-client interaction that creates and captures value (IBM Research 2004).
“In general, the definitions [of service] emphasize a simultaneous or near-simultaneous exchange of production and consumption, transformation in the experience and value that customers receive from engagement with providers, and intangibility in that goods are not exchanged.” (Rai and Sambamurthy, 2006)
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Characteristics often Associated with Services
Co-production/ co-creation of value
Intangibility
Customization
Simultaneity of production and consumption
Not resulting in ownership of anything
Time-perishability
Centrality of customer interactions
Centrality of customer experiences
The useful question: Positioning of specific service systems along continuous design dimensions implied by these characteristics.
MS MIT 8699 Process Innovation © Duane Truex, 2011
Products and services
Products are produced by acts performed for others. Thus, products are like services in a different form.
This is consistent with service-dominant logic.
Characteristics are associated with products and/or with services.
Product versus service is a valuable design dimension even though product vs. service as a classification is not very useful for design.
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Product vs. Service as a Design Dimension
(c) Steven Alter 2011
PRODUCT –LIKE <----------------- > SERVICE- LIKE
Standard <----------------- > Customized
Tangible <----------------- > Intangible
Transferred and used <----------------- > Consumed as produced
Goods <----------------- > An experience
Transaction-based <----------------- > Relationship-based
Produced <----------------- > Co-produced
MS MIT 8699 Process Innovation © Duane Truex, 2011
Services are co-produced to varying extents
Almost all services start with a service request, and therefore are co-produced to some extent.
Others involve extensive service interactions.
Implication: Co-produced or not is not the interesting question. The interesting question is the desired extent of co-production.
(c) Steven Alter 2011
MS MIT 8699 Process Innovation © Duane Truex, 2011
Value from services Value-in-use vs. value-in-action
Customer value can occur during service processes and after service processes have completed.
(c) Steven Alter 2011