2014 asdenca - capability-based business model transformation
DESCRIPTION
These slides present an approach to support organizational change by the use of a capability based recursive analysis, and a set of improvement patterns. The recursive analysis is based on resource types, and capability sub-types. Also the approach is illustrated by using several examples taken from the industry.TRANSCRIPT
Capability-based Business Model Transformation
Martin Henkel, Ilia Bider, Erik Perjons
Department of Computer and Systems Sciences,
Stockholm University, Sweden
{martinh,ilia,perjons}@dsv.su.se
Motivation
● Ever changing business environment of today
● Organizations should adapt to changes to survive
● Also need to use opportunities the changes give to grow
and prospect by offering new products and services
● Any organization in subject of changes in the
environment, or having the desire to improve, needs to
change their processes, personnel and their use of
resources.
HOW to design the change?
* the ability of an organization to manage its resources to accomplish a task.
Existing approaches
Business model transformation with a help of Canvas
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.
Problems with the existing approaches
● Changes take their departure in an organizations existing capabilities (the ability of an organization to manage its resources to accomplish a task).
● To support change, there is a need to understand and assess an organization’s capabilities.
● There is a need to have a structured approach for– Discovering and assessing capability– Rearranging them for a new usage
Are there satisfactory answers?
Contribution
● A modelling approach that describes an organization as a recursive structure of capabilities, including the resources being used.
● A set of initial transformation patterns that allows an organization to find out possible new capabilities.
Background
Our previous work:Bider, I., Perjons, E., & Elias, M. (2012). Untangling the Dynamic Structure of an Enterprise by Applying a Fractal Approach to Business Processes. In The Practice of Enterprise Modeling (pp. 61-75). Springer Berlin Heidelberg
Original goal:Find all business processes in the company, even the ones that not many people are aware of
Approach:Start with a main (visible) process and find out all other processes that needs to be in place in order to run the main one
Background: Process-assets and asset-processes archetypes
Process-assets archetype for a main process
Background: Process-assets and asset-processes archetypes
Assets-processes archetype
Background: Conclusions
In addition to getting all processesthe uncovered dynamic structure of an enterprise can support:
1. strategic planning. For example, when sales plans a new campaign that will bring new customers, all assets required by the corresponding main process should be adjusted to satisfy the larger number of customers. This includes workforce, suppliers, infrastructure, etc.
2. change management. For example, a product manufacturing company could decide to become an engineering company. Such a decision can be made when manufacturing becomes unprofitable, while the company still have a very strong engineering department.
3. discovering and preventing misbalances between its business processes. For example, a supporting process can starts behaving as it were a main one disturbing the balance of the organizational structure. This is typical for IT–departments that may start finding external "customers" for software developed for internal needs.
Contribution
● A modelling approach that describes an organization as a recursive structure of capabilities, including the resources being used.
● A set of initial transformation patterns that allows an organization to find out possible new capabilities.
Overview of the approach
Step1, uncovering the organizational structure
● Starts with the so-called main capability
● Continue with discovering of so-called supporting capabilities by examining the use of different types of resources
● Result: A tree structure of capabilities
Step 2, transforming the business structure identified during step 1. The aim is to identify sub-capabilities that can be transformed, thereby creating a new business model for the organization.
● Uses pattern for the transformation
● Result: A new tree structure of capabilities
Step1, uncovering the organizational structure
1. Start with the main capabilities. These are capabilities that produce value for which some of the enterprise external stakeholders are ready to pay.
2. Identify resources. Proceed with following up resources that are needed to run the main capabilities.This step is Guided by Capability resource types.
3. Identify supporting capabilities. Each Resource requires a set of so-called supporting capabilities.This step is guided by Capability sub-types.
Repeat 2-3
Product manufacturing
Main capability
CustomersWorkers on the conveyor belt
Machines and IT for production
SuppliersProduct design
Paying stakeholdersWorkforce Infrastructure
Execution templatePartners
Sales & Marketing
Endingcustomer
relationships
CustomerRelationshipManagement
Acquire Maintain Retire
Workers IT/computers
Workforce Infrastructure
Capability resource types
● Paying stakeholders
● Workforce
● Execution templates
● Partners
● Infrastructure
Note:
● All resources are equally important
● To be of use, each resource need to available in the right
capacity.
Capability sub-types
● Acquire – sub-capabilities that result in the enterprise acquiring a new resource of a given type.
● Maintain – sub-capabilities that help to keep existing resources in the right shape to be useful in the capability of a given type.
● Retire – sub-capabilities that phase out resources that no longer can be used as part of the capability.
Customers
Resource
Sales & Marketing
Endingcustomer
relationships
CustomerRelationshipManagement
Acquire Maintain Retire
Step 2, transforming the business structure
● Use the model with resources and capabilities as defined in Step 1.
● Apply capability transformation patterns to change the structure
Two initial patterns described in the paper:
● Externalising a capability. This involves taking a capability that the enterprise has and market it toward its customers.
● Add value to a capability. Extend existing capabilities, or embed them into new main capabilities.
Example case
Example case
● Describes the changes a software development company went through
● Initial business: Traditional software consulting company, working in several domains such as healthcare and financials. Main capability offered to customers: software development.
● Impetus for change:A main customer was lost, leaving the company with several software developers without a project. To sustain, the company was thus in need of re-organising its capabilities.
Step1, uncovering the organizational structure
Use the defined resource types to find the resources that the main capability uses.
Resource types
Resources
Step 2, transforming the business structure
Selected transformation pattern: Add value to a capability. This entails a “re-packaging” and extension of an existing capability by adding a new main capability that can be offered to the customers.
Main question: “Can we combine this capability with other , new, capabilities in order to provide value to our customers?”
Step2, continued
old capabilityUsed for acquiring/building a software product.
Redesigned main capability
Conclusion
● A practical tool for uncovering/documenting a business in form of capabilities. The process is guided by both capability sub-types and resource types.
● The transformation patterns guide the formulation of a new structure
Future work:
● More transformation patterns need to be identified
● Validation, through historical empirical evaluation or case studies