the ecosystem value framework · “the model proved to be an excellent way of discussing the...

The Ecosystem Value Framework: Supporting Managers to Understand

Value Exchange between Core Businesses in Service Ecosystems

Florian UrmetzerVeronica Martinez

Andy Neely

Agenda

• Background to the study

• Research question

• Research phases

• The Ecosystem Value Canvas

• Value transfer between partners in an ecosystem

• Summary

Problem statement?

1. Request for research from practitioners

2. Call for research in understanding value (Lepak et al., 2007)

EcosystemValueCreation

ValueDelivery

CustomerValueCapture

Notallvalueisdefinedatthepointofservice

delivery

WhocreatesValue?Whocapturesatthis

point?

Lepak,D.P.,Smith,K.E.N.G.andTaylor,M.S.(2007),“IntroductionToSpecialTopicForumValueCreationAndValueCapture:AMultilevelPerspective”,TheAcademyofManagementReview,Vol.32No.1,pp.180–194.

Theory building

• This study is based on the resource dependence perspective (Jaffrey Pfeffer and Gerald Salancik, 1978). Hence companies coexist in a strategic interaction. This theory defines companies’ inability to be sustainable without external dependencies.

• Business ecosystems evolve in different stages. The starting point is described as a mix of capital, customer interest and talent base, which is the starting point for an ecosystem’s formation. This is followed by expansion, leadership and, finally, self-renewal or death (Moore, 1993; Ritala and Tidström, 2014).

• Value is created by the company itself or by its partners for the end customer. Therefore, every actor in the ecosystem creates and also captures value. This can take place upstream or downstream the value chain (Adner and Kapoor, 2010).

Thoughts and theory Ecosystems

Why Ecosystems?• Modern service delivery us often intertwined with other companies. Often these

connections are not only supplier relationships.

Why Value from Ecosystems?• The delivery of value from an ecosystem should go beyond the capability of the

counted single entity in the ecosystem

Which stakeholders do you include, which to exclude?• Stakeholders to include are available for exchange of value (not just supply)• Stakeholders to exclude are those who supply to the partners• “Leaches” need to be identified and potentially excluded

Research Phases / Methods

Phase Data Participants1– BuildingtheoryfromLiterature

Seventypeer-reviewedpapers

Selectioncriteriareviewedbythreeotherseniorresearchers

2– InterviewstestingoftheTheory

Qualitativeopen-endedinterviews,recordedandTranscribed

Managingdirectorsandgeneralmanagers

3– VerificationWorkshops Fourcasestudies inmultinationalorganizations

Managingdirectorsandgeneralmanagers

Value Creation and Capture

Manufacturer

Custom

er

Capture

Capture

Create

Create

Aim of this presentationIntroduce the Customer Value canvas

Thevaluecanvaswillenableto:

Describe,discuss,challenge,understandandconverseaboutthetypesofvaluewhichareexchangedbetweenthefocuscompanyanditscustomer!

Rules and assumptions

Rulesforbuilding theecosystemcanvas1. Mappedbyateam2. Facilitatedbyamoderator3. Parkingissues4. CollectTasksforvalidation5. Multidisciplinaryteamwiththe

strategicvisionshouldparticipateinthecanvasdesign Assumptions (underwhatconditions is

thiscanvasvalid?1. Context(servicecontract)2. Time(expiry/subjecttochangesinthe

ecosystem)3. Thebenefitofthisisdependentonthe

peopleinvolved

Value Mapping Process

Step1:DefinetheEndCustomer

Step2:BuildyourecosystemMap

Step3:Decideonyourfocalcompany

Step4:Describethedirectvalueexchanged

Step5:Describetheindirectvalue

exchanged

Step6:Decisionmakingforpartnering

MapyourEcosystem1. Definetheendcustomer2. Defineallparticipants

• EndCustomer• YourCompany• FocalCompany• Supplier• Partner• Competitor• Influencer

Your Company

Partner

Partner

End Customer

InfluencerInfluencer

Competitor

Supplier

Suppliers’ supplierInfluencer

Mapping your ecosystemConsidering all important participants

MapyourEcosystem1. Definetheendcustomer2. Defineallparticipants

• EndCustomer• YourCompany• FocalCompany• Supplier• Partner• Competitor• Influencer

Your Company

Partner

Partner

End Customer

InfluencerInfluencer

Competitor

Supplier

Suppliers’ supplierInfluencer

Mapping your ecosystemFocus on value exchanged between partners

Direct Value Creation and CaptureConsidering the ecosystem partners

Manufacturer

B2B/Cu

stom

erCapture

Capture

Create

Create

Urmetzer,Neely,Martinez(2016);“EngineeringServices:Unpackingvalueexchange”WhitepaperfromtheCambridgeServiceAlliance

Describe the indirect value exchanged

2a.Company(e.g.Financialorothercapability,Proximity,Trust)

YOUR

Co

mpany

B2BCu

stom

er

2b.Managers(e.g.CoordinationExperience,TechnologicalKnowledge,KPIs)2c.Strategically(e.g.strategicintentoftheorganisationorotherstakeholders)2d.Risk(e.g.aversionofmarketandotherrisks)

2.Whatistheindirectvaluefor:1.Whatisthedirectvaluefor:

Decision making for partnering

CaptureCreate Capture

Create

CaptureCreate

6aDecisionmakingonpartneringbasedonDirectValue

6bDecisionmakingonpartneringbasedonIndirectValue

6c.FinaldecisionmakingonpartneringbasedonTotalValue

Using the Value Canvas for practitioners

Afterusingtheframeworkinaworkshop:“Ifwehadknownthenwhatweknownow,wewouldhavemadeourvalueoffernottothestartoftheproductionchain(vetsandfarmers)buttothe completelyotherendofthechain(retailers)“DirectorOperations,ofamultinationalPharmaceuticalcompany

“themodelprovedtobeanexcellentwayofdiscussingtheissuesweunearthed”

“wewouldnothavehadtheimpactindiscussionsafterusingthemodel”

“usingthemodelhasgivenusanadvantageinbeingacollaboratoraswewereawareofthecompletevalueexchange”

“beforeusingthemodelwehavebeengoingaroundincirclesonvalue”

Summary and conclusion

• Contributedtotheideathatdifferenttypesofvaluecreatedandcapturedwithinanecosystem

• Deepened understandingofthecomplexityofecosystemsanditsdifferentvalueflows,acknowledgingthattherearedependency between companies

• Contributedtoresourcedependency theorybydefiningthattherearedirectandindirectdependencies inservicedeliverybetweencompanies

Forthcoming Webinars

Date14:30hr GMT

Topic Invitedspeaker

2017

March13th TheEcosystemValueFramework:SupportingManagerstoUnderstandValueExchangebetweenCoreBusinessesinServiceEcosystems

FlorianUrmetzer

April10th Investigatingrisksofoutcome-basedservicecontractsfromaprovider’sperspective

JingchenHou

May8th AProcessforB2BPartnerships:designingtodelivercapabilityacrosscompanies

Florian Urmetzer

June12th Exploringthe ServiceJourney VeronicaMartinez

Dr. Florian UrmetzerSenior Research Associate | Cambridge Service Alliance | Institute for Manufacturing |Department of Engineering | 17 Charles Babbage Road | Cambridge | CB3 0FS | UK |

www.cambridgeservicealliance.org

ftu20@cam.ac.uk