service design for business innovation
DESCRIPTION
Talk @ Luxembourg November 2007 (CRPHT)TRANSCRIPT
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SERVICEDESIGN FORBUSINESS INNOVATION
YVES PIGNEURUNIVERSITY OF LAUSANNE
ILLUSTRATIONS.FR
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AGENDA
BUSINESS MODEL INNOVATION
SERVICE THRU BUSINESS MODEL
BUSINESS MODEL DESIGN
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INN
OV
AT
ION
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TYPES OF INNOVATION
PROCESS
PRODUCT
BUSINESS MODEL
DILBERT
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PRODUCT INNOVATION
FLICKR.COM
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PROCESS INNOVATIONFLICKR.COM
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BUSINESS MODEL INNOVATION
FLICKR.COM
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BUSINESS MODEL INNOVATION
CIRQUE DU SOLEIL
artistic circus
without lionstheater &
opera visitorshigher ticket
prices
create art & atmosphere
stage & manage
spectacle & logistics
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“Business model innovation matters” and it is a top priority of CEOs
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OPERATING MARGIN GROWTH IN EXCESS OF COMPETITIVE PEERS (COMPOUND ANNUAL GROWTH RATE OVER FIVE YEARS)
BUSINESS MODEL INNOVATIONSOURCE: IBM, CEOS ARE EXPANDING THE INNOVATION HORIZON: IMPORTANT IMPLICATIONS FOR CIOS
IBM
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BUSINESS MODEL INNOVATION
BENEFITS CITED BY BUSINESS MODEL INNOVATORS (PERCENT OF RESPONDENTS)
SOURCE: IBM, CEOS ARE EXPANDING THE INNOVATION HORIZON: IMPORTANT IMPLICATIONS FOR CIOS
IBM
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SE
RV
ICE
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“cartoons drawn on the back of business cards”
“GAPINGVOID” ON BUSINESS MODEL
www.gapingvoid.com
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concept
business model
a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for
creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams
[Osterwalder, 2004]
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HOW DESCRIBE A BUSINESS MODEL ...FLICKR.COM
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AND COMMUNICATE A BUSINESS MODEL ...
FLICKR.COM
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WITHOUT A COMMON LANGUAGE?WIKIPEDIA
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model
VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
VALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
INFRASTRUCTURE CUSTOMEROFFER
FINANCE
[Osterwalder, 2007|
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case
TICKETCORNER
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concept
value proposition
gives an overall view of a company's bundle of products and servicesit is the sum of the total benefits a customer is promised to receive in
return for a payment (or other value transfer)
[Osterwalder, 2004]
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FACILITATE RESEARCH AND REDUCED TRANSACTION COSTS
SPEED UP DISTRIBUTION
IMPROVE THE QUALITY OF SERVICE
IMPROVE FACILITY AND EXPERIENCE OF BUYING
IMPROVE THE TRANSPARENCY OF INFORMATION BY OPENING UP THE INFORMATION SYSTEM
DEVELOP A SENSE OF COMMUNITY, AND IMPROVE THE DIFFUSION OF KNOWLEDGE,
BIND COMPLEMENTARY PRODUCTS
VALUE PROPOSITION
Osterwalder, 2007
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BALANCING COST & PERFORMANCEOsterwalder, 2007
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CHARTING THE VALUE PROPOSITION[Kim & Mauborgne (2002) Charting Your Company's Future]
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DESCRIBING A COMPANY’S OFFER
Osterwalder, 2007
VALUE
PROPOSITION
value proposition 1
value proposition 2
…
OFFER
Event tickets (& access)
Distribution channel reach
POS affiliation
(Easy Outlet)
(Integrated) B2B solutions
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DESCRIBING WHO A COMPANY OFFERS VALUE TO
Osterwalder, 2007
VALUE
PROPOSITION
TARGET
CUSTOMER
value proposition 1
value proposition 2
…
target customer 1
target customer 2
…
CUSTOMEROFFER
Individual eventvisitorsEvents &
Organizers
POSPartners
Venues
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DESCRIBING HOW A COMPANY REACHES ITS CUSTOMERS
Osterwalder, 2007
VALUE
PROPOSITION
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
value proposition 1
value proposition 2
…
distribution channel 1
distribution channel 2
…
target customer 1
target customer 2
…
CUSTOMEROFFER
Ticketcorner Website
ATMsAffiliate POS
network
TicketcornerPOS network
Call Center
B2Bsalesforce
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model
[Osterwalder, 2007|
VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNELVALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
gives an overall
view of a
company's bundle
of products and
services
portrays the
network of
cooperative
agreements with
other companies
describes the
channels to
communicate and
get in touch with
customers
describes the
arrangement of
activities and
resources
explains the
relationships a
company
establishes with its
customers
sums up the
monetary
consequences to
run a business
model
describes the
revenue streams
through which
money is earned
describes the
customers a
company wants to
offer value to
outlines the
capabilities
required to run a
company's
business model
INFRASTRUCTURE CUSTOMER
OFFER
FINANCE
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BIRD’S EYES VIEW
Osterwalder, 2007
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DE
SIG
N
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We believe that if managers adopted a design attitude, the
world of business would be different and better
[Boland & Collopy, 2004]
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TOOLBOX FOR DESIGN
CO-CREATION
IDEATION
VISUALIZATION
PROTOTYPING
CASE Lewis building
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CO-CREATION
Osterwalder, 2007
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IDEATION
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VISUALIZATION
FLICKR.COM
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PROTOTYPING
CASE Lewis building
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ENVIRONMENT ANALYSIS
INNOVATION EVALUATION
DESIGN LOOP
BUSINESS MODEL DESIGN
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ENVIRONMENT ANALYSIS
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“This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”[West Union internal memo, 1876]
"I think there is a world market for maybe five computers." [Thomas Watson, chairman of IBM, 1943]
“I have travelled the length and breadth of this country and walked with the best people, and I can assure you that data processing is a fad that won't last out the year.”[The editor of management books at Prentice-Hall, 1957]
“There is no reason anyone would want a computer in their home.”[Ken Olsen, President and founder of Digital Equipment Corp., 1977]
"640K ought to be enough for anybody.” [Bill Gates, founder of Microsoft, 1981]
NO PREDICTION BUT ...
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IST MOBILIVEKTH WIRELESS FORESIGHT
... BUT SCENARIOS
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BUSINESS MODEL DESIGNOsterwalder, 2007
VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
VALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
INFRASTRUCTURE CUSTOMEROFFER
FINANCE
artistic circus
without lionstheater &
opera visitors
higher ticket prices
create art & atmosphere
stage & manage
spectacle & logistics
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INNOVATION EVALUATION
THOUGHTOFFICE
HBR
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INFORMATION SYSTEMS INFRASTRUCTURE
co
mm
un
ica
tio
ns
info
rma
tio
n
ma
na
ge
me
nt
se
cu
rity
arc
hite
ctu
re &
sta
nd
ard
s
rese
arc
h &
de
ve
lop
me
nt
IT e
du
ca
tio
n
APPLICATION INFRASTRUCTURE
VALUE
PROPOSITION
COST
STRUCTURE
CUSTOMER
RELATIONSHIP
TARGET
CUSTOMER
DISTRIBUTION
CHANNEL
VALUE
CONFIGURATION
CORE
CAPABILITIES
PARTNER
NETWORK
REVENUE
STREAMS
INFRASTRUCTURE CUSTOMEROFFER
FINANCE
Osterwalder, 2007
ENTERPRISE ARCHITECTURE
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BUSINESS MODEL
DESIGNING ...
SERVICES ...
FOR INNOVATION