the digital economy's next top e-business model
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Business Models in the Digital Economy May 2012
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e-Business and Business Models
Ian Miles [email protected]
Business Models in the Digital Economy May 2012
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THE DIGITAL ECONOMY’
Ian Miles [email protected]
Business Models in the Digital Economy May 2012
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The Digital Economy Business Model Thinking Models and Heuristics The Challenge of e-Business The Digital Economy Revisited
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e-Business
1960s… 1980s… 1990s… 2000s 20xx
Digital Economies Manchester Informatics
Mainframes PCs Internet Mobile Ubiquity
Back-Office and Industrial Process
Control Front Office and
New Services Web 2.0, P2P,
ubiquitous services
High Expertise Professional Users, Workplace
Consumer and Prosumer, Everyday
Inspired by Marc Weiser et al; see I Miles (2005) “Be Here Now” INFO Vol. 7 No. 2, pp49-71
IT industries, High-tech, large
organisations
Digital Forebears
Digital Immigrants
Digital Natives
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0
100
200
300
400
500
600
700
The Business Model Boom
1980 1985 1990 1995 2000 2005 2010
Uses of “Business Model” in title of documents captured in “Publish or Perish” (accessed 14 May, 2012) – “e-business” in contrast explodes off the map by 2000, having kicked off in 1996.
Harzing, A.W. (2007) Publish or Perish, available from http://www.harzing.com/pop.htm
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The Dot Com Bubble brought business model thinking to the fore
Higher School of Economics, June 2011
Dark Line: Index of leading technology shares
Grey Line: Index of Large cap companies
Mentions of business models take off in 1995 to 2000, accelerating in later years, (like share prices) then steady growth (while shares collapse).
Rapid growth of hopes and hypes about internet businesses; Major levels of investment – which was highly speculative, based on hopes of technology-based future returns from new business models
Talk about New Business Models – prompted upsurge of debate about Business Models
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One estimate that as many as 50% of the dot com firms started up in the bubble were still active in 2004 (most of the other half were thus “dot bombs”). Many major success stories were established then:
Subsequent great financial excitement about newcomers: e-Business has steadily recovered from the bubble There will probably be many other bubbles – though note Facebook IPO debacle. There are also concerns as to security and resilience.
Though the bubble burst…
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Business Model A cognitive representation, a set of hypotheses about parameters and relationships. But then, whose representation? Nature of model may vary:
For businesses (and other organisations) – communication and sensemaking device, aligning views – and production process can be vital. Codification in written form less important than mutual learning and guidance – not a Business Plan to persuade investors. But, like a Plan, will typically be modified by cruel reality. For observers (and academics) – a tool for comparison, combining benchmarking and strategy? for studying change? Other? (Law, IP, etc.)
Commentators vary in the number and definitions of key elements proposed. See essays in Long-Range Planning June 2010 and Wirtz 2011.
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http://digitalenterprise.org/models/models.html
“Business Model Generation” http://www.businessmodelgeneration.com/ Alexander Osterwalder
WHAT? WHO?
HOW?
WHY?
WHICH? WHERE?
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Back Office /Stage Front Office / Stage
Business Model Thinking 1
Business
Customers
Goods and services Revenue
Capabilities and Resources
Activities Costs Profits
Channels
Users
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Back Office /Stage Front Office / Stage
Business Model Thinking 2
Business
Customers
Goods and services Revenue Customer Relationships:
Communications (Marketing)
Research and Intelligence
How (far) are these elements organised and managed?
How are these delivered?
How are these designed and
produced?
Capabilities and Resources
Activities Costs Profits
Business Partners Value Chains
Channels
Relationships among Users/ Customers
Wha
t are
(pot
entia
l) co
mpe
titor
s do
ing
and
plan
ning
?
Users
Business Models in the Digital Economy May 2012
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Back Office /Stage Front Office / Stage
Business Model Elements
Business
Customers
Goods and services Revenue Customer Relationships:
Communications (Marketing)
Research and Intelligence
How (far) are these elements organised and managed?
How are these delivered?
How are these designed and
produced?
Capabilities and Resources
Activities Costs Profits
Business Partners Value Chains
Channels
Relationships among Users/ Customers
Wha
t are
(pot
entia
l) co
mpe
titor
s do
ing
and
plan
ning
?
Users
ECONOMIC FORMULA
VALUE PROPOSITION
RESOURCES AND
CAPABILITIES
REVENUE MODEL
COST STRUCTURE
VALUE NETWORK
VALUE CHAIN STRUCTURE
NETWORK POSITION
MARKET REACH
TARGET MARKETS
CHANNELS, FULFILMENT
Digital Communities
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Back Office /Stage Front Office / Stage
e-Business Model Elements
Business
Customers
Goods and services Revenue Customer Relationships:
Communications (Marketing)
Research and Intelligence
How (far) are these elements organised and managed?
How are these delivered?
How are these designed and
produced?
Capabilities and Resources
Activities Costs Profits
Business Partners Value Chains
Channels
Relationships among Users/ Customers
Wha
t are
(pot
entia
l) co
mpe
titor
s do
ing
and
plan
ning
?
Users
ECONOMIC FORMULA
VALUE PROPOSITION
RESOURCES AND
CAPABILITIES
REVENUE MODEL
COST STRUCTURE
VALUE NETWORK
VALUE CHAIN STRUCTURE
NETWORK POSITION
MARKET REACH
TARGET MARKETS
Data capture about users, usage patterns, contexts: new
relationships and services (and data for 3rd parties...)
Virtual organisations and new intermediaries
e- and m-payments and new intermediaries
Informatised processes, in design, production,
etc. Adapted to accommodate e-
business opportunities
CHANNELS, FULFILMENT
Digital Communities e-Links to (and among)
Consumers and End-Users
New e-services; new e-services associated with acquisition,
delivery and use of “traditional” goods and services
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Timmers on “internet business” Manchester Informatics
Superior to many accounts that just focus on revenue models – but horizontal axis is limiting (except for innovation researchers?)
Paul Timmers, 1998, Business Models for Electronic Markets p7 redrawn by Wirtz, 2011, p35
Trends?
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e-Business Models and Business Models
Digital natives and immigrants… (how) are business models developed, adapted, managed? The models may be different, but are the elements or building blocks are essentially the same? Much recent discussion of Business Models (and disruptive innovators – following Christensen) focuses on cases of relatively conventional businesses, perhaps with some e-features. Does this reflect the fear that many e-business models were froth on the bubble, not really sustainable approaches once finance was tight? Are there important new elements, more than nuance? Is it sufficient to analyse individual models, or do we need a more systemic approach?
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THE GLOBAL DIGITAL ECONOMY’
End of Presentation Ian Miles