Business Model Management: Current Practices,
Required Activities and IT Support
Nicola Terrenghi1,2, Johannes Schwarz1,2, Christine Legner1, Uli Eisert2
1
University of Lausanne, Faculty of Business and Economics (HEC), Lausanne, Switzerland
{nicola.terrenghi,johannes.schwarz,christine.legner}@unil.ch
2
SAP AG, Innovation Center Network, St.Gallen, Switzerland
{nicola.terrenghi,johannes.schwarz,uli.eisert}@sap.com
Abstract. This paper explores the concept of business model management,
defined as a generic process covering all phases of the business model lifecycle. In contrast to previous business model literature, which is mainly focused
on the design of business models, we argue that the successful exploitation of
the business model concept requires a dedicated management approach. Due to
the lack of extant research in the domain, we build on multiple, exploratory case
studies of large organizations, based on 20 expert interviews. This paper
contributes to a better understanding of the current practices and needs in
business model management and the multifaceted role of the business model
concept in each of its phases. Moreover, we suggest roles of IT in the business
model management process.
Keywords: Business model management, business model design, business
model implementation, case study
1
Introduction
A business model (BM) is an abstract representation of business logic [1]. Serving as
a reference framework, it supports practitioners in conceiving, designing and
communicating business ideas [2–4]. The academic literature provides analyses of
how organizations design and innovate their BMs [5–7]. However, although the BM
can be understood as a structured management tool [8], there is still no clear
understanding of its roles beyond design and innovation, also seen as the transition
from BM plan to its execution [9].
“A ‘strong’ business model can be managed badly and fail, just as much as a
‘weak’ business model may succeed because of strong management and
implementation skills” [9]. For instance, Ryanair’s BM “creates several virtuous
cycles that maximize its profits through increasingly low costs and prices” [10]. Its
competitive advantage keeps growing as long as managers make these virtuous cycles
spin. Being designed in a dynamic environment, as a reaction for instance to market
changes, increasing competition, or technological innovation, BMs thus require active
management [11]. Although recent research indicates that the BM life-cycle should
embrace more phases than just design [12], these phases and a holistic management
13th International Conference on Wirtschaftsinformatik,
February 12-15, 2017, St. Gallen, Switzerland
Terrenghi, N.; Schwarz, J.; Legner, C.; Eisert, U. (2017): Business Model Management: Current Practices,
Required Activities and IT Support, in Leimeister, J.M.; Brenner, W. (Hrsg.): Proceedings der
13. Internationalen Tagung Wirtschaftsinformatik (WI 2017), St. Gallen, S. 972-986
972
approach have seen very little attention in academia and practice [13] – wrongly, in
our view, because the BM concept can be leveraged by decision makers for
implementation and management of a successful business, [9] and shifts “from a
conceptual and theoretical focus to tooling and practical usability” [14]. We address
this gap by answering the following research questions: (RQ1) What is the current
state of practice in business model management? (RQ2) What are the roles of the
business model concept in each phase of this process? If BMs are found to be relevant
from a management perspective [15], decision makers also need IT-based BM tools to
support their management. To address this aspect, we ask a third question: (RQ3)
What are IT’s roles in supporting the business model management process? Building
on a qualitative research design and insights from 20 case studies, our findings
confirm that companies mostly use the BM concept for analysis and design, but have
not fully embraced it as management instrument in the implementation and control
phases. Our study provides a baseline for future research by providing conceptual
foundations and developing avenues for practice and future research.
The remainder of this paper is structured as follows: We start by reviewing the
literature to derive an analysis framework for BM management (Section 2). We then
present our qualitative research design (Section 3). Our empirical insights shed light
on the current practices and required activities in 20 cases (Section 4). We conclude
by developing avenues for practice and future research (Section 5).
2
Theoretical Background
In this chapter, we review the BM literature and elaborate on the emerging theme of
BM management. Building on our literature review, we suggest an analysis
framework that will guide our empirical study.
2.1
Business Model Concept
Although every company adopts a BM, either explicitly or implicitly, it remains an
open question what exactly is understood by BM, that is, how it should be
conceptualized [16]. At a fundamental level, scholars and practitioners agree that the
BM is crucial for the success of today’s organizations, especially concerning growth
potential [17], competitive advantage [18, 19], long-term performance [20], and as a
new source of innovation [21]. The academic community has recognized BM’s
potential, leading to a rapidly growing number of publications across management,
IT, strategy, and other disciplines [8, 22].
In practice, the growing interest in the concept was catalyzed by the popularity of
representations of the BM such as the so called Business Model Canvas [3], e3-value
ontology [2], or St.Gallen Business Model Navigator [23], which have become
reference tools for business innovation in both entrepreneurial and large organizations
[14]. The main benefits of these BM conceptualizations are the systemic and abstract
representations of the core business logic [9, 1, 24], which can serve as a useful
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device to analyze and communicate a company’s value creation, delivery, and capture
mechanisms [16].
2.2
Business Model Management
Recently, scholars have begun to investigate the phases of BM management beyond
design, such as analysis [25], implementation [26], and management [27]. However,
the literature provides very limited and inconsistent conceptual or empirical evidence
on the practices and characteristics of BM management as a holistic process [17, 28].
For instance, [35] identifies design, implementation, operation, change, and
controlling phases within the so-called business model life-cycle. [30] document an
experimentation and exploration phase, followed by an implementation stage, and
[23] distinguish between the phases of mobilizing, understanding, designing,
implementing, and managing BMs.
Generally, the BM concept can be considered either as a static blueprint or as
transformational, “using the concept as a tool to address change and innovation in the
organization, or the model itself” [29]. The latter view reflects a management context,
because it considers the BM as a tool to support the analysis, planning, and
transformation of organizations [30]. It also comprises the transformation of the BM
itself. Specifically, a business model “is typically a complex set of interdependent
routines that is discovered, adjusted, and fine-tuned by ‘doing’ ” [29]. Given how
crucial it is to sustain the BM in volatile ecosystems, all tasks should be managed
deliberately and its “conception, introduction into the marketplace, and ongoing
management should not be left to chance” [31].
2.3
IT Support
Software and tools that support BM management have already been developed but are
still in the earliest state of immaturity and are largely restricted to the design phase, by
supporting the visualization of a BM [15]. However, recent research highlights that
such “computer-aided business modelling tools should go beyond simple design tools
and evolve into an own class of high-level decision support tools” [27]. This implies
that software tools not only support design, but also the overall process.
2.4
Towards a Framework of Analysis for Business Model Management
Building on the literature, we develop an analysis framework to guide our empirical
research on BM management (Figure 1). We suggest defining BM management as an
generic management process, building on the business model as the central unit of
analysis. The overarching element of our framework is the BM conceptualization
employed in practice. Through this element, we account for a better understanding of
the relevant aspects of the BM concept in the different BM life-cycle phases. We refer
to specific BM conceptualization and operationalization as well as the general
mindset and perception of practitioners toward the BM concept. For BM
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management, we rely on four generic phases of strategic management: analysis,
design, implementation, and control [32].
Analysis. Given that the development of new BMs or the improvement of existing
ones is a complex challenge for managers [33], understanding when changes in the
BM are needed is essential [34]. During this phase, relevant aspects such as
technological innovations in the external and internal environment are identified to
assess the urgency of and opportunities to alter the BM [34].
Design. “Designing a new business model requires creativity, insight, and a good
deal of customer, competitor and supplier information and intelligence” [17]. Design
could include activities such as brainstorming, prototyping, testing, and selection [3]
and could be theoretically guided by dedicated frameworks [24].
Implementation. Design and implementation phases are distinct but strongly
related: a ‘good’ BM design can lack the expected value owing to its ineffective
implementation [9]. Thus, in this phase, project management could become relevant
[12] in order to operationalize the BM [26].
Control. Although the BM may have been rigorously designed and implemented,
its de facto performance and effectiveness are subject to emerging events and needs
being continuously controlled, for instance, in relation to financial, process, or growth
performance [35] and associated risks [16].
These phases can be mapped to the ones mentioned in [3, 9, 12] and reflect the
more generic phases of strategic management. However, these four phases cannot be
considered as exact, given the early stage of BM management. They should be
considered as ‘idealized’ rather than ‘ideal’. In line with the literature, phases could
be carried out in parallel, iteratively, or ad-hoc [3, 9, 12].
The underlying element is IT support (similarly to [15]), because each BM
management phase can be expected to be supported by one or more software tools
[15].
Figure 1. Framework of Analysis for Business Model Management
3
Methodology
To better understand the current situation and roles of BM management in practice,
we applied a qualitative and exploratory research design by conducting multiple case
studies [36]. A case study method is commonly defined as “empirical inquiries that
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investigate a contemporary phenomenon within its real-life context”; it is particularly
useful to understanding the emerging topic of BM management [36]. We performed
multiple case studies because this approach reinforces the generalizability of results
[37]. We conducted a series of 20 cross-industry cases of large organizations. For
each case, we collected data through semi-structured interviews with experts in
different managerial roles.
3.1
Case and Expert Selection
To gain insights into BM management in organizations, we had to identify suitable
case sites, as well as experts as key informants. Our goal was to cover a broad variety
of organizations from different industries and with different levels of expertise in BM
management in our case sample.
Table 1. Characteristics of Interviewees and Their Organizations
Roles
Divisions
Industries (code)
Countries
Revenues (avg.)
Size (avg.)
Managers (18), Director (1), CEO (1)
Innovation (12), corporate strategy (6), business
development (2)
Automotive (AUT) (2), financial services (FIN) (2), energy
(ENE) (3), chemicals (CHE) (3), conglomerate (CON) (3),
information technology (INF) (2), logistics (LOG) (1), hightechnology (HIG) (3), research (RES) (1)
Germany (11), Switzerland (3), France (2), U.S. (2), Italy
(1), Norway (1)
$40B
98K employees
Before approaching a wider number of companies, we conducted four knowledgesharing sessions with affiliated practitioners who have experience in BMs in their
organizations and were willing to share their insights. Based on the results of the
knowledge-sharing sessions, we learnt that the topic is particularly relevant for large
organizations (> 250 employees) across industries: compared to small- mediumenterprises, they tend to assign more resources to BM-related initiatives (e.g,.
dedicated teams or organizational units). Further, decision makers in large
organizations are usually aware of the BM concept, but struggle to manage it. The
knowledge-sharing sessions have been also crucial to spot roles of ‘BM experts’ in an
organization: we identified experts in several areas such as new business
development, innovation management, general management, and strategic
management. Finally, we approached potential candidates at conferences, events and
through personal contacts of the authors and seven colleagues. We invited decision
makers in large organizations who have BM knowledge and have adopted or intend to
adopt it in the management of one or more phases. Of the 34 experts we invited, 24
agreed to be interviewed; all had managerial or executive roles in large organizations.
Four could not provide any relevant insight on BM management phases and were
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excluded, resulting in 20 eligible cases. Table 1 summarizes the characteristics of the
organizations and interviewees. To guarantee anonymity, we refer to each expert with
a code (e.g., AUT1 = the industry of the organization s/he belongs to: Automotive 1).
3.2
Data Collection and Analysis
Between January and May 2016, we conducted 20 semi-structured interviews by the
authors or one of their seven colleagues. The interviews were done face-to-face (18 of
20) or via telephone (2 of 20) and lasted between one and four hours. In some cases, a
first brief telephone interview was followed by a meet-up. Usually, between one and
three interviewees participated, often from very different organizational units,
reinforcing the topic’s relevance across divisions. At least two interviewers
participated; one leading the conversation and the other(s) taking notes. Owing to
confidentiality, we did not audio-record any session; statements in quotation marks
can therefore not be considered as direct citations. During the interview process, we
presented our current understanding of BM management to interviewees, followed by
questions about their previous experience with and use of BMs, the topic’s general
relevance, IT’s potential roles, and general feedback, followed by an open discussion.
For data analysis, the interview notes (between pp. 2 to 5 per interview) were
consolidated and analyzed by two authors, individually, along the process of constant
comparison and iterative conceptualization [38]. Some interviews were done in
German or Italian and had to be translated into English. In the analysis process, we
categorized the codes into the elements of the theoretical framework before
identifying emerging themes in each group. In case of disagreement, a third author
was involved in the discussion until we had clarification. Finally, each author
reviewed the coding, and we achieved agreement in a round table session.
4
Results
4.1
The Business Model Concept
Regarding the BM concept, we highlight two important findings: its
operationalization and its relevance across BM management phases. While some
academics argue about the ‘best’ BM conceptualizations, our results suggest that
certain organizations are able to leverage the BM concept without specific templates
(AUT1, FIN1, FIN2, CHE3), while others operationalize the concept through existing
BM frameworks, such as Osterwalder’s Business Model Canvas (CON2, INF2,
CHE2). However, there appears to be consensus that, sooner or later, organizations
adapt these frameworks to their specific needs and/or integrate them with other
templates (e.g., SWOT). As CHE1 notes, “we need flexible canvases and tools,
because each company develops and uses their own.” CON3 confirms that “every
company has its own specifications, which must be represented.”
Regardless of its specific conceptualization, the relevance of the BM concept
differs significantly across the BM management phases. Organizations strongly apply
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a BM perspective during the design phase and highlight its importance, such as
“visual representations” (CHE2), “spot and rank the most critical elements of a BM
through the eyes of the customers” (AUT2) or “represent alternative BM designs”
(CON3). However, they report additional issues during implementation. Some
companies report that “other divisions do not speak this language” (AUT2), “some
colleagues don’t want to think creatively” (CHE1), and “management looks at ROI”
(INF2). Since more stakeholders are increasingly affected in advancement throughout
the phases (RES1, CHE3), conflicts with the core business must be avoided (AUT1).
4.2
Business Model Management
Table 2. Results Per and Across BM Management Phases (insight recurrence)
Current
practices
Required
activities
IT
support
Analysis
Environment
analysis (7)
Design
Iterative
testing (6)
Partnerships (3)
Customer
centricity (4)
Stimulation of
scenarios (6)
Enhanced
visualization
(4)
Prevention of
disruption (5)
Portfolio
analysis (3)
Implementation
Accountability
management (3)
Control
Financial
performance
(2)
Stakeholder
management (4)
BM portfolio
management (2)
Holistic
dashboard (6)
Prompt
notification
(4)
Idea
management (2)
Key value to current practices and required activities (6)
Creativity and communications are enabler, not inhibitors (4)
Integrated with other tools (3)
Analysis. Current practices. The analysis phase is mostly described as the process of
collecting relevant information from the external environment, which refers not only
to customers (CON1) but also competitors (AUT1, LOG1), other industries (ENE2),
new market entrants that “might intervene and disrupt the market” (CHE1), and
digital trends (CHE1, INF1, ENE2). Some organizations proactively analyze their
environment, adopting an “intensive collaboration with startups” (ENE1) to “help
them grow and to change [their] business model based on their insights” (CHE1).
Similarly, CHE2 mentions that her organization constantly runs internal workshops
and “intrapreneurship” programs to help employees generate and collect business
ideas.
Required activities. The lens on the external environment is primarily based on the
question “how could my business model be disrupted?” (CHE3). This dilemma
concerns the experts’ hope, and fear, that “digital transformation might change things
or open new opportunities” (ENE2). Thus, interviewees highlight the need for a
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prompt signal that can spot a disruption threat, or opportunity, in advance, because “it
is […] important to find the right timing for business model innovation.”
Among the organizations that trigger BM design based on the analysis of internal
capabilities (HIG2, CHE2, CON3), the primary activities concern the “understanding
of portfolio of [existing] business models” (CON3). The same expert highlights that
“Not every product must be a financial performer, because it could complement
services. It is important to map these dependencies. We would always start on the
portfolio layer.” The collected information is often unstructured and lacks a filtering
process that leads to the design phase. For this reason, CHE2 suggests that an “idea
management tool” is needed. Thus, the crucial activities needed in the analysis phase
concern the identification of possible changes in the industry, systematic management
of insights for BM design or adaptation, and the acknowledgment of internal
constraints relating to existing BMs.
Design. Current practices. BM design should use the customer as starting point for
value creation. Experts tend to validate their assumptions through market analysis and
product test (e.g., prototypes). For instance, CHE3 states that they “test different
elements of the [business model] canvas with customers (e.g., willingness to pay).” In
this sense, the customer is perceived as a co-innovator. AUT1 highlights the relevance
and urgency of customer centricity owing to digital transformation, suggesting that
design “needs to anticipate the digital expectations of customers three years ahead.”
However, although most organizations highlight customer centricity, an expert in the
oil and gas industry (ENE3) states that in their commoditized market, this is not
relevant, since “we just need to find resources and sell them.”
A second recurrent – and expected – insight is that the BM design is typically
iterative. Experts highlight the essential, repetitive validation of their assumptions,
which can take place through the adoption of specific tests (CHE1, CON3) and
through prototyping (CHE3, HIG1, CHE3). Tests are considered particularly valuable
for generating multiple BM designs, also known as versioning (CHE2). Prototyping is
a practice that, according to CHE3, helps to “avoid long-term investments upfront.”
However, two experts mention feasibility regarding testing and prototyping: ENE3
and RES1 highlight that constraints such as time, legislation, and infrastructure often
prevent testing and prototyping.
Required activities. Although testing and prototyping are currently common
practices for several organizations, such as minimum viable propositions and surveys,
interviewees mentioned the need for further support in the validation of BM design.
In particular, “business model simulation” is a recurrent term (e.g., AUT2, INF1).
CHE1 describes it as the assessment of “internal and external requirements, so that
the business model can work in particular situation[s] or market[s].” Similarly, INF1
focuses on the relevance of simulations to predict “the best customer channel, sales
and distribution.” Such activity is also highlighted as an IT solution to support
managers in creating multiple scenarios or versions of a BM (CHE2) and to identify
the critical elements of a BM (AUT2).
To support BM simulation and validation, experts suggest that a detailed
visualization of a BM and its elements is needed: CHE2 states the “need to get more
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details in the business model canvas to actually use it and communicate ideas.”
AUT2 also supports the urgency for a “granular” representation that “avoids pingpong in the communication between departments,” while FIN2 focuses on a BM
visualization that enables better customer segmentation and description.
Implementation. Current practices. The implementation phase holds unique
characteristics, particularly compared to the design phase. Generally, it appears to be
“a challenge at a large company” (HIG1), perhaps even “the biggest hurdle” (HIG2).
Specifically, the first important characteristic noted by several interviewees is the
increasingly significant role of stakeholders. Employees who are directly responsible
for BM implementation and execution are a primary stakeholder group. CON3
describes this group as the “entrepreneurial team” and asks “what are the ideal
characteristics of the members of this team?”
Required activities. Concerning stakeholders, ENE3 addresses the “need to have a
business model owner, who pushes the execution with the implementation team.” As
several other respondents highlighted the need for general stakeholder management,
we see a second stakeholders group beyond the BM owner. These stakeholders could
be the implementation team (ENE3), sponsors (CHE3, HIG1), or coaches (CON3).
Stakeholder management’s role is also emphasized by the need for “approval
management” (HIG1, CH1, FIN1) or “stage-gate processes” (RES1). ENE3 suggests
employing a “power couple” – two managers accountable for BM design and
implementation respectively, and who strongly depend on each other.
While the previous phase indicated a focus on finding the right BM and assessing
customer needs, implementation is concerned with finding the right organizational
set-up. Several companies mentioned potential conflicts between the traditional core
business and new BMs. For instance, AUT1 noted that “the central question is how
the traditional core business can be combined with new, digital businesses,” facing
major challenges such as self-cannibalization, which must be avoided, because “there
is no willingness to give up existing business for new ones” (CON1).
Control. Current practices. Only two interviewees addressed the regular control of
one or more implemented and ‘running’ BMs (INF1, FIN2). They highlight
continuous monitoring of financial performance, referring to specific BM elements,
such as revenues and costs. Both INF1 and FIN2 suggest that there is currently no
control tool besides financial reports and, when necessary, ad hoc analysis of specific
reports’ insights.
Required activities. CON3 argues that “business models are never stable.” To
control a BM, experts suggest that data and IT systems are necessary. Here, INF2
comments that “[they] need to make a dashboard” to visualize and leverage
quantitative data for BM improvement. Similarly, CHE2 states the “need to look at
environment data” to monitor and prevent threats and seize opportunities, while
CON1 asks “if the customer has an input, how [can we] leverage this input in the
business model in the best way?” INF1, also owing to his industry, suggests that such
a dashboard should provide “real-time monitoring” of the BM.
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The regular controlling of a BM and its visualization as a dashboard form the basis
for working as “early warning”. CON3 explains that “alerts must notify business
model owners if crucial parameters deflect. Thus, these parameters must be captured
(for instance, financial indicators, regulations, or other requirements).” FIN2 argues
that his organization needs to enhance reporting practices in order to enable more
complex queries. RES1 and CHE3 discuss how alerts should also help managers to
distinguish between the need for incremental change and the need for disruptive
change.
4.3
IT Support for Business Model Management
While most respondents reported the need for general software support of BM
management, only CON3 is already systematically working with a mix of “predefined
Excel files for evaluation and risk management, as well as PowerPoint, and one tool
to describe processes.” With two exceptions (ENE2, HIG1), most companies argue –
similarly to CHE1 – that “software support would be a key additional value” (CON1,
CHE1, CHE2, RES1, CON2, FIN1). For instance, CON1 states that “no tools are
used, which is a big problem,” while CON2 notes that “we need situation-specific and
iterative tools.” However, a major requirement of those tools is that they could be
helpful by providing a pre-structured process that “moderates the process, colleagues,
and process sequence” (FIN1) yet maintains the agility and flexibility, particularly
during the design phase. “We need […] iterative tools to avoid fixed step-by-step
processes with unnecessary steps” (CON2).
While some firms are concerned about creativity and agility during design, the
results show that the implementation phase could strongly benefit from software
support. The primary reasons are that implementation requires support for “identifying
experts in the network” (CHE1) and “identifying organizational units that could
provide knowledge or support the business model to implement it faster” (CON3).
From the interviews, we also learnt that BM representation should “provide deep
dives into certain elements” (CON3), an “ecosystem view” (RES1), and be “integrated
with other conceptual tools, such as strategy-maps or balanced scorecard” (FIN1).
We can also report two significant relationships with existing software systems
(CON1): “a BM perspective could be integrated into existing tools, such as CRM”
and “how can business models be derived from the ERP?”
5
Discussion
Our study contributes to the BM literature by suggesting a comprehensive
conceptualization of BM management. Based on empirical insights from 20 cases, we
assessed current practices and required activities in BM management. Our results
reveal that organizations still concentrate on BM analysis and design, but also confirm
the need for a structured management process. The above mentioned empirical
findings outline future avenues for research and practice, laying the groundwork for
further studies.
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5.1
Business Model Management
In response to research question 1, our results suggest that current BM practices in
large organizations mainly relate to analysis and design, and that BM management, as
a holistic management approach, is highly relevant to companies across different
industries. In this sense, it empirically confirms previous theoretical arguments [3,
13], which hold that the BM concept is widely accepted for designing and innovating
new BMs but that there is a significant need to focus on the BM management as a
whole, including implementation and control (Table 3).
Our study is also one of the first to explore the details of such a holistic process in
terms of current practices, required activities, and IT’s roles. The results show that
organizations have an expressed need for a general process to manage the entire lifecycle of BMs and provide a first rich picture of the current situation in practice.
Further, the maturity level, which could be considered as experience with BMs and
the level of adoption of the concept in different phases, varies widely. Very few
organizations have already adopted a fairly structured BM management process
(CON3, CHE1), while most either begin with small BM-related projects or have
integrated the BM perspective into their existing innovation processes (e.g., product
innovation).
5.2
The Roles of the Business Model Concept
Regarding research question 2, we found that the BM concept is in fact important
during all phases. Interestingly, its role and application appears to change along the
phases, pointing at a multi-faceted conceptualization (Table 3). Our results show for
instance that the working mode changes along these phases. During analysis and
design, frequent iterations, agility, simulations, and customer centricity are key.
During implementation and control, a fairly sequential procedure with “approval
management” (CHE1) and “milestones” (CON3) was indicated. In addition, the main
sources of knowledge also differ among the phases: during the analysis, the
environment is crucial; in the design phase, the focus is on products and customers;
the implementation phase depends strongly on the contribution of internal experts and
on the integration with other internal BMs; the control phase requires data acquired
from enterprise systems and other data sources. Irrespective of the phases, some
authors even go beyond the management of a single or multiple BMs; they state that
the BM concept is a crucial perspective to manage the entire corporation, irrespective
of the company’s size. Such “evolution” of the BM concept has been recently coined
by [39] as business model-based management.
A primary obstacle to the further adoption of the concept, particularly during
implementation and control phases, could be the “lack of business model mindset”
(INF1, AUT1, CHE2, ENE1, ENE3, FIN2). Here, many divisions such as corporate
strategy become involved. According to the experts’ insights, these stakeholders may
have a short-term perspective (FIN2), looking solely at financial performance and
ROI (CHE3, INF2) and may feel threatened by changes to the traditional BM
(AUT2).
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Table 3. Overview of the Characteristics of Business Model Concept and Management
Analysis
Design
Implementation
Control
Maturity level
(current practices)
High (10)
High (10)
Low (3)
Low (2)
Working mode
Explorative,
open
Agile,
iterative
Key knowledge
source
Environment
Offer,
customers
Gateways,
sequential
Internal
experts, other
internal BMs
Structured,
regular
Internal
data
source
Obstacles to the
adoption of BM
management
Lack of BM mindset; focus on short-term results; fear of
cannibalizing the traditional BM
5.3
IT’s Roles
Consistent support of the entire BM life-cycle raises the need for adequate IT
solutions, not only as digital visualization of BMs, where pen-and-paper seems to be
sufficient for most practitioners. We respond therefore to the quest for research on “IT
support for developing and managing business models” [15] by providing first
insights into requirements of the prospective research stream on software systems that
“clearly go beyond simple design tools […] and evolve into an own class of highlevel decision support tools” [15]. IT must support a structured management process,
but should not constrain agility in and the iterative nature of the early phases of BM
development. Handling this paradox could be a fundamental aspect of IT support to
drive the adoption of systems and to ensure their sustained use throughout the lifecycle. In other words, paying attention to the above mentioned characteristics of the
different phases may contradict the over-simplistic assumptions of BM software tools,
which mainly focus on visualization. Further, a selection of specific features was
highlighted, namely simulation, collaboration, knowledge management, reporting,
and the fact that IT support should include additional strategy tools such as strategymaps that are easy to adapt.
We also contribute to the broader IS literature by building on [27]’s argument
about IS’s key roles in “informing strategic disciplines and in contributing to increase
understanding of the essence of BMs and other strategic notions.” While [27] suggest
three primary contributions of IS to strategic management (modeling at a strategic
level, strategizing as designing, considering computer-aided design), we added an
additional role of IS. Given the high relevance of implementation for any BM’s
success, a fruitful future research area could be to investigate to what extent the
existing IT-landscape is a barrier to successful BM management. For instance, CON1
notes that not all BM ideas can be implemented, owing to the rigidity of the ITlandscape, and that it should be examined how existing IT systems (e.g., ERP, CRM)
can support BM management, providing data or integrating a BM perspective.
983
6
Conclusions
This study investigates the current practices and required activities associated with
BM management. Drawing on empirical insights from 20 case studies, we found
evidence that managers in large organizations acknowledge the BM concept’s
relevance, not only for the purpose of design, as already established in the literature,
but also for analysis, implementation, and control. We have shown the increasing
relevance of the BM concept throughout all phases and, although companies report
different maturity and adoption levels, it affects different activities and multiple
stakeholders.
Our study provides a baseline of BM management from a practitioner perspective,
and we trust that it will inspire other researchers to contribute to this emerging
research stream. Specifically, we identified three primary limitations that could
trigger future studies. First, we approached practitioners interested in the topic, rather
than those who would deliberately not manage BMs (e.g., managers in controlling,
who have all the tools they need in place). Interviewing such a group could provide
useful insights into the barriers to BM management adoption and could therefore
sharpen BM management’s value proposition.
Second, BM management is still in its infancy. Organizations use the concept
mainly for design and creativity purposes (e.g., during workshops) or to complement
other innovation processes and therefore have little experience with BM
implementation and control. It follows that our findings on these two phases need for
further validation. In particular, corporate spinoffs or recently introduced BMs might
be interesting subjects for case studies.
Finally, in this study, we sought to obtain a broad overview of the state-of-the-art
in BM management. Thus, we approached a fairly large number of organizations.
Future research could build on our findings to conduct in-depth research into selected
organizations that adopt BM management in each phase.
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