Platt Perspective on Business and Technology

Moving past early stage and the challenge of scalability 6: business model analytical tools – 3

Posted in book recommendations, startups by Timothy Platt on August 30, 2012

This is my sixth installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and following for Parts 1-5.) I have been discussing business scalability per se and analytical tools that would be used to help to strategically balance a business so as to facilitate growth and scalability. In Part 4 of this series I briefly discussed Osterwalder’s business model canvas and in Part 5 I outlined a number of features and functionalities that would go into a business strategist’s wish list for what they would want in a tool set when planning and executing for business scalability. My goal in this posting is to at least briefly discuss each of a set of alternatives to the business model canvas, as used by businesses and business consultants.

For three standard alternative approaches to the basic business model canvas paradigm, I would cite:

• The business reference model is a reference model approach that focuses on the functional and organizational systems of the core business of an organization. One source of value here in determining scalability and in managing change so as to promote it, is the absolute focus on a business’ fundamentals, and on what has to be scalable for the business to grow and with ongoing and improving competitive strength.
• The component business model is a building block model approach that was initially developed by IBM. This approach is designed to help identify strategic gaps and systems and process duplications, with the inefficiencies that both create, and one of the key virtues of this toolset is that its findings can be represented in a single snapshot view that is easy to follow, and building block by building block, or as a whole.
• The industrialization of services business model is an approach designed to move a business from ad hoc and one-off processes and events, to taking a more systematic and replicable operational approach. The basic theory and practice behind this dates back to the early 1970’s and efforts to systematize and improve the efficiency of assembly line systems, and through optimized standardization. That approach can also be key to creating sustainable scalability and particularly where key operational processes are either undefined or only loosely followed in practice, with this inconsistency creating barriers to further growth.

As one of my core objectives throughout this blog is to discuss business and business processes as they are evolving to meet the challenges and opportunities of the 21st century, any tools set listing of the type offered above has to be expanded, so as to explicitly include accommodation of the interactive online, and its impact on business models and scalability. Scalability increasingly has be to established in both how the organization is built and run internally, and at the same time in how it connects with its marketplace and external community contexts. For a reference on how this might be developed, I would cite:

• Chen, Te. Fu. 2009. Building a platform of Business Model 2.0 to creating real business value with Web 2.0 for web information services industry. International Journal of Electronic Business Management 7 (3) 168-180.

though I add that Chen primarily focuses on business-to-customer transactions, and on service industry businesses and organizations. Clearly, the same issues arise in a business-to-business context too, and as organizations connect both internally through intranet 2.0 capabilities and with partner businesses and supply chain partners. Ubiquitous computing and communications, and the interactive online context have become major factors shaping and reshaping businesses and marketplaces, and requirements for effective scalability everywhere – and certainly wherever the interactive web and related channels would play a role in creating and sustaining sources of competitive advantage.

As a final thought for this posting that will lead me towards my next series installment, interactive online and its impact on marketplace expectations and activities have led to entirely new types of business models, and to business models whose defining features would not be addressed or even recognized by some of the older business model tools. I am going to discuss business model analytical tools in my next series installment, with this in mind. Meanwhile, you can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.

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