Critical in the analysis of business models in all their richness and diversity is the notion of value. In an ideal scenario business leaders (or business analysts on their behalf) would want to demonstrate how value can be retained, improved and delivered to customers and stakeholders. Classical performance metrics like ROI or EBIT are reasonable indicators of performance and value within organisations, but they are largely based on rigid accounting views that favour company assets and past performance over more dynamic metrics reflecting customer engagement and innovation. There is a notable shift to new indicators of value, illustrated by company valuations that are no longer a reflection of current profitability, but their potential to provide sustained value to large number of customers. Amazon, Linkedin and Facebook are good examples in that respect.
Much has been written about the innovative character of these companies, but in the end most of their success and business value are based on three factors:
At this point, people tend to get confused. Not long ago processes were all the rage, now it is about services. Are processes no longer required? And what else might be needed to ensure that not only the right services are delivered, but that a business learns from the way their customers interact with their service to achieve maximum value?
I recently created the diagram on the left to illustrate the relationship between three key concepts of a modern business architecture. This allowed me to work with a client to work on service design in what was largely a process-driven organisation. The key differentiator in this paradigm is that processes create value, they use the company assets or capabilities to enable services to deliver value to customers. Value only exists in the eyes of the beholder, so when designing a service much attention needs to be paid to the ability for an organisation to learn from customer feedback and the overall experience. Customers don't do process - in fact they have enough scars to prove that processes alone don't deliver the kind of experience these customers are after.
Much has been written about the innovative character of these companies, but in the end most of their success and business value are based on three factors:
- What capabilities does a company bring together to deliver a unique product or service
- How is that service created and delivered to end-customers
- How does the company exploit the customer experience and feedback to improve that service
At this point, people tend to get confused. Not long ago processes were all the rage, now it is about services. Are processes no longer required? And what else might be needed to ensure that not only the right services are delivered, but that a business learns from the way their customers interact with their service to achieve maximum value?
I recently created the diagram on the left to illustrate the relationship between three key concepts of a modern business architecture. This allowed me to work with a client to work on service design in what was largely a process-driven organisation. The key differentiator in this paradigm is that processes create value, they use the company assets or capabilities to enable services to deliver value to customers. Value only exists in the eyes of the beholder, so when designing a service much attention needs to be paid to the ability for an organisation to learn from customer feedback and the overall experience. Customers don't do process - in fact they have enough scars to prove that processes alone don't deliver the kind of experience these customers are after.
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