1. An e-Business Model Ontology for Modeling e-Business Bled Electronic Commerce Conference 2002 Bled, June 2002 Alexander Osterwalder Yves Pigneur HEC Lausanne alexander.osterwalder@hec.unil.ch (+41 21) 692.3420

2. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 2 Agenda 1.Why business models? e-business logic todayp3p3 What are business models good for?p7p7 2.State of the art in business models Ontologies, business models, toolsp8p8 3.Further research Research levels, research projectsp9p9 4.The e-business model ontology 4 pillars: product, customer, infrastructure, financep10p10

3. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 3 e-Business logic today Business Processes Strategy Planning level Implementation level Information & Communication Technology (ICT) pressure e-Business processes e-Business Technology layer Positioning Objectives & goals Communication of strategy Problem: Interpretation of strategy Result: Re-inventing strategy ?

4. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 4 e-Business logic tomorrow Business Processes Business Model Strategy Planning level Architectural level Implementation level Information & Communication Technology (ICT) pressure e-Business opportunities & change e-Business processes e-Business Technology layer Conceptual architecture of a business strategy

5. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 5 What is a business model anyway? A business model is not a description of a complex social system itself with all its actors, relations and processes. Instead it describes the logic of a “business system” for creating value, that lies behind the actual processes. A business model is the conceptual and architectural implementation of a business strategy and represents the foundation for the implementation of business processes Business Processes Business Model Strategy Business Impact

6. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 6 A company that defines it’s business model can... Understand –The process of modeling social systems or ontologies– such as an e-business model – helps identifying and understanding the relevant elements in a domain and the relationships between them (Ushold et al., 1995; Morecroft, 1994). Share knowledge –The use of formalized e-business models (i.e. an ontology) helps managers communicate and share their understanding of a business among other stakeholders (Fensel, 2001). React to rapid change –Mapping and using e-business models facilitates change. Business model designers can easily modify certain elements of an existing e-business model (Petrovic et al., 2001). Objects XML

7. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 7 A company that defines it’s business model can… (continued) Measure –A formalized e-business model can help identifying the relevant measures to follow in a business, similarly to the Balanced Scorecard Approach (Norton et al., 1992). Simulate & learn –e-business models can help managers simulate businesses and learn about them. This is a way of doing risk free experiments, without endangering an organization (Sternman, 2000). System thinking BSC

8. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 8 State of the art Ontologies –Enterprise ontologies: TOVE (Toronto Virtual Enterprise), The Enterprise Ontology (html), Core Enterprise Ontology (CEO)html –e-Business Process ontologies (in XML): Transactions (xCBL, cXML), Ontology.org (html)html Business Models –Classification: Timmers (pdf), Rappa (htm), Tapscott.pdfhtm –Modeling (partial…): Hamel, Gordijn, Afuah, Linder (html).html Tools –MIT eBusiness Process Handbook (html)html –System Dynamics... http://ecommerce.ncsu.edu/business_models.html

9. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 9 3 research levels Level 1 Level 3 Level 2 e-Business Model Equations e-Business Model Ontology e-Business Model Measurements Understanding model elements and relationships, communicate and share models, change models Pilote, follow, alert Simulate models, play and learn by changing models, understand consequences of change e-Business Model Simulator, e-Business Model Games e-Business Model Balanced Scorecard e-Business Model Framework (eBMF), Language (eBML), Handbook (eBMH) and Design Tool Research ProjectsManagement Use

10. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 10 Definition of a business model A business model is nothing else than the value a company offers to one or several segments of customers and the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams.

11. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 11 Definition of an e-business model PRODUCT INNOVATION INFRASTRUCTURE MANAGEMENT CUSTOMER RELATIONSHIP FINANCIAL ASPECTS

12. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 12 Definition of an e-business model Capabilities Value Proposition Target Customer PRODUCT INNOVATION

13. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 13 Definition of an e-business model Capabilities Value Proposition Target Customer PRODUCT INNOVATION Resources Value Configuration Partner Network INFRASTRUCTURE MANAGEMENT

14. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 14 Definition of an e-business model Capabilities Value Proposition Target Customer Resources Value Configuration Partner Network PRODUCT INNOVATION INFRASTRUCTURE MANAGEMENT Information Strategy Feel & Serve Trust & Loyalty CUSTOMER RELATIONSHIP

15. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 15 Definition of an e-business model Capabilities Value Proposition Target Customer Resources Value Configuration Partner Network Information Strategy Feel & Serve Trust & Loyalty PRODUCT INNOVATION INFRASTRUCTURE MANAGEMENT CUSTOMER RELATIONSHIP Cost Structure Revenue ModelProfit/Loss FINANCIAL ASPECTS

16. Université de Lausanne WEB WEB | AGENDA | FINAGENDA FIN © 2002 Osterwalder, HEC Lausanne e-business 16 Questions & more information alexander.osterwalder@hec.unil.ch http://inforge.unil.ch/aosterwa