continuous business model planning...continuous business model planning uses “business model” as...
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The Value Management Platform
Continuous Business Model Planning
VDMbee Academy course
for Value Management Professional
Introduction - Vision
1
www.vdmbee.com
• Why “Continuous Business Model Planning”
• Going beyond existing approaches
• Overview of some main concepts, high-level
Overview2
• What it is: Creation of a clear and shared view of the development of the Business.
• Why this is needed: Aninstrument is needed to steerthe Business, and stay in control,such that it can cope withcontinuous change.
• How we do this: Support continuous molding of the Business, represented as Value creating machine in a Value network ecosystem, with direct impact on Value objectives in a phased manner, and allowing for instantaneous exploration of alternatives and what-if scenarios.
Why “Continuous Business Model Planning”3
Business Model4
Business Model
de facto standard framework
Continuous Business Model Planning uses “Business Model” as unit for Business planning
Business Model Canvas
The story of how, in a particular product-market combination, value is created, delivered and captured
Business Model Canvas
For ideation; static
Single BM
Single perspective
Customer relationship
Customer Value Proposition
Cost & revenue
Channel: Resource or Partner ?
BM framework for Continuous BM Planning
For prototyping; dynamic
Ecosystem of interrelated BMs
Multiple perspectives (of Participants)
Structured relationships between all participants in ecosystem
Value Proposition exchanges in ecosystem
Uniform concept of Value; values for all participants
No ambiguities
Business Model framework needs for prototyping5
Prototyping in todays complex environments6
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• The context of Continuous Business Model Planning:
Beyond Business Model Canvas7
• 6 dimensions
• focus on relationships
Business Model Canvas Business Model Cube *)
*) Based on work of Peter Lindgren
Basic Business Model concepts that we use (6 dimensions)8
Activities
Competencies
Partners
Values
Customers
Value Propositions
+ More to address:
• Planning
• Relations
• Value Management Platform uses embedded Value measurement and calculations.
• May spreadsheets be a viable alternative ?
• Not for typical business users !
❖ No option to “re-invent the wheel” (deep business semantics).
❖ Too complicated to comprehend equivalent semantics by just rows and columns.
❖ Developer skills would be required ..
➢ Enforcement business semantics
➢ Re-use of business semantics (separation of structure and “content”)
➢ Etc.
More than can be done with spreadsheets ..9
The Value Management Platform
Continuous Business Model Planning
VDMbee Academy course
for Value Management Professional
Module 1 - Discover
10
Learning Objectives11
ExerciseDemoTheory
How to do “unstructured” discovery
Apply suggested structured discovery techniques
VDMbee Approach12
Theory13
ExerciseDemoTheory
• Unstructured discovery: “download” & ideation, including interview and brainstorm
• Structured discovery techniques:
❖ Business Model map
❖ Vision statement & key Values
❖ Business Ecosystem Map
❖ Strategy map
Discover14
Unstructured Discovery first15
Unstructured
• Web research
• Interviews
• Documents
• Brainstorms
Structured
• BM Map
• Vision / Key Values
• Bus Ecosystem
• Strategy Map
Applied to LCC16
Business Model Map17
• Discovery of As-Is and To-Be Business Models
• Contribution of Business Models
• Tool: Business Model Map (Peter Lindgren)
• Value exchanges between Participants
• Tool: Business Ecosystem Map (variation to Value Network, Allee)
Business Ecosystem Map18
• Connecting Strategy elements to a cause-effect Value creation story
• Also a way to understand the essence of the use case
• Tool: Strategy Map (Kaplan & Norton)
Strategy Map19
• E.g. Business Model Canvas (Osterwalder)
Other approaches20
• Business Model map (physical, ppt) for As-Is (complete)
• Business Ecosystem Map (ppt) for As-Is (complete)
• Strategy Map (ppt) for As-Is (starter)
Demo21
ExerciseDemoTheory
Business Model map for As-Is (complete)22
Business Ecosystem Map for As-Is (complete)23
Strategy Map for As-Is (starter)24
• 1.1 - Discover more As-Is Business Models
❖ Input: Use Case reader (Low Cost Carrier)
❖ Use: Business Model map template (ppt)
• 1.2 - Complete Strategy Map for As-Is
❖ Input: Use Case reader (Low Cost Carrier)
❖ Use: Strategy Map template (ppt)
• Present results of Module 1
Exercises25
ExerciseDemoTheory
The Value Management Platform
Continuous Business Model Planning
VDMbee Academy course
for Value Management Professional
Module 2 – Prototype / Business Model Plan
26
Learning Objectives27
ExerciseDemoTheory
How to proceed from “Discover” to “Prototype”
How to create and scope a Plan in VMP
Where are we: VDMbee Approach28
Where are we: Use case Plan29
Unchanged Policy
Low Fares
Low Fares &
Partial Lease
Plan
Phase
Alternative
Theory30
ExerciseDemoTheory
• Steering the Business
• Purpose of Business Model as Plan unit
• Multi Business Model planning for innovation & transformation
Value Delivery Management: Steering the Business31
Alternative 2
Value
Alignment
In Control
+ 20 %
Plan
PHASE 3
Steering on Values32
Better businesses innovate and transform continuously to create and secure Value.
Values are the matters of interest or importance to the stakeholders of the business.
Value is a measurable factor of benefit delivered to a recipient
• Some common categories of Value:
❖ Customer values
❖ Shareholder values
❖ Employee values
❖ Financial values
❖ Partner values
❖ Social contribution values
❖ Sustainability values
• During this course, in the context of the use case, many examples will be encountered in most of these categories
Steering on Values33
Steering on Values34
Management of an innovation or transformation initiative requires a Plan as the vehicle to define and execute strategies.
Plan Values are defined as basis for management and measurement of plan progress, and of success of plan outcomes.
Plan Values are the basis of defining Plan objectives.
Value Objectives are achieved in a Phase-based manner
Phases are the steps that are defined towards achieving the goal.
Value objectives can be defined and managed per Phase.
Per Phase, one or more Alternatives can be defined
Alternatives are possible scenarios that are explored with respect to their achievement of Value objectives of a Phase.
5
Business Model as unit for strategic business planning8
For As-Is and To-Be, and any Alternative, Business Models define the business, and how it operates
Business Model37
A Business Model defines how a Business, in a particular product-market combination, creates and delivers Value for the stakeholders involved
Business Model
A product-market combination is typically defined as the combination of a Value Proposition provided to a Customer (or Market Segment).
A Business Model is the story of how value is created, delivered and captured *)
*) Saul Kaplan
Multi Business Model planning
A Business typically has multiple Business Models
11
It is also the home base for Competencies that are deployed in the Business Model.
The owning Enterprise of a Business Model is called the Business
LCC Business with BMs39
• Discuss and propose scope of Plan for “Prototype”
• Create Plan, one Phase, one Plan Value and one BM (VMP)
• Explain My Plans and Plan Models and related details (VMP)
Demo40
ExerciseDemoTheory
Busines
s Plus
Flights
Econom
y
Shops
Flights
Busines
s Plus
Family
Extra Groups
Airport
Parking
Airport
Transfer
s
Car
Rental
Hotels
City
Sight-
seeing
Gift
voucher
s
Advertis
e with
usSamsonit
e Bags
HR
Competency
Value Stream
Customer
Business Value
Controversial
Messaging
Free publicity
/ low
marketing
cost
Low
Overhead
Low profile
HQ
No airport
check-in
No Frequent
Flyer
ProgramContracts
with
Secondary &
struggling
airports
Subsidy
Lower
training cost
Single model
aircraft
Higher pilot &
crew
allocation
flexibility
Higher pilot
& crew
productivity
Less
restrictive
work rules
High
promptness
Lower
maintenance
cost
Young fleet
(max 5
years)
Lower
aircraft
acquisition
cost (larger
discount)
Competency
Value Stream
Customer
Business Value
Contracts
with
Secondary &
struggling
airports
Higher pilot
& crew
productivity
High
promptness
Quick turn-
around
No seat
allocation
Lower landing
& handling
charges
No docking at
gate
Point-to-point
flights
No
compensatio
n for missed
connections
Charge hold
luggage
No delay due
to waiting for
connecting
passengers
Higher
customer
satisfaction
Fly at higher
frequency
Different
aircraft
interior
Higher
Market share
Competency
Value Stream
Customer
Business Value
Young fleet
(max 5
years)
Lower
aircraft
acquisition
cost (larger
discount)
Charge hold
luggage
Higher
customer
satisfaction
Fly at higher
frequency
Different
aircraft
interior
Higher
Market share
Higher
aircraft
utilization
Smaller fleet
Lower fuel
consumption
Lower fuel
cost
Lower fuel
carriage
More
sustainable
(“green”)
Large
destination
variety
Low fares
(“No frills”)
Premium
priced add-
ons
Competency
Value Stream
Customer
Business Value
Premium
priced add-
ons
Higher
ancillary
revenue
Charging
passengers
for check-in
More duty-
free in-flight
business
Aggressive
sales targets
for attendants
Sales training
for attendants
“Creative”
fiscal
constructs
Low labor
rates
Salary
deductions
Ignore labor
unions
• 2.1 - Create Plan, Phase and Plan Values (As-Is)
❖ Input: Vision statement and key Values; Strategy Map
❖ Use: VMP
• 2.2 - Create BMs (As-Is)
❖ Input: Business Model map
❖ Use: VMP ; dataset LCC_Exercise_2.1.vpk
• Present & Demo results of Module 2
Exercises46
ExerciseDemoTheory
Value aggregation & measurement47
Profit
Revenue Cost
Subsidy Revenue Fares RevenueAncillary Revenue
Check-In Fee RevenueAdd-Ons Revenue Revenue Share Revenue
Check-In Fee Economy Value
Prototyping in todays complex environments48
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Values influence each other:
• within and across BMs
• From BMs to Plan and vice versa
This enables impact analysis and what-if calculations of BMs, ecosystems of BMs and the Plans that they support.