Streamline Training & Documentation: Defining Your Business Model

Tuesday, September 18, 2007

Defining Your Business Model

A business model can be defined at widely different levels of detail. At one extreme is the high-level definition that answers such questions as:

What is your target market?

What are your key value propositions to that market?

How do you get paid?

How do you create and capture value?

Who are the key third parties?

The above questions come from Open Innovation: The New Imperative for Creating and Profiting from Technology, by Henry Chesbrough, executive director of the Center for Open Innovation at the Institute of Management, Innovation & Organization at the University of California-Berkeley.

At the other extreme is the incorporation of precise detail concerning business processes enabled by software like IBM's WebSphere Business Modeler (see graphic below).

Click to enlarge
Source: www.ibm.com
IBM created Business Modeler (current version: 6.0.2) as part of its support of customers' movement toward service-oriented architecture.¹ Business Modeler "is designed specifically to ... facilitate faster and more accurate communication between between the business and IT domains" concerning both initial implementation of business processes and changes to existing business processes.

A business analyst² can use Business Modeler to diagram the flow of a process, along with details for resources, roles, work item definitions, costs, timetables and duration.

The analyst can then analyze how the details interact, looking for bottlenecks, resource problems, inefficiencies, and other possible opportunities for improvement. This analysis can be assisted by what-if simulations in which the analyst varies inputs, constraints and/or resources.

The analyst can also create criteria that will be used to monitor performance of the process once it is implemented in the defined form. These key performance indicators (KPIs) can be included in a dashboard display.

An online demo of Business Modeler is here.

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¹ "A service-oriented architecture (SOA) lets you build, deploy, and integrate individual business functions and processes independently of the applications and computing platforms on which they run. As a key component of such an architecture, IBM WebSphere Business Modeler helps bridge the gap between business objectives and process implementation." (Source: Product overview)

² "A Business Analyst typically models business processes for optimization or to re-engineer existing business processes or define new buisness processes. Business analysts typically require no programming experience, because they are focusing on the business processes." (Source: WebSphere Business Modeler V6.0: Overview)

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Labels: Business acumen, Strategy, Systems thinking

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