service design for business innovation

SERVICEDESIGN FORBUSINESS INNOVATION

YVES PIGNEURUNIVERSITY OF LAUSANNE

ILLUSTRATIONS.FR

AGENDA

BUSINESS MODEL INNOVATION

SERVICE THRU BUSINESS MODEL

BUSINESS MODEL DESIGN

INN

OV

AT

ION

TYPES OF INNOVATION

PROCESS

PRODUCT

BUSINESS MODEL

DILBERT

PRODUCT INNOVATION

FLICKR.COM

PROCESS INNOVATIONFLICKR.COM

BUSINESS MODEL INNOVATION

FLICKR.COM

BUSINESS MODEL INNOVATION

CIRQUE DU SOLEIL

artistic circus

without lionstheater &

opera visitorshigher ticket

prices

create art & atmosphere

stage & manage

spectacle & logistics

“Business model innovation matters” and it is a top priority of CEOs

OPERATING MARGIN GROWTH IN EXCESS OF COMPETITIVE PEERS (COMPOUND ANNUAL GROWTH RATE OVER FIVE YEARS)

BUSINESS MODEL INNOVATIONSOURCE: IBM, CEOS ARE EXPANDING THE INNOVATION HORIZON: IMPORTANT IMPLICATIONS FOR CIOS

IBM

BUSINESS MODEL INNOVATION

BENEFITS CITED BY BUSINESS MODEL INNOVATORS (PERCENT OF RESPONDENTS)

SOURCE: IBM, CEOS ARE EXPANDING THE INNOVATION HORIZON: IMPORTANT IMPLICATIONS FOR CIOS

IBM

SE

RV

ICE

“cartoons drawn on the back of business cards”

“GAPINGVOID” ON BUSINESS MODEL

www.gapingvoid.com

concept

business model

a business model describes the value an organization offers to various customers and portrays the capabilities and partners required for

creating, marketing, and delivering this value and relationship capital with the goal of generating profitable and sustainable revenue streams

[Osterwalder, 2004]

HOW DESCRIBE A BUSINESS MODEL ...FLICKR.COM

AND COMMUNICATE A BUSINESS MODEL ...

FLICKR.COM

WITHOUT A COMMON LANGUAGE?WIKIPEDIA

model

VALUE

PROPOSITION

COST

STRUCTURE

CUSTOMER

RELATIONSHIP

TARGET

CUSTOMER

DISTRIBUTION

CHANNEL

VALUE

CONFIGURATION

CORE

CAPABILITIES

PARTNER

NETWORK

REVENUE

STREAMS

INFRASTRUCTURE CUSTOMEROFFER

FINANCE

[Osterwalder, 2007|

case

TICKETCORNER

concept

value proposition

gives an overall view of a company's bundle of products and servicesit is the sum of the total benefits a customer is promised to receive in

return for a payment (or other value transfer)

[Osterwalder, 2004]

FACILITATE RESEARCH AND REDUCED TRANSACTION COSTS

SPEED UP DISTRIBUTION

IMPROVE THE QUALITY OF SERVICE

IMPROVE FACILITY AND EXPERIENCE OF BUYING

IMPROVE THE TRANSPARENCY OF INFORMATION BY OPENING UP THE INFORMATION SYSTEM

DEVELOP A SENSE OF COMMUNITY, AND IMPROVE THE DIFFUSION OF KNOWLEDGE,

BIND COMPLEMENTARY PRODUCTS

VALUE PROPOSITION

Osterwalder, 2007

BALANCING COST & PERFORMANCEOsterwalder, 2007

CHARTING THE VALUE PROPOSITION[Kim & Mauborgne (2002) Charting Your Company's Future]

DESCRIBING A COMPANY’S OFFER

Osterwalder, 2007

VALUE

PROPOSITION

value proposition 1

value proposition 2

…

OFFER

Event tickets (& access)

Distribution channel reach

POS affiliation

(Easy Outlet)

(Integrated) B2B solutions

DESCRIBING WHO A COMPANY OFFERS VALUE TO

Osterwalder, 2007

VALUE

PROPOSITION

TARGET

CUSTOMER

value proposition 1

value proposition 2

…

target customer 1

target customer 2

…

CUSTOMEROFFER

Individual eventvisitorsEvents &

Organizers

POSPartners

Venues

DESCRIBING HOW A COMPANY REACHES ITS CUSTOMERS

Osterwalder, 2007

VALUE

PROPOSITION

TARGET

CUSTOMER

DISTRIBUTION

CHANNEL

value proposition 1

value proposition 2

…

distribution channel 1

distribution channel 2

…

target customer 1

target customer 2

…

CUSTOMEROFFER

Ticketcorner Website

ATMsAffiliate POS

network

TicketcornerPOS network

Call Center

B2Bsalesforce

model

[Osterwalder, 2007|

VALUE

PROPOSITION

COST

STRUCTURE

CUSTOMER

RELATIONSHIP

TARGET

CUSTOMER

DISTRIBUTION

CHANNELVALUE

CONFIGURATION

CORE

CAPABILITIES

PARTNER

NETWORK

REVENUE

STREAMS

gives an overall

view of a

company's bundle

of products and

services

portrays the

network of

cooperative

agreements with

other companies

describes the

channels to

communicate and

get in touch with

customers

describes the

arrangement of

activities and

resources

explains the

relationships a

company

establishes with its

customers

sums up the

monetary

consequences to

run a business

model

describes the

revenue streams

through which

money is earned

describes the

customers a

company wants to

offer value to

outlines the

capabilities

required to run a

company's

business model

INFRASTRUCTURE CUSTOMER

OFFER

FINANCE

BIRD’S EYES VIEW

Osterwalder, 2007

DE

SIG

N

We believe that if managers adopted a design attitude, the

world of business would be different and better

[Boland & Collopy, 2004]

TOOLBOX FOR DESIGN

CO-CREATION

IDEATION

VISUALIZATION

PROTOTYPING

CASE Lewis building

CO-CREATION

Osterwalder, 2007

IDEATION

VISUALIZATION

FLICKR.COM

PROTOTYPING

CASE Lewis building

ENVIRONMENT ANALYSIS

INNOVATION EVALUATION

DESIGN LOOP

BUSINESS MODEL DESIGN

ENVIRONMENT ANALYSIS

“This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”[West Union internal memo, 1876]

"I think there is a world market for maybe five computers." [Thomas Watson, chairman of IBM, 1943]

“I have travelled the length and breadth of this country and walked with the best people, and I can assure you that data processing is a fad that won't last out the year.”[The editor of management books at Prentice-Hall, 1957]

“There is no reason anyone would want a computer in their home.”[Ken Olsen, President and founder of Digital Equipment Corp., 1977]

"640K ought to be enough for anybody.” [Bill Gates, founder of Microsoft, 1981]

NO PREDICTION BUT ...

IST MOBILIVEKTH WIRELESS FORESIGHT

... BUT SCENARIOS

BUSINESS MODEL DESIGNOsterwalder, 2007

VALUE

PROPOSITION

COST

STRUCTURE

CUSTOMER

RELATIONSHIP

TARGET

CUSTOMER

DISTRIBUTION

CHANNEL

VALUE

CONFIGURATION

CORE

CAPABILITIES

PARTNER

NETWORK

REVENUE

STREAMS

INFRASTRUCTURE CUSTOMEROFFER

FINANCE

artistic circus

without lionstheater &

opera visitors

higher ticket prices

create art & atmosphere

stage & manage

spectacle & logistics

INNOVATION EVALUATION

THOUGHTOFFICE

HBR

INFORMATION SYSTEMS INFRASTRUCTURE

co

mm

un

ica

tio

ns

info

rma

tio

n

ma

na

ge

me

nt

se

cu

rity

arc

hite

ctu

re &

sta

nd

ard

s

rese

arc

h &

de

ve

lop

me

nt

IT e

du

ca

tio

n

APPLICATION INFRASTRUCTURE

VALUE

PROPOSITION

COST

STRUCTURE

CUSTOMER

RELATIONSHIP

TARGET

CUSTOMER

DISTRIBUTION

CHANNEL

VALUE

CONFIGURATION

CORE

CAPABILITIES

PARTNER

NETWORK

REVENUE

STREAMS

INFRASTRUCTURE CUSTOMEROFFER

FINANCE

Osterwalder, 2007

ENTERPRISE ARCHITECTURE

BUSINESS MODEL

DESIGNING ...

SERVICES ...

FOR INNOVATION