Archiv der Kategorie: Business modeling

Business modeling consists of topics like business idea, business concept.

The process – the unknown entity

In the 90s of the last millennium Business Process Reengineering, briefly BPR, swept over large enterprises. Companies streamlined initially in-house and eventually inter-company processes as part of lean management. This wave has weakened in English-language environment after a hype in the second half of the nineties (see Ngram: http://ow.ly/yJq6p). The interest in the business process rose continuously in German-speaking countries (see Ngram: http://ow.ly/yJr5n). Everybody talks regularly of processes, workflows and continuous process improvement without the defined features that make the sequence to a process. The process – the unknown entity.

Prozess

The process-oriented description of functions and/or activities, the so-called process, consists of individual steps. Those again are functions that consist of individual steps, and so on, independent of the format that is used for depiction *1. The documentation of the sequences facilitates the planning, the realization, the monitoring and the redesigning. Few people are aware of the fact that the description of the process is not the reality. The same way as thematic maps only provide a look at geological, political or economical details, the process consists of relevant steps. Additionally, a process has the following, formal criteria.

A process…

  • … needs a defined start and a defined end. The more vague the start or end is, the worse the quality of the description.
  • … runs WITHOUT interruption from the beginning to the end. As soon as a sequence is interrupted, the activities stop inadvertently for an indefinite period. Two processes with separate start and end are created.
  • … is repeatable. The purpose of process development is that a procedure functions again and again reliably for all participants. One-time procedures are coordinated at run-time, since the ex-ante effort can in no way be compared to the benefit.
  • … runs across the borders of different areas of responsibility. Within a responsibility, the description does very little good, since the employees act independently.
  • … has defined rules. All involved people always have to know what, how, from whom, with which results, to whom have to be delivered, in order to fulfill the purpose of the function. Deviations jeopardize the outcomes.
  • … has a decision maker. Since the process runs across independent responsibilities, it is necessary that the decision for the process be bundled in one hand, so that the process goals are not undermined by other department goals.

As soon as you examine a business process the next time, look for the features mentioned. If one is missing, there is a need for optimization.

*1 The question of the appropriate detailing level will be discussed on another occasion.

Enough is vague without scale

The business model does not say which, for what, how, with whom or wherewith the undertaking has to be realized. It points out that you have to describe content-wise Which, For what, How, With whom and Wherewith. This is the benchmark for calibrating yourself in the development of a new or the transformation of an existing activity.

Geschäftsmodell

If an enterprise is realized, the following aspects preoccupy normally every executive board, every project and every employee.

WHAT has to be documented on which level of detail?

In the planning, execution and controlling of program, it becomes repeatedly apparent that the list of tasks, the start and end dates, the dependencies as well as the responsibilities facilitate the steering of a project substantially. Currently, structured approaches, like the Businesses Model Canvas and Business model by memecon, are developed for modelling the venture

Isn’t it negligent, if a new firm is only based on numbers that are computed in a spreadsheet analysis? Often they forget the content-wise description of the actual offer, the additional possibilities of income, the entire value creation, the necessary relations and means. Additionally, the ways that are used to keep contact with the involved people and the mechanisms for coordination provide first ideas for steering the undertaking.

The venture is sufficiently outlined, if statements for all aspects are available. The level of detail is defined by the time that can be spent. After at most one fifth of the duration, all relevant aspects should be presented in an agreed way and the question about the feasibility should be answered. Further details are determined in the following steps.

Bottom line: The development of the business model is a structured approach that facilitates the content-wise specification of the elements. The explanations should be prepared as detailed as needed to decide the further development of the business. In the subsequent steps, the individual aspects will be further refined.

Videos:

The self-image in a nutshell: http://ow.ly/wsI4F

Potential application areas: http://ow.ly/wsJ1F