Textbook
Vadim Shmal
Olga Madyar
Pavel Minakov
© Vadim Shmal, 2022
© Olga Madyar, 2022
© Pavel Minakov, 2022
ISBN 978-5-0059-2516-9
Создано в интеллектуальной издательской системе Ridero
1 BUSINESS MODELS, THEIR DEVELOPMENT HISTORY AND CLASSIFICATION
1.1 Business modeling development history
In the business modeling development history, there are four stages based on a conceptual approach to the organization management (Figure 1.1).
At the first stage of business modeling development, the implementation of large-scale projects in various activity fields began. There has been a change in the production conditions of commercial and manufacturing companies, which has led to a number of problems arising in the organization activities. The problem analysis revealed disadvantages in the work of the organizational and technical system, which provides for the work of personnel, equipment, software and ways of their interaction.
Therefore, it was proposed to develop adequate ways of interconnecting the presented elements. The most well—known methodology is the structural analysis methodology and design of SADT systems, which was developed by Douglas Ross in 1973.
In the second stage, the development of enterprises activities describing methods gained popularity, due to the widespread introduction of personal computers and the development of information systems. The most popular organization describing methodologies at this time are modeling using data flow diagrams of various notations, developed by Jordan De Mark and Gainar-Sarson, information modeling by Chen Barker using entity-relationship diagrams, modeling of business processes of EPC notation, dynamic, functional analysis based on various types of Petri nets and the creation of a separate areas of software using CASE technologies (Computer-Aided Software/System Engineering), which have the ability to automate the work of software development specialists.
The third stage is characterized by the appearance of the first software products designed to solve organizational problems of enterprise management. During this period, the business environment is fundamentally changing, CASE tools are changing, which are no longer intended for automating processes, but for implementing a wide range of tasks of business analysis of enterprises’ activities. CASE models began to cover the full cycle of control system building (Figure 1.2).
A separate class of programs designed to solve management organizational issues and business modeling is being added – «BMS» (Business Modeling Software). The business model of this class includes a system of company goals, models of business processes and organizational structure of the company, as well as a reference book on the documents used. Business modeling during this period is inextricably linked with the" drawing development" of the organization, as the graphical representation allows you to make the company’s business model more transparent, accessible to the clients understanding, ready for regular analysis, management and further improvement.
The fourth stage is associated with the development of business modeling to a separate management methodology, which is called «business engineering». This methodology consists in analyzing and improving the company’s activities through the use of a process approach. A prerequisite for the success of the company is the availability of internal changes skills and their systematic application. Constant monitoring, analysis and continuous improvement of the company’s activities are among the main tasks of the new divisions.
1.2 The concepts of «business modeling» and «business model». Key elements and structural blocks of business models
A business model includes a combination of two concepts: a business and a model. A business is an economic or entrepreneurial activity aimed at making a profit systematically. A model in the usual sense is an abstract description of an object in some form that differs from the form of real execution. It follows from these concepts that a business model is an analytical, conceptual tool designed for the abstract description of various types of activities, the study of a complex business system, aimed at making a profit and reflecting the logic of the business.
The business model is used to describe the basic principles of the creation, development and successful operation of the organization. The details of the business model are determined by the goals of modeling and the accepted point of view. Within the framework of the business model, all objects, processes, rules for performing operations, the existing development strategy, as well as criteria for evaluating the effectiveness of the system are displayed.
The process of finding out or reproducing the properties of complex business systems, using an abstract description in the form of graphical components, mathematical equations, diagrams, plans, algorithms and programs is business modeling.
To determine the essence of the concept of a business model, two approaches are identified.
The approach directed inside the enterprise implies considering the activities of the enterprise from the point of view of business processes and technologies. The second approach involves focusing on the values of customers for whom the company should create a favorable environment, and this approach is also aimed at the results of the activities of this enterprise.
To date, there is no single point of view and a single definition of «business model».
To determine the content of an enterprise’s business model, several key factors are identified (Figure 1.3).
The concept of a business model is quite new. Schematically, Alexander Osterwalder was able to reflect it in 2004 in the form of a drawing according to which the company operates. In his opinion, the work of absolutely any company can be described in nine blocks. These blocks describe the scheme of the company’s work, its resources and main processes (Figures 1.4) [2].
As can be seen from the structure of the company’s work scheme, all the details of the company’s activities were covered by two approaches – inside the company and directly with external customers.
1.3 The main stages of building a enterprise business model
Business modeling is an ambiguous process and it is never possible to accurately predict the demand for a company’s activities. It is possible to formulate an abstract business model of an enterprise by creating its template – a general scheme consisting of 9 blocks (Figure 1.5) reflecting the logic of the work of any company (Figure 1.6).
1 Block – Consumer segment (customers).
This block determines the consumer base of the company, because the client is the heart of the business model, from which the main blocks will be based. Consumer segments are divided into 6 categories, the difference of which is due to differences in offers, requests and sales channels (Figure 1.7).
2 Block – Offer (provided value).
The offer block reflects a certain value for the segment of consumers, which can be both quantitative and qualitative.