The Business Model Canvas, as shown in Figure 1 below, is a common method to build a business plan in very large and small companies because it is both structured and very simple to understand. The Business Model Canvas is also very Customer-Driven. Yet, there has not been in the past an easy way to plan a detailed Business Architecture model starting from a Business Model Canvas to enable marketing and operation planning. In this article, we will demonstrate how to easily bridge a Business Model Canvas to a Business Architecture model to optimize with agility your marketing and operating modeling.
Business Model Canvas
As mentioned by Alexander Osterwalder in the Harvard Business Review, “The business model canvas — as opposed to the traditional, intricate business plan — helps organizations conduct structured, tangible, and strategic conversations around new businesses or existing ones. Leading global companies like GE, P&G, and Nestlé use the canvas to manage strategy or create new growth engines, while start-ups use it in their search for the right business model. The canvas’s main objective is to help companies move beyond product-centric thinking and towards business model thinking.[i]”
The Business Model Canvas is extremely well explained in this book entitled “Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers[ii]”. The Business Model Canvas defies outmoded business models and help organizations design tomorrow's enterprises. Business Model Canvas is ideal for organizations that are confronted with harsh new realities and needs to adapt, but do not yet have a comprehensible strategy that will allow them to position themselves in front of their competitors. As for this 2-minute video[iii], it provides a quick and comprehensible overview of a Business Model Canvas.
Linking Business Model Canvas to Business Architecture
As indicated by Tom Graves, the Business Model Canvas “is a very useful simplification, yet we need always to remember that it’s only a simplification – and that sometimes, to understand what could make or break a business-model, we do need to be able to do a dive right down into the depths of the detail.[iv]” The necessity of linking Business Model Canvas to Business Architecture, as shown in Figure 2 above, has first been articulated by Steve DuPont, Karen Erwin, Bryan Lail, and Stephen Marshall in a Business Architecture Guild whitepaper entitled “Linking Business Models with Business Architecture to Drive Innovation.[v]” As they have pointed out: “Organizations must be able to articulate their business models in sufficient detail in order to deploy them successfully. A business articulates business models most effectively through the practice of business architecture. Additionally, businesses that leverage business architecture as a vehicle for realizing one or more business models gain value from the synergies across both disciplines. This includes using business architecture to visualize the external and internal impacts of the business model.”
In an excellent presentation made by Boeing’s Steve Dupont, the necessity to integrate Business Model Canvas into an Operating Model using Business Architecture is shown in Figure 3[vi] below. The Business Model Canvas alone provides only the Business Model aspects of an organization. Integrating it to Business Architecture’s Organization, Information and Business Capabilities maps, makes Business Model Canvas a much more powerful organizational tool allowing to design a detailed Operating Model of an organization.
Linking Business Model Canvas to Business Architecture: the Missing Tool
As pointed out recently in the same Business Architecture Guild whitepaper mentioned earlier, “there is no shortage of tooling options for the ideation stage of business model innovation – helping to move business models on paper into a digital environment, promoting virtual forms of collaboration, and rapid iteration. Unfortunately, the available tooling has been restricted to the business model framework; the link to the architecting and implementing stages of the process is largely missing. Solutions provers should strive to fill this gap in the next generation of software, adding links to business architecture and other layers of enterprise architecture, business simulation, decision support, and project management tools. This automation will accelerate business model design’s marriage with the innovative work in these disciplines.[vii]”
This fact has recently changed. It is now possible to link your Business Model Canvas to your Business Architecture for detailed marketing and operating modeling using an application tool[viii].
Bridging your Business Model Canvas to your Business Architecture to Optimize with Agility your Operating Model
The Business Model Canvas is one of the most used method to map business strategies within a Business Architecture model. Yet bridging the Business Model Canvas to Business Architecture is not just limited to business strategies, as shown in Figure 4 below. Each of the 9 building blocks composing a Business Model Canvas can be linked to one another or to one or several Business Architect map(s).
The Business Model Canvas’ popularity is based on the fact this its approach is very Customer-Driven. Each element of the Key Activities building block can be related to business capabilities. The Key Resources/Assets building block can be crossed mapped to stakeholders (either type of employees and/or partners) or assets (like software applications, physical assets, etc.). The Value Propositions building block can be linked to stakeholders (either partners and/or customers), initiatives and business strategies. As for the other building blocks of the Business Model Canvas, they will usually be linked to various Partners/Customers/Personas (which are all stakeholders).
Conclusion
In this article, we have demonstrated how to bridge your Business Model Canvas to your Business Architecture to optimize with agility your marketing and operating modeling. This bridge opens up new Customer-Driven modeling. We shall discuss in a subsequent article how to design a Customer Value Map by matching each customer/persona’s pains, gains and needs to a product/service’s features and benefits for optimal product/service design and relating the Customer Value Map to the rest of a Business Architecture model for optimal marketing and operational modeling. It will then be followed by another article that will demonstrate how to design a Customer Journey Map pin pointing customer’s pains, gains and needs and a product’s features and benefits to their corresponding stage of a Customer/Persona Value Stream that are enabled by Business Capabilities and various Assets, including applications.
Author: Daniel Lambert, VP at Benchmark
Daniel Lambert, M.Sc., is a business strategist assisting business and enterprise architecture teams in collaborating better with the entire planning ecosystem of their firm and increasing the success rate of their organization's digital transformation initiatives and projects. He can be reached at https://www.businessarchitecture.info.
References/footnotes:
- Quote extracted from and Harvard Business Review article entitled “A Better Way to Think About Your Business Model” published on May 6,2013 by Alexander Osterwalder.
- Book entitled “Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers” written by Alexander Osterwalder and Yves Pigneur and published on July 13, 2010.
- This video entitled “BMC Explained” has been uploaded on YouTube on Sept. 1, 2011 by Strategyzer.
- Quote extracted from an article entitled “What’s the scope of a business-model?” written by Tom Graves and published by EA Voices on June 9 2015.
- Whitepaper entitled “Linking Business Models with Business Architecture to Drive Innovation” written by Steve DuPont, Karen Erwin, Bryan Lail, Stephen Marshall and reviewed by Remco Blom, Frank Fons, William Ulrich, Wilton Wratten, Carl Zuhl and published by the Business Architecture Guild on August 2015.
- Figure 3 is slide 16 of a presentation entitled “Aligning Business Architecture with Business Design” made by Steve Dupont from Boeing on March 25, 2015 and published on Business Architecture Guild’s website.
- Whitepaper entitled “Linking Business Models with Business Architecture to Drive Innovation” written by Steve DuPont, Karen Erwin, Bryan Lail, Stephen Marshall and reviewed by Remco Blom, Frank Fons, William Ulrich, Wilton Wratten, Carl Zuhl and published by the Business Architecture Guild on August 2015.
- IRIS Business Architect allows you to link your Business Model Canvas to your Business Architecture for detailed marketing and operating modeling.