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The implications of digitalization on business model change
Blekinge Institute of Technology, Faculty of Computing, Department of Software Engineering. Ericsson AB.
Blekinge Institute of Technology, Faculty of Computing, Department of Software Engineering.
Lund Univeristy, Department of Innovation Engineering, Sweden.
(English)In: Business & Information Systems Engineering, ISSN 1867-0202Article in journal (Other academic) Submitted
Abstract [en]

Many software-intensive product development companies are still struggling with the alignment of business and technology changes to find an optimal balance between products and services while remaining agile, effective, and efficient. Business model alignment is highlighted as a new business model research area for understanding the relationships between the dynamic nature of business models, organization design, and the value creation in the business model activities.

In this paper, we synthesize the impact of digitalization on business model change for the software-intensive product development industry. Based on established theories, we link effectiveness and efficiency, to value creation in business model activities and organizational learning, in a step towards conceptualizing business model change as a significant part of developing software architectural support for a business model change in a learning organization.  

Our unit of analysis is the value created in a transaction between two actors in a business model activity, and how that value is supporting transforming a capability into an efficient ability. Based on our results and to facilitate the cross-disciplinary analysis of business model dynamics, we present seven propositions and a conceptual model linking effectiveness, efficiency, value, transaction, and organizational learning to business model change via the \textit{value membrane}. 

Keywords [en]
business flexibility, digital business modeling, equivocality, knowledge creation, knowledge management, intent-driven systems, learning organization, value capture, value creation, value membrane
National Category
Software Engineering
Identifiers
URN: urn:nbn:se:bth-17756OAI: oai:DiVA.org:bth-17756DiVA, id: diva2:1301499
Funder
Knowledge Foundation, rofessional Licentiate of Engineering (PLEng) Pilot Run 2014-2018Available from: 2019-04-02 Created: 2019-04-02 Last updated: 2019-04-05Bibliographically approved
In thesis
1. Towards Effective and Efficient Business Model change: Opportunities and challenges for software-intensive product development companies
Open this publication in new window or tab >>Towards Effective and Efficient Business Model change: Opportunities and challenges for software-intensive product development companies
2019 (English)Licentiate thesis, comprehensive summary (Other academic)
Abstract [en]

Digitalization initiates and drives significant changes to the process level, organization level, and business level of software-intensive product development (SIPD) companies and their customers. Digitalization creates new opportunities through digital transformation strategies of the business environment. Digitalization also significantly reduces the turnaround-time on a transaction, driving new challenges for the alignment of business and technology changes. For a successful business model realization, a company must understand what capabilities the organization has (in staff and products), what is required, and more importantly, how to turn these capabilities into good-enough abilities without disturbing the effectiveness and efficiency of the daily operations. Integrating the product and service development and the value delivery with a learning organization is critical for efficient business model change (BMCh).

This thesis seeks to develop conceptual models for how BMCh is linked to value, learning organization design, and the transformation of capabilities into abilities derived from business model activities and actor interactions. Such conceptual models facilitate to investigate and identify critical mechanisms and capabilities needed to effectively and efficiently manage BMCh at full scale for SIPD companies, allowing them to exploit the on-going digitalization, may it be through (disruptive) business model innovation, technology innovation, or by continuously adapting and evolving the business operations.  

I use the SIPD company as the unit of analysis, with the dual-lens of value and knowledge, set in the context of a business model and how the value creation and capture are influenced by the interaction between two actors performing a business model activity. I build on the business model literature and infuse theories for knowledge creation, learning organizations, and contractual promises to create value. Conducting a cross-disciplinary literature review, followed by a synthesis of related literature, industry best-practices, and an associated design science study, my propositions were validated in a longitudinal case study exploring a service industrialization program in the telecommunication industry.

I have produced five conceptual models and seven propositions as a start to be able to support the design of a governance mechanism, as the critical engine for both the learning organization and effective and efficient BMCh. The industry now explores the models found during the case study.

My synthesis shows a need for further research into BMCh regarding early detection and measurements of gaps in value, gaps in knowledge, ambiguity, equivocality, and abilities. Flexible role-based governance views present the measurements, as part of the governance mechanisms for full-scale, effective, and efficient BMCh. Further, I also aim to implement such governance mechanisms in software, by using the associated research in intent-driven systems. In the meantime, I propose industry to build knowledge and experience related to the seven propositions.

Place, publisher, year, edition, pages
Karlskrona: Blekinge Tekniska Högskola, 2019
Series
Blekinge Institute of Technology Licentiate Dissertation Series, ISSN 1650-2140 ; 6
Keywords
business modeling, business flexibility, Learning organization, digitalization, governance, value capture, value creation, knowledge creation, knowledge management
National Category
Other Electrical Engineering, Electronic Engineering, Information Engineering
Identifiers
urn:nbn:se:bth-17759 (URN)978-91-7295-375-8 (ISBN)
Presentation
2019-05-07, Karlskrona, 08:20 (English)
Opponent
Supervisors
Funder
Knowledge Foundation, Professional Licentiate of Engineering Research School
Available from: 2019-04-05 Created: 2019-04-04 Last updated: 2019-05-09Bibliographically approved

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Wilson, MagnusWnuk, KrzysztofBengtsson, Lars

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