BUILDING THE BUSINESS MODEL

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BUILDING THE BUSINESS MODEL

The enterprise business model depicts a complex system, and building it can be a major effort. Accordingly, the effort should be planned and managed like any complex business project. The major steps in a model-building project plan follow.

Obtain a Committed Sponsor at the Appropriate Level of the Enterprise

Developing a comprehensive business model can involve considerable information gathering and analysis. Substantial time and cost may be involved. Accordingly, there must be a sponsor for the effort, at the appropriate level of the enterprise, who will back the model design team and ensure that the necessary funding and other resources are provided. In essence, the sponsor will legitimize the effort and be responsible for making sure that the finished model meets its design objectives.

Set out the Purpose and Scope of the Model

The sponsor and others, as appropriate, clearly articulate the purposes and expected uses of the model. The purpose and use statement provides the basis for determining the scope of the model (e.g., in terms of geographic coverage, business unit coverage, and ‘‘as is’’ vs. ‘‘to be’’ views of the enterprise). The purpose, use, and scope statements then are translated into model-development time and cost objectives for the design team.

Gather and Orient the Model-Building Team

The team that will develop the enterprise business model is assembled and briefed on the purpose, scope, and framework of the model. The team members may be from various parts of the enterprise, typically including representatives from the key business processes (strategic, core, and resource management). The internal team may be supplemented by outside resources, as necessary (e.g., information specialists, process facilitators, and the like). A skilled project manager is appointed whose role is to ensure that the model-development effort is properly planned and completed on time and within budget.

Determine Information Requirements for Each Element of the Model

Each element of the model requires the development of information. In most cases the information will be readily available within the enterprise, but, particularly in the external forces area, the infor- mation may have to be developed with the assistance of outside information providers. Determining the information requirements for each element will highlight those areas that will be problematic and require special attention.

Construct the Business Model

The team gathers, compiles, and integrates the information to develop a draft of the business model. The model is depicted graphically and supported by textual material, as necessary. Reviews are conducted to ensure that the model is developed to an appropriate level of detail and that the various elements are properly integrated.

Build Consensus for the Model

Consensus for the model is built best through involvement. Such involvement can come through participating directly as a member of the design team, participating as a member of a project ‘‘steering committee,’’ or acting as a reviewer of the draft business model. The key is knowing who needs to be involved and in what ways they can participate most effectively.

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