A Formal Basis for Business Model Evaluation with Linguistic Summaries

Abstract

Given its essential role in understanding, explaining and structuring digital innovation, we see the increased prevalence of the business model concept as a unit of analysis in IS research. In contemporary, fast-paced markets, business models are volatile in nature and should be continuously innovated to accommodate new customer needs and technology developments. Business model innovation can be considered as an iterative process to guide business models from ideation towards implementation, in which the proper evaluation of business model prototypes is essential. For this evaluation, we need normative guidance, tools and rules to understand the relative performance of a new business model design. In the early design phases, this implies dealing with high levels of uncertainty. A few techniques and methods have been proposed for this purpose, but these lack the formal basis required for systematical application and development of automated evaluation tools. As a novel approach, we have earlier proposed the application of linguistic summarization to support early-phase, soft-quantitative business model evaluation. In this paper, we focus on a structural formalization of this approach as the basis for the development of well-defined user guidelines and automated evaluation tools. In doing so, we bridge the existing gap between qualitative and quantitative business model evaluation. We demonstrate the formalization by means of a running case inspired by a real-world project in the highly dynamic urban mobility domain.

Methods that bridge business models and business processes: a synthesis of the literature

“…The business model design serves as a starting point for identifying processes and organizational capabilities (Adali et al ., 2020; Turetken and Grefen, 2017). Based on the organization's capabilities and processes, different business model prototype alternatives can be evaluated to identify their potential impact and select the most promising alternative (Gilsing et al. , 2022; Wirtz, 2020).…”

Evaluating the Design of Service-Dominant Business Models: A Qualitative Method

“…Lastly, Gilsing et al (2020) and Wilbik et al (2020) propose a technique to support the translation of strategic objectives into business model catered KPIs, which can be used to support service-dominant business model evaluation. Although the technique specifically focuses on service-dominant business models, addressing the challenges of capturing the strategic intent of each actor represented for the business network (i.e., service ecosystem), the technique does not address the valid design of the service-dominant business model and its associated characteristics, nor does it facilitate users to reflect on the expected performance of the business model design.…”

“…To structure the steps taken to iteratively design the resulting artifact in the design phase of the DSR process, we followed the situational method engineering approach (Ralyté et al, 2003). We have introduced an initial version of this method in Gilsing, Turetken, Ozkan et al (2020), explaining the set of guiding questions that constitute our method. However, this initial version lacked formal evaluation in real business settings and offered limited handholds with regards to its application.…”