Service design within the buisness model canvas

I recently participated at the Nordic Service Design Conference in Linköping, Sweden (see the Twitter stream) where the first day was made up of a series of Wenovski unconferences (that eventually turned out to be rather pre-conference workshops, but which was as fine). I chose to attend the workshop on business model innovation where the whole workshop was dedicated to Alexander Osterwalder’s business model canvas.

I’ve been working with that canvas for over 2 years now. There are many documented case studies of using the canvas out there on the web and it gained rapid and growing interest by the business community. There is also growing evidence that the canvas works really well and using it allows for rapid but very accurate business modeling and it seems to be exactly the right way of doing in the context of changing markets and customer empowerment.

A business model is defined as describing the rationale of how an organization creates, delivers and captures value. Compared to more traditional business model frameworks, Osterwalder’s business model canvas puts a 360° bird’s eye view on your business, by identifying and describing multi dimensional relationships and value networks. The Service Design approach and the business model canvas are very similar in their spirit, and Service Design methods can be considered as the most appropriate way to fill the more strategic and upper level canvas insights with life (in a service-dominant logic).

By the way, in his highly recommendable and nicely designed & crowdfinanced book ‘Business Model Generation‘, Alexander Osterwalder dedicates an entire chapter on Design Thinking as the proposed tool & mindset for designing business models, the same tool & mindset that also serves as Service Design’s meta framework. The book is selling pretty well on Amazon, which is another indicator of the interest and acceptance of the canvas by the business community. The importance of the canvas’s concept is also illustrated by the emergence of other varations such as “The Enterprise Canvas” described in the book ‘Mapping the enterprise: modelling the enterprise as services with the Enterprise Canvas’ by Tom Graves and ‘The Startup Canvas‘.

In a recent interview Alexander gave at Idea Connection he gives us a comprehensive insight on how the canvas was developed and for what purposes. Some Business Models developed with the business model canvas can be found at http://www.businessmodelalchemist.com as well as on an associate website which is also an online tool to design a business model:  http://bmdesigner.com.

Business model canvas

If you put a closer look at the canvas, it is quite obvious that the 4 building blocks value proposition, relationship management, distribution channels and client segments are the core activities that Service Design tries to find an evidenced, desirable and concrete answer to. They form the major part of a service experience’s touchpoints together with the actual service proposition (usually resulting from a service design research process).

During the workshop at the conference, it became even more clear to me how these models are linked, with the business model canvas adding the often missed financial layers in pure service design approaches by incorporating revenue and cost structures as well as partnerships and relationships with stakeholders other than clients. The canvas also illustrates the business logic as a whole with Service Design being an evidenced part of that logic.

Another recent interesting blogpost “How to elaborate a Business Model with Enterprise Architecture?” explores the relationships between the canvas and enterprise architecture as obviously enterprise architecture is the IT system translation or mirror of a business model.

On top of that, I am starting to explore how the business model canvas, service design and service-dominant logic approaches can be incorporated into performance management, balanced scorecards and strategy maps, by identifying the Key Performance Indicators of successful companies and public services within changing markets, in our quest for constantly refining the new “wiki” microeconomic models of the 21st century. More to come….

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