Alexander Osterwalder

4 – An ontology for e-Business models

Business models have become more complex with the emergence of new and affordable information and communication technologies (ICTs). Companies increasingly act in networks and offer complex value proposition through a multitude of distribution channels. For managers it is ever harder to keep track of how their companies really work and how and where exactly the money is made. Of course every manager and entrepreneur does have an intuitive understanding of how his business works and how value is created. In other words he does have an intuitive understanding of the company’s business model, but even though this business model influences all important decisions, in many cases she or he is rarely able to communicate it in a clear and simple way (Linder and Cantrell 2000). And how can one decide on a particular business issue or change it, if it is not clearly understood by the parties involved? In this chapter we will try to tackle the business model issue and construct and outline the sketch of an ontology (rigorous framework) for e-business models based on an extensive literature review. We aim at showing how the fusion of the ideas in business model literature and the ideas of enterprise ontologies creates an appropriate basis for the development of a range of new management tools in the e-business domain. By merging the conceptually rich business model approach with the more rigorous ontological approach and by applying them to e-business, we achieve an appropriate foundation for tools that would allow the understanding, sharing and communication, change, measuring and simulation of e-business models. In the next section we give an overview of related work. As shown by Linder (Linder and Cantrell 2000), most people speak about business models when they really only mean parts of a business model. We think that the existing business model literature essentially attacks one, two or rarely all of the following three elements, which make up a business model: revenue and product aspects, business actor and network aspects and finally, marketing specific aspects. We propose an e-business model ontology that highlights the relevant e-business issues and elements that firms have to think of, in order to operate successfully in the Internet era. An ontology is nothing else than a rigorously defined framework that provides a shared and common understanding of a domain that can be communicated between people and heterogeneous and widely spread application systems (Fensel 2001). We suggest adopting a framework which emphasizes on the following issues that a business model has to address: - [Product innovation] What business the company is in, the product innovation and the value proposition offered to the market? - [Customer relationship] Who the companys target customers are, how it delivers them the products and services, and how it builds a strong relationships with them? - [Infrastructure management] How the company efficiently performs infrastructure or logistics issues, with whom, and as what kind of virtual enterprise? and finally,

Understanding ICT-based business models in developing countries

It is an essential issue to show how small- and medium-sized enterprises (SMEs) and micro enterprises in developing countries can profit from the opportunities presented through the use of information and communication technologies ICTs. This fosters development and helps narrowing the digital divide. The paper presents a business model framework that helps analysing ICT-based business models and illustrates it through the Village Phone Program of the telecommunication operator Grameen Phone in Bangladesh. Furthermore, the paper proposes a so-called business model handbook to improve knowledge transfer related to ICT-based business models.