Integrating services, universe and everything, part 1

Integrate (verb): to form, coordinate, or blend into a functioning or unified whole

I thought to use this blog for sharing some findings of the SHINE project. SHINE focuses on a specific role in a value network, the role of a service integrator. In the project, we take the viewpoint of an integrator and study how services are developed and produced in networks and what kind of network management and collaboration models facilitate the value co-creation in the network? [And before anyone comments: We use the plural, “services”, since services exist in the case firms and industries]. The findings are compiled from the viewpoint of practical and pragmatic managerial implications and are based on observations in different networks.

Focus on the compatibility and alignment of business models

Business model is a commonly used concept providing a rather practical view on the essence of business: creating and capturing value. Business models can be described as ‘stories that explain how enterprises work’ [1] or ‘the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit’ [2]. Business model is thought to be something that sharpens the competitive edge and aims to make a firm totally unique.  What is the role of an integrator in this picture?

”Integrator is needed to unite the earning logics of different business models” – Juhani Vanhala, Business Line Director, Centralized & Professional Services at Empower Oy)

Generating a documented business model for a product, service or solution is a good way to bring up the different components of the model for discussion and testing. At a company level it supports the building of an identity: the model increases the internal understanding of the reason for the company’s existence. Discussion only inside a company is not sufficient, though: A business model is tightly interlinked with the operations of other companies and the constantly changing network. The compatibility and interfaces of a business model with the surrounding network largely determines how the model assists in the value generation and the achievement of the desired benefits. The integrator plays an important role in integrating the business models and the resulting different earning logics of the individual companies of the network.

References

[1] Magretta, J. (2002) Why Business Models Matter. Harvard Business Review, Vol. 80, No. 5, pp. 86–92

[2] Teece, D.J. (2010) Business Models, Business Strategy and Innovation  Long Range Planning  Vol 43, No. 2-3, pp. 172-194

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