This presentation reports on a proposal to view business model innovation as a process that was recently presented at the Australasian Conference on Information Systems

1. Business model innovation: a
temporal perspectives
Niamh O Riordan University College Dublin, Ireland
Philip O’Reilly University College Cork, Ireland
Aidan Duane Waterford Institute of Technology, Ireland
Pavel Andreev University of Ottawa, Canada

2. Agenda
1. Motivation
2. Definitions
3. Research gap
4. The business model innovation process
5. Discussion and future directions

3. 1. Motivation
• The same idea or technology taken to market through two
different business models can actually yield two different
economic outcomes depending on the business model being
used (Chesbrough, 2010)
• A well-formulated and innovative business model can be used
to help your company gain competitive advantages that result
in higher profits than competitors (Afuah and Tucci, 2001)
• Legendary firms that shape their industry structures are in fact
business-model innovators (Gambardella and McGahan, 2010)
• More and more companies are re-evaluating their business
models on an on-going basis, taking a transformational
approach bringing about innovation within the organization
itself (Demil and Lecocq, 2010).

4. 2. Definitions
• There is a lot of ambiguity about the concept of a business model:
– an approach to generating revenue at a reasonable cost that is based on
assumptions about what customers want and how they want it, and on
how the enterprise can best meet those needs, and get paid for doing so”
(Teece, 2010)
– “a conceptual tool that contains a set of elements and their relationships
and allows expressing the business logic of a specific firm. It is a
description of the value a company offers to one or several segments of
customers and of the architecture of the firm and its network of partners
for creating, marketing, and delivering this value and relationship capital, to
generate profitable and sustainable revenue streams” (Osterwalder, 2005)
– as a system of interconnected and interdependent activities that
determines the way the company “does business” with its customers,
partners and vendors (Amit and Zott, 2012)

5. 3. Research Gap
• Managers struggle to understand the potential value of a new
business model (Bouchikhi and Kimberly, 2003; Chesbrough, 2010) and
companies struggle to innovate the business models through which
commercialisable new ideas and technologies will pass (Chesbrough,
2010)
• But the literature is skewed toward product and process innovation
(O Riordan, 2011) rather than business model innovation (Crossan and
Apaydin, 2010). The business model literature itself focuses on defining
(Timmers 1999; Osterwalder et al., 2005) or visualising (Osterwalder and Pigneur,
2010) business models
• These tools have explanatory powers, particularly when used
retrospectively but they overlook the temporal dynamics of the
business model innovation process itself don’t provide a useful
process map for organizations wishing to engage in business model
innovation (O Riordan et al., 2013; O Riordan et al., 2012; O Reilly et al., 2014).

6. 4. The business model innovation process

7. Ideation
• Focuses on the identification of potential value
activities pertaining to the delivery of the
company’s products and services
– Novel activities
– Novel combinations of activities
– Novel allocations of activities amongst parties
• Opportunities for business model innovation are
greatest during this phase so tools and
techniques are proposed to stimulate ideation

8. Evaluation
• Focuses on evaluating each individual proposal on
its own merits, taking into account its
appropriateness for the focal firm in terms of its
– organisational knowledge
– organisational capacity
– organisational network
• A number of approaches can be used:
– Visualisation
– Experimentation
– Systematic analysis

9. Prioritisation
• Once business model proposals have been
evaluated individually, a comparative assessment
of viable proposals should be conducted in order
to enable the focal firm to prioritise its efforts
• As this comparative assessment should be based
on multiple criteria, a weighted decision matrix
may be useful

10. 5. Discussion and future directions
• This research highlights the need for a more temporal view
of the business model innovation process and proposes a
three phase innovation process framework that is amenable
to IS support
• Future industry-based research is needed to test and refine
this process model

11. THANK YOU
Dr Niamh ‘Neve’ O Riordan
University College Dublin, Ireland.
niamh.oriordan@ucd.ie
www.niamhoriordan.com
ie.linkedin.com/in/niamhoriordan/