Yesterday I had a very good discussion with Dietmar Kottmann of the Boston Consulting Group (BCG) about conceptual business models and their use in business thinking. Our conversation ended with an interesting analogy between what Computer-Aided Design (CAD) has brought to engineering and what could be achieved in business by similar tools tailored to business design. But where the heck are those tools today?
Computer-Aided Design (CAD) englobes a whole family of computer-based tools that assist engineers, architects and other design professionals in their design activities. In product development CAD is nowadays used to streamline the whole Product Lifecycle Management (PLM) from conception and collaborative product design to manufacturing, service and disposal. In architecture CAD has helped to rapidly create 3D models and prototypes for visualization and exploration.
In short, CAD has brought speed, rapid prototyping, quicker visualization, integration, better collaboration, simulation and better planning to engineering, architecture and other design areas. It hase helped eliminate cumbersome tasks that had to be done manually (e.g. drawing & redrawing, sharing of blueprints) and opened up a whole new world of opportunities (e.g. rapid visual 3D prototyping & exploration). All this sounds extremely exciting, but the adoption of CAD has taken many years and only recently moved towards collaborative design & PLM.
It seems obvious to me that the improvements that have been achieved in the abovementioned design fields through CAD will soon be replicated in more abstract design areas such as business managment and business strategy. Of course it is more straightforward to build tools that help design concrete objects (e.g. houses & bridges) than to craft tools that will help design abstract concepts (e.g. value propositions & core competencies). However, if we look at the history of modelling and computer aided modelling tools in Information Systems (IS) we can observe a constant move from the relatively detailed and concrete towards more abstract business concepts. The IS field started out with modelling bits & bytes, moved towards data modelling, then systems modelling and got from workflow modelling all the way to process modelling. This is now being done quite well with a large range of useful computer-aided tools.
In my opinion the next step towards computer-aided tools in business will be the facilitation of business model design. It could be observed soon and I call this process Computer Aided Business Design (CABD)... But what would we get out of such tools? The analogy with what today's CAD tools have brought to the fields of architecture, engineering and product design can be quite helpful:
- Speed: Manual work (e.g. drawing) was accelerated by computer-assistance.
- Sharing & Collaboration: CAD programs brought standards that could be shared across developer groups inside and outside organizations.
- Prototyping: CAD has not only brought increased speed but allowed to easily create various versions and completely different sets of prototypes.
- Visualization: In architecture CAD has allowed architects and their customers to virtually walk through a prototype of a building and get a better feel of the potential end-product.
- Integration: In car- and airplane manufacturing CAD has allowed different divisions and collaborating companies (e.g. design, suppliers, etc.) to integrate their processes of conceiving and manufacturing a particular product.
- Product Lifecycle Management (PLM): CAD has made it possible to manage the integrated process from conception over design to manufacturing and disposal.
- Simulation: With CAD it become possible to simulate certain aspects of a model (e.g. if a bridge won't collapse).
Based on the above we can extrapolate for the field of business design and particularly for business model design that Computer Aided Business Design (CABD) will bring:
- Speed: we will move from "handwritten" business model design to models crafted rapidly with the help of software tools. Standardization of some tasks will improve the speed and quality of designing. Changes of an existing model can easily be achieved.
- Sharing & Collaboration: software typically standardizes some aspects of the design process while it leaves space for creativity. CABD will bring a standardized format to business model design that will become exchangeable among different people and groups.
- Prototyping: CABD will allow groups to rapidly develop different versions and sets of prototype business models based on their ideas.
- Visualization: CABD could help make abstract concepts more visual and understandable. In a business model the links between the different building blocks would become more apparent. Maybe it would even become possible to navigate through a business model protype, for example, by exploring which customer segments a particular value proposition addresses and through which distribution channels it is delivered.
- Integration: CABD will allow people from different areas (e.g. strategic planning, process design, IS) work together around one common model.
- Business Model Lifecycle Management (BMLM): CABD will make it possible to easily move from conception towards implementation and steering by allowing the definition of indicators for balanced scorecards.
- Simulation: With CABD it will become possible to simulate certain aspects of the model (e.g. if under a given scenario the revenue streams will cover the cost structure).
Let's see how long it will take for such tools to appear. Some first successful attempts to provide computer aided design for some aspects of business design have already been made by some of my Dutch colleages (e3-value). Is there anybody out there who would want to give me the funds to make a Computer Aided Business Design (CABD) tool for business models happen?