e3-value: A New Breed of Management Software to Model Business Networks

My good colleague from the Netherlands, Professor Jaap Gordijn, has just set up a new website for his modeling software and approach called e3-value. The tool allows you to graphically model business networks (or business ecosystems) and automatically generate revenue/profit calculations for each actor involved. From the website:

The e3value methodology helps you to explore your innovative e-business idea - starting from understanding which enterprises and actors are actually involved, to an assessment of profitability for each enterprise.

I think these types of tools are really a step forward in the paradigm shift towards software-assisted business creativity, business modeling and business innovation. In an earlier post on Computer Aided Design (CAD) in business thinking I argued that software based tools could bring a similar boost to business thinking as CAD has brought to the fields of architecture and engineering. Just like in the technical fields such software would not replace the human creativity and ability to understand, but assist humans and allow them to do certain tasks more efficiently and enable them to do new things.

For example, Jaap Gordijn's e3-value tool allows you to do the follwing things:

  • Draw, model and represent business value networks graphically;
  • Easily share these drawings among decision makers to foster discussion;
  • Rapidly re-draw specific elements of the value network based on the discussions;
  • Make several different business prototypes, i.e. model different possible value networks;
  • Automatically generate the revenue & profitability for each business prototype and test different assumptions;

I have used the e3-value tool at several different occasions. For me it has worked quite well. However, there is still no detailed handbook going with it, which can make some modeling tasks a bit more cumbersome. Particularly, when you aim at generating revenue/profitability sheets I would have appreciated a tiny little bit of hand-holding... But there is no question: this tool represents a great leap forward from good concepts on value networks, such as in Weill & Vitale's book "Place to Space" and Tapscott, Ticoll & Lowy's "Digital Capital". With a software based tool like e3-value we can really start doing things like prototyping, iterative designing and (profitability) testing in ways that were not really possible with MS Word, MS Visio and MS Excel...

The next step will be to integrate the e3-value tool with an approach that allows to model the business model of an individual company, taking into account things like distribution channels and value propositions. Jaap and I talked about it... but a lack of time and funds never really let us walk down that path...