Mastering Business Analysis Podcast: The Value of Business Models

07 September

In this episode of the Mastering Business Analysis podcast, David Mantica explores what business models are and how they can helps us find new opportunities to create greater value.

Click to listen to the podcast.


Show notes

Creating product requirements and delivering features is one thing. Understanding the business context and business models associated with your product and identifying different avenues to drive value is quite another.

Understanding your business model can help drive value for your organisation and increase the value that you contribute as a business analyst, product owner, or project manager.

A business model incorporates how you package a product, how you sell it, how you market it, how you deliver it, and how you get paid for it.  The packaging refers to the offer itself, not the box it comes in.

Your business model gives you insight into how you extract money or time from somebody for the product and understand the expense necessary that actually deliver it and the margins associated with it.  You then tie in how you fit in the value chain of your organisation and where you fit from a competitive standpoint.


Business Models for Internal Products

The first thing we have to remember with internal products is that revenue is considered with use and adoption of the product. Instead of revenue being much somebody paid for something, your internal customers pay for what you build based on their time; if they’re using it more, they’re paying a lot of money for it.  Once you understand the use, you could tie value back to productivity.

We need to consider that there are different ways that you can deliver; all the different ways you can sell, all the different ways that you could generate revenue, ways that people engage with your product are different.  You can commoditise the same solution but within two different business models and get two totally different results.  You can understand the business model from an internal perspective by digging into how you deliver something.

How do you package that delivery?  What’s the value proposition?  What’s the internal marketing associated with it?  How you judge success?


Increasing Value

To validate the value of a product, service, or feature, we don’t just need to test ideas. We also have to test how the idea is delivered, the information that is given, and how we monetise its use.

As Business Analysts, we’re a lynchpin between what can happen and who uses it. We have to start influencing the groups in the middle that deliver elements of the product to help them see the fact that their scale and repeat model is in need of an adjustment or needs to be replaced by something else.

By serving as internal management consultants, we can work to understand the changes in the business model and educate people on potential failures and view the business model together to enhance the product value.

One of the failures could be how we support someone when they have a problem or not delivering the service appropriately.  Perhaps it’s the wrong platform.  Perhaps there’s an external impact based on use that we have to incorporate because all of our customers are using a different software system, and they have different experiences.

Understanding how business models change due to a digital transformation is critically important. Looking at options associated with the business model may help you to see different options.  Perhaps you can license the product. You can sell the software, sell the data, or provide information online.

Understanding the concept of how a digital transformation starts to impact some of these production environments that we’ve been working on for quite some time is a good educational step to start getting yourself a better understanding of what may occur and then also being able to truly understand the market.

Thank you!

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