The focus of this paper is to evaluate and discuss the enablers as well as challenges that are associated with applying business modelling tools and techniques in context to a real world organization. In this paper, the role of business modelling is presented along with the enablers and challenges for implementing business model innovation within an organization. Business modelling techniques are those tools used for analysing the business processes and mitigating the existing issues to gain business benefits.
The main aim of implementing business modelling tools and techniques in an organization is to enhance the existing business processes (Agostinho et al. 2016). Some of the business modelling techniques are Business Process Modelling Notation (BPMN), UML Diagrams, Flowcharts, Data Flow Diagrams (DFD’s), Functional Flow Blow diagrams and more. Business process modelling provides major benefits to the organization by aligning operations with their business strategy. Despite of various benefits, there are also some major challenges of implementing such tools and techniques that restrict the adoption of business modelling in organizations. Hence, a critical analysis and evaluation is carried out in this paper to demonstrate that major enablers and challenges of implementing such innovation in an organization.
Enablers of the application of the techniques: There are various enablers that help in applying business modelling tools and techniques within an organization such that it supports innovation. Some of the enablers related to implementing business modelling tools and techniques are organizational design, leadership, strategic review, collaboration, real time decision making and adequate resources.
Organizational design plays an important role in driving innovations within an organization which should be considered prior to applying business modelling tools and techniques. It is considered as an enabler for allowing challenges associated with traditional ideas existing in an organization (Epstein 2018). The organizational design and culture is essential for promoting the thinking of innovation in an organization and especially for improvement of their business model. Hence, it is important that a proper organizational structure should be developed along with establishing the organizational culture for innovation and recruitment of suitable people for supporting goals of the organization.
Leadership is considered as a critical enabler of business model innovation and there is a top down approach required for driving the transformation. The leaders of the organization should actively participate and be involved at every step in the business model change process (Lewandowski 2016). The management team has an essential role to play in driving innovation throughout the entire organization. The knowledge of leaders in the firm is also an important factor for driving innovations in the existing business model of an organization.
Strategic review is another aspect that enables application of business modelling tools and techniques in an organization by reviewing ability of the firms. The review of the organizational strategies should be carried out on a constant basis to ensure survival as well as sustainability of the organization (Foss and Saebi 2017). It has been found that the design of business models has to be done with some sort of flexibility to ensure that strategic review can be performed in the organization.
Collaboration is another essential enabler of business model innovation that relates to relationship between external parties along with internally between the teams and different departments within an organization (Bocken and Short 2016). It is a major factor as without collaboration or proper association between the various stakeholders related to the organization, success of business model innovation cannot be ensured. It is considered as a strength for applying holistic business model innovation within the organization.
Decision making in real time is also enabler as sometimes a quick response has to be given for an event that may occur within the organization. The real time decision making is considered as a decentralised model of management (Andreassen et al. 2018). In this process, the managers are able to make any decisions without following proper decisions as it is a time consuming process and this strategy leads to more strategic thinking. It also enables the organization to quickly respond to events that require attention.
Availability of resources is another enabler as the decision for allocating adequate resources for business model transformation is important. The allocation of resources should be done effectively so that there is no wastage or over allocation issues while applying the business modelling tools and techniques in business of an organization (Aversa et al. 2015). Hence, it is important that adequate resources should be dedicated for enabling business model innovation.
Challenges associated with the application of the techniques: There are various challenges related to applying business modelling tools and techniques within an organization. Some of the challenges related to implementing business modelling tools and techniques are resistance to change, misalignment of company and market structures, complexity in innovation, long lead time for implementation, improper allocation of resources and lack of customer centricity.
Resistance to change is one of the major challenges for the business process modelling technique applied in the business by various organizations. Various organization are generally accustomed to the flow of events within the organization. All the staffs and the members of the organizations who are involved in the business are also used to the process and would take up a lot of time to get used to the newer procedures implemented by the organizations (Ricciardi, Zardini and Rossignoli 2016). In addition to this, the process involves training of the employees for the changes taking place in the organization takes up a lot of time and hence, this is a challenge which is to overcome by the organization with top priority.
Misalignment of company and market structures are another challenge for the organizations for adopting the business model innovations. It is to be noted many organizations think of the market structures as the main inhibitor for the business regulations. The market structure results in to aspects of established supply chains, regulation or the other procedures. Additionally, all the aspects are generally directed towards the traditional business models (Lehoux et al. 2014). Hence the organizations are very often afraid of the changes which might misalign the company from the market and hence the changes should take place only within the organization after the full knowledge on the market is gained.
Complexity in innovation have also be identified as one of the major challenges of the business innovation procedures, as because the business models are generally associated with the integration of various type of processes within the organization and components of the organization. The process generally requires a deep technical knowledge before being executed (Mageswari, Sivasubramanian and Dath 2015). There are other challenges such as inadequate resources that affect the complexities of the businesses. The lack of resources might hamper the growth of the organization after the transformation process is over. When compared to other competitors of the organizations the challenge creates quite a huge difference.
Long lead time for implementation is challenge that not many organizations face however this cannot be neglected by any stretch of imagination for the organization and hence, this business model innovation would be requiring addressing this issue (Battistella et al. 2017). The main challenge lies in the interconnected network possessed in the business of several organizations and hence, the organization take up a lot of time to get accustomed to the innovative processes which have been implemented in the business of the organizations, there are various cases where the organizations have taken up a number of years to formulate a new model for the business conducted by them.
Improper allocation of resources is a challenge faced by several organizations who are trying to adopt the business model innovation technique. The difficulty in balancing the resources for the business is an inherent one (Gassmann, Frankenberger and Csik 2014). Balancing the resources is very important process both for the innovation process and the future of the business of the organization, failing to do which would have an adverse effect on the organization and the future business models for the organizations.
Lack of customer centricity is the last challenge that the organizations would like to face and the impact of the challenge is so severe on the organizations that they would totally fail in their business to the extent of becoming bankrupt (Epstein 2018). The main issues is that many of the organizations do not have their business models built around the customers and hence, the resistance to innovate the business as there were not much of a value proposition for the changes.
Mitigating actions: The challenges associated with application of business modelling techniques can be mitigated with the help of proper policies and possible action plans. Some of the mitigation strategies are presented in the below section.
The view and opinion of employees regarding changes in the organization will be acquired through proper feedback procedures so that the reason behind resistance to the changes could be identified. The concerns for the resistance will be solved with proper handling and mitigating the issues arising due to implementation of changes in the organization.
The goals of the organization have to be stated clearly and conveyed to the concerned stakeholders regarding implementation of business modelling techniques. The goals of the organization will present the purpose behind application of business modelling techniques so that it becomes clear to the stakeholders associated with the organization.
Strategic alignment have to be considered prior to application of business modelling technique as it refers to linking of the organizational objectives with the process management. The application of the business modelling technique should be aligned with the present strategy and the activities related to process management.
Conclusion
From the overall analysis and discussions carried out in this paper, it can concluded that determining the reasons behind application of business modelling tools and techniques will help to better understand the view of firms on business model innovation. The evaluation of the reasons will help to identify the requirements of the organization that should be fulfilled by business model innovation. Further, it has been identified that the design of an organization that is able to promote innovative culture will also promote business model innovation capability.
The implementation of business modelling tools and techniques for business model innovation could be used if there is proper organizational design. Leadership is also an essential factor that plays important role in driving business model innovation. The decision of the management in an organization shows whether business modelling tools and techniques could be applied for innovation in their business. However, there are some cases where the adoption of business model innovation may face difficulty in organization is resistance to the change by employees. Hence, there is a need for proper identification and management of risks while applying business modelling tools and techniques in an organization
References
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