Business Models for Silent Processes Prof. Hubert Österle Trends in e-Commerce, Public Lecture in Business Informatics Vienna, January 14 th, 2008

2 Business Model Innovation Trends in Business Models Paradigm Shift Trends in Business Models Silent Processes

3 Apple‘s iPod is Successful Because of the Business Model  Audio player iPod  Large number of songs offered thanks to contracts with producers and music labels  Prices per song  Worldwide  Copy protection / digital rights management  Multi-channel distribution for audio players  Silent consumer process

4 Schiesser: Underware Specialist for Well-Known Labels CZSKBG Lieferanten Design Purchase Production Stock- keeping Distribution Logistics Procurement Logistics „One day, we want to make money with every single piece of clothes sold in Europe - somewhere in the value chain.” Winfried Daltrop, CEO Schiesser AG

5 Luenthai: From Clothes Manufacturer to an Integrator for the Value Chain Company profile  Revenue: 0,8 bill. USD  Employees:  Products: Textiles for fashion brands (80% external brands) Customers (Brands) Other Suppliers Production Design Logistics Outsourced Manufacturing Procurement Logistics Design “Luenthai is not a clothing manufacturer anymore, but a clothing supply chain service provider.“ Chen Zulong, Vice President

6 Endress+Hauser: From Measuring Instruments to Measuring Solutions Configuration and Purchase Operations Disposal / Replacement Installation Customer Specification Maintenance Endress+Hauser Automation Solutions Endress+Hauser Homepage Applicator eShop eCatalog Order Status 370,000 downloads / year Download Area Spare Finder Tool Installed Base Analyst 2,5 mill. equipment records Common Equipment Record Field Care

7 Business Models: From Products to Solutions Product Value Customer Value Amount of explosives „Broken rock“ Compressor Compressed air Overall textile service package Individualized portfolio of standard services boco

8 Business Model Innovation Paradigm Shift Trends in Business Models Silent Processes

9 Last 30 Years: Optimization for Business  Enterprise Resource Planning (ERP)  Business Networking  Interfaces (EDI, …)  Portals (Suppliers, Customers, etc.)  Enterprise SOA  … Business Engineering EDI … Electronic Data Interchange, SOA … Service Oriented Architecture

10 Future: Optimization for People ? Silent Processes for Consumers  Sensors & Actuators  Mobility  Content & Community  Requirements Match Wellbeing Engineering

11 Business Model Innovation Paradigm Shift Trends in Business Models Silent Processes

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13 Computer Game Customer-Centric Services Instead of Supplier-Centric Products Example of Independent Living Sleep Monitor Wobble Sensor Intelligent Pillbox GPS-Module  Medication Service  Get-home Service Easy Communicator  Tumble Prevention Intelligent Pillbox  Fitness Service Wobble Sensor GPS-Module Easy Communicator  Stay-Connected Service Computer Game  Multiplayer Game Club

14 The Ingredients of Silent Processes One-Face-to-the- Customer Anytime Assistive Segment-of-One One-stop Context Sensitive Everything Everywhere

15 The Process of Independent Living must be Silent  Intuitive usage  Machines serving people, rather than people serving machines.  Shift complexity from humans to machines  Assistance instead of control

16 Solutions rather than products Individualization Globalization Realtime Multi-Channel Pricing Models GranularityInnovation Frequency Compliance Collaboration  Bonacasa  Telemedicine in Pharmacies (Medgate) Complexity must shift from Customers to the Ecosystem Complexity  Medgate / Insurances / Pharmacies  Nintendo & Dr. Kawashima  Pay per use insurance  Price reduction for telecare services (e.g. Sanitas)  Individual service bundles  Adaptive home automation  Activating vs. assisting  Detailed health monitoring  Continuous (preventive) care  Health call centre in India  Assistance everywhere  Contact-less sleep monitoring  Mobile X-ray solutions  Telecare business models  Monitoring of vital signs  Emergency calls with escalation mechanisms Phone, video, web- communities, etc. Country-specific regulations

17 Resumé  Business models move from products to individualized solutions.  We need a paradigm shift from business engineering to engineering of wellbeing.  Engineering of wellbeing means – understanding the consumer process – providing solutions instead of products – a holistic assistance integrating all necessary services – shift complexity from the consumer to the ecosystem

18 Contact Hubert Österle Institute of Information Management University of St. Gallen Mueller-Friedberg-Strasse 8 CH-9000 St. Gallen Phone Fax URL: