Data-driven business models: a holistic development framework for industrial companies

Abstract

Novel technological possibilities in the gathering and analysis of data open up unprecedentedways to monitor and influence how physical goods are created, distributed, and used. Withthat, new opportunities and threats ensue for industrial companies. While there are somewell-known examples of producing companies that incorporate data-driven business models(DDBMs), one kind of them seems to face especially challenging circumstances: producers ofcomplementary goods. They are significantly dependent on other producers, systemintegrators, and channel partners which needs to be accordingly considered in any businessmodel innovation.Existing literature and practices are sparse on the prescription of business model designprinciples and procedures that relate to these circumstances. Following, a developmentframework for data-driven business models that takes the complementary producerssituations specifically into account is devised. It is shown, that business models can beregarded as information systems (IS) as they comprise IS constructs that illustrateabstractions and representations of the junction of technology, people, and organisation.With this association, information system design theory (ISDT) is used to prescribe a designstructure and procedure decision-makers can use to explore and describe ecosystemempowered, data-driven business models: the DDBM Radar.The framework and its key components of the data-driven value proposition, the operatingmodel and the financial model are explained in detail. The frameworks practical usability isillustrated through the description of current real-world cases in the proposed structure.Further, its efficacy and utility for the practical application are demonstrated empirically.