Academic journal article Business Case Journal

Scaling Up a Small Technology Firm: Business Model Innovation at HaylioMed

Academic journal article Business Case Journal

Scaling Up a Small Technology Firm: Business Model Innovation at HaylioMed

Article excerpt

Mike Kramer, the CEO of HaylioMed, had led his small technology firm for over a decade. With its complex enterprise software solution and range of professional services, HaylioMed was one of the two leading companies in 2014 which successfully served a group of prestigious specialty medical schools and teaching hospitals. Mike had developed a successful business, but due to the limited size of his specialty market niche, he had come to realize that healthy growth could no longer be sustainable with the same business model. Mike's small firm was standing at the edge of a momentous decision: should it maintain the current evolution of its business model and forfeit scaling, or to transform its customer value proposition, resources, and capabilities in search of higher returns? Mike wondered what realistic options were available to him and if the risk of business model innovation was worth the reward.

Introduction

HaylioMed's customer value proposition was to provide highly customized Enterprise Software Solution (ESS) to the most prestigious firms within their market. By 2014, HaylioMed had clients in all five continents: Europe, North America, South America, Australia and Asia. Customisation came at a high cost regarding the time needed to identify and meet the needs of each client and the associated resources and capabilities required to provide a bespoke solution.

The HaylioMed product solved complex problems that many of the mid and lower tier players in the market did not face, or where they did, they could not afford the cost of customization. As CEO and leader of his small firm, Mike faced difficult questions: should he to concentrate on this small, but highly profitable, niche market and face limited future growth, or should he expand beyond this niche. If he was going to expand, he faced a series of choices. None of these options appeared to have obvious solutions for growth and profitability, and each faced uncertainties in terms of technological, managerial and market risks.

At the heart of his problem was if and how he ought to expand beyond his core market of prestigious specialty medical schools. What were the real needs of firms beyond the top-tier market? Did competitors already serve these? How would he explore this wider market with a staff of 25 and limited managerial bandwidth, while still meeting the demanding needs of his current client base? Would it be possible for Mike to simultaneously meet the needs of the current top-tier clients, while developing cost effective solutions for the mid and lower tiers Would his current market be unwilling to be associated with the mid and lower market tiers?

HaylioMed's Core Business Offering

Mike and his team had gone through a lengthy and at times difficult process to closely configure the HaylioMed's resources and competencies with the needs and demand of its clients. These clients were considered to be the most prestigious medical schools or hospitals in the local market. As early adopters of technological solutions, the specialty schools and hospitals used a technological edge to focus less on administration and more on the higher value adding aspects of their business, thus maintaining market leadership positions.

In essence, the clients used HaylioMed's technology to support their teaching, learning and research activities. HaylioMed's flagship product 'Medi-Wix' served an important operational function as it allowed clients to record and interlink all aspects of clinical procedure, student management, patient administration, financial management and reporting within their medical education niche. HaylioMed's strategy was to get close to the customer, overtime understanding its culture, practices and priorities and to then customize 'Medi-Mix' to provide an end-to-end record management solution for its clients. However, the firm's value proposition also included comprehensive consultancy and support services. …

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