Business Model Scenarios for Remote Management

By Braet, Olivier; Ballon, Pieter | Journal of Theoretical and Applied Electronic Commerce Research, December 2007 | Go to article overview

Business Model Scenarios for Remote Management


Braet, Olivier, Ballon, Pieter, Journal of Theoretical and Applied Electronic Commerce Research


Abstract

This article critically appraises business model challenges in implementing remote management functionalities. Remote management is believed to create new service opportunities and foster convergence between previously dissociated islands of end user devices. Conflicting business logics from disparate industries, however, run counter to this attempt at centralization. We introduce a generic business modeling methodology that aims to move beyond traditional ICT investment appraisal techniques by combining four critical dimensions of design. We develop four business model scenarios based on the organizational design choice of 'degree of vertical integration' and the product design choices of 'degree of product modularity' and 'distribution of intelligence' and offer a description of the effect of these design choices on the intended customer value.

Key words: Business Modeling, Business Scenarios, Remote Management, Product Modularity, Vertical Integration

1 Introduction

1.1 The Problem

Our research problem originated from considering the architectural premise that several technical islands of user devices (for example, the television set, the personal computer, or even the electricity meter) could generate a variety of remotely managed services such as video-on-demand, music-on-demand, personal video recorder (PVR), or remote metering, and thus could be remotely managed. Providing these services would require implementing a remote service platform (or autoconfiguration server) that performs functions such as service quality control, punctuality and integrity, or installs entirely new functionalities. As an increasing number of electronic devices are being remotely managed through a variety of techniques, it is clear that the introduction of remote device management is primarily a technology driven evolution. This article focuses on the business model aspects of implementing forms of remote management.

Remote home device management is believed to reduce complexity and cost for users, operators and/or service providers. The goal is to relieve end users of the burden of having to personally (re)configure these devices. In the field of ICT, associations and interactions between different business actors distinctly show an evolution from vertically organized offerings (consumer electronics, telecom industry or mass media style) to more hybrid, modular solutions (information technology style) [4], [12], [13]. As the technical silos of end user devices are breaking down, industrial actors are moving from closed loop installations models to customer driven service models. Consequently, the proposed business model scenarios offer a continuum, in which business models vary from closed loop models to customer driven and on demand models. Colleen [2] defines an on demand business as "an enterprise whose business processes, integrated end-to-end across the company and with key partners, suppliers and customers, can respond with speed to virtually any customer demand, organizational requirement, market opportunity or external threat". The on-demand business model allows for a more focused, responsive, variable and resilient response to sudden changes in demand.

The question at hand is the following: which industry actors will perform this remote management function, and for what reasons will they do so? Within the scope of this article, we are only concerned with making explicit business models that are relevant for remotely managed end user support services using a home gateway, where a separate remote management layer supports service quality, performance and delivery. The contribution of this paper may reside in a broadening of the investment appraisal techniques currently employed in ICT investment research. Most IT/IS evaluation research is situated at the intra-company level, focusing on how a technology will add to the bottom line. We concur that, during the introduction of a cross-industry technology, most IT/IS evaluation methodologies focus on the project management level, as exemplified by [21]. …

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