Implementing Business Models Into Operations: Impact of Business Model Implementation on Performance

Abstract

Business models (BMs) help firms to translate abstract strategic decisions into their daily operations. Because BMs mediate between strategy and operations, BM innovation involves both high-level strategic experiments and low-level implementation into operations and technologies. However, most existing empirical studies regarding BM innovation focus exclusively on strategic management and marketing theory. This article examines whether the performance implications of BM experimentation are mediated by the time and effort spent on implementing BMs into operating models and enterprise architectures. We adopt an empirical approach, by analyzing the results of a large-scale, representative survey among European small and medium-sized enterprises (SMEs). In line with the existing literature, the research confirms that spending time and effort experimenting with new BMs has a positive impact on the firm performance. An important new finding is that impact is in part mediated by BM implementation (i.e., translating new BMs into operating models and enterprise architectures). This article provides empirical support for the argument that BM innovation is not just a matter of strategic thinking and experimenting with BM components and BM architecture, but that is also involve aligning BMs to operations and enterprise architectures. Our findings call for future research into the process of BM innovation from a business modeling, an enterprise architecting and engineering management perspective, with a focus on information exchange, business processes, and supporting IT applications and infrastructure.