Innovating Managed Services Business Models

Abstract

Objective: Business Model Innovation approaches in service business model context are not adequately studied in the extant literature and there is a clear need for extension of different business model typologies for innovating service business models. Principal aim of this study is to explore how service business model archetypes can be explained as a business model representation such as Business Model Canvas, particularly what the term managed services really mean. Also, it is intended to add clarity to current business model innovation approaches in providing managed services, especially business process services in a service value chain. This will prompt further research to address related implications of networked business model setup and information technology as an enabler in managed services context. Methods/Statistical Analysis: Established framework of Business Model Canvas from extant literature and recent trends in business model representations that cover digitally enabled service business models are compared and contrasted. In line with service dominant logic, approaches for management and optimization of key resources and key activities are used as basis of stacking up different service business model archetypes. Service value chain and network business model implications are emphasized for further differentiating the innovation approaches in managed services business models. Findings: Among various business model design tools and representations, service business models can be better represented as a business model canvas with special emphasis on how key resources and key activities are managed and optimized in a service value chain. Digital enablement with the use of IT and/or cloud infrastructure shall act as accelerators for effective business model innovation in service context. Service business models shall be categorized as a stack of service offerings such as outsourced services, resource outsourcing, professional services, BPO/ITeS, managed services and Business Process As A service (BPaaS). services currently mean to only manage IT services but there is new paradigm of Managed Business Services which is emerging. Applications/Improvements: Suggested findings of this paper and the identification of broad types of service offerings, which clearly differentiate managed services from other service models, can be applied in practice. This approach shall bring in more consensuses about understanding of managed services business models among practitioners and researchers.