What’s in an Electronic Business Model?

Abstract

An electronic business model is an important baseline for the development of e-commerce system applications. Essentially, it provides the design rationale for e-commerce systems from the business point of view. However, how an e-business model must be defined and specified is a largely open issue. Business decision makers tend to use the notion in a highly informal way, and usually there is a big gap between the business view and that of IT developers. Nevertheless, we show that conceptual modelling techniques from IT provide very useful tools for precisely pinning down what e-business models actually are, as well as for their structured specification. We therefore present a (lightweight) ontology of what should be in an e-business model. The key idea we propose and develop is that an e-business model ontology centers around the core concept of value, and expresses how value is created, interpreted and exchanged within a multi-party stakeholder network. Our e-business model ontology is part of a wider methodology for e-business modelling, called e3 -value, that is currently under development. It is based on a variety of industrial applications we are involved in, and it is illustrated by discussing a free Internet access service as an example.