Presentation for the IEEE Conference on Business Informatics (CBI), Paris, 30. Aug 2016

1. 1 Karlsruhe Service Research Institute
www.ksri.kit.edu
KSRI – Karlsruhe Service Research Institute
www.kit.eduKIT – The Research University in the Helmhotz Association
Patterns of Data-Infused Business Model Innovation
@ IEEE Conference on Business Informatics (CBI), Paris, 2016
Ronny Schüritz, Prof. Dr. Gerhard Satzger
Karlsruhe Service Research Institute (KSRI), Karlsruhe Institute of Technology (KIT)

2. 2 Karlsruhe Service Research Institute
www.ksri.kit.edu
There is a growing amount of data and a lack of research in the
area of data-driven business models
Out of over 600 Chief Operating Officers,
32% have already adopted
advanced analytics and modelling
tools
63% plan to invest in it within the
next 2-5 years
The academic focus has been largely on
technical questions round the collection,
storage and mining of big data.
Estimate of worldwide data by 2020
0
10000
20000
30000
40000
2005 2010 2012 2015 2020
Datavolume in exabyte
Source:
V. Turner, J. Gantz, D. Reinsel, and S. Minton, “The digital universe of opportunities: Rich data and the increasing value of the internet of things.” IDC, 2014.
IBM, “Redefining Ecosystems,” Somers, NY, 2016.
L. Kart, N. Heudecker, and F. Buytendijk, “Survey Analysis : Big Data Adoption in 2013 Shows Substance Behind the Hype.” Gartner, 2013.
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

3. 3 Karlsruhe Service Research Institute
www.ksri.kit.edu
It is often claimed that data and analytics bring to bear entirely
new “data-based” or “data-driven” business models
Hartmann et al. (2014) analyzed a series of start-ups and categorized them
Chen et al. (2011) illustrates two kinds of service oriented paradigm: Data-as-a-
Service (DaaS) and Analytics-as-a-Service (AaaS
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation
Source:
P. M. Hartmann, M. Zaki, N. Feldmann, and P. A. Neely, “Big Data for Big Business? A Taxonomy of Data-Driven Business Models Used by Start-Up Firms,” 2014.
Y. Chen, J. Kreulen, M. Campbell, and C. Abrams, “Analytics ecosystem transformation: A force for business model innovation,” Proc. - 2011 Annu. SRII Glob. Conf. SRII 2011, pp. 11–20, 2011.

4. 4 Karlsruhe Service Research Institute
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Taking a simple model we evalute how the business model of
incumbents is impacted by data and analytics
Value
Proposition
Value
Creation
Value
Capturing
Based on a conceptual analysis and an evaluation of 115 business models
How does the exploitation of data with analytics
affect the business model of an incumbent?
What can be offered
to other parties?
How are resources orchestrated
to deliver a defined value
proposition?
How is the value proposition
turned into (monetary)
remuneration for the company?
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

5. 5 Karlsruhe Service Research Institute
www.ksri.kit.edu
§ EXAMPLE: Saarstahl
§ suffered form a scrape rate of ~32% of the produced steel which is detected
after production process
§ now a network of sensors is used to analyze the material during production
§ analysis of data enables the recognition of defect in material in real-time
Pattern 1: Data-infused value creation
§ Data and analytics are used to optimize the
way the company operates and creates value
§ Aims at higher efficiency within the company
§ Changes do not affect the customer directly
Value
Proposition
Value
Creation
Value
Capturing
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

6. 6 Karlsruhe Service Research Institute
www.ksri.kit.edu
§ Example: Stables online-store
§ identifies customers’ location through IP-address
§ individual prices based on factors such as:
§ average customer income in that area
§ distance to the closest rival “brick-and-mortar” store
§ A study unveiled price variation of up to 166% due to geographic
location1
Pattern 2: Data-infused value capturing
§ Data and analytics are used to impact the way
business models capture value by creating a
better understanding of the customer
§ discovery and application of usage
patterns from web data
§ automated insights into their customer
needs
§ make conclusions about the customer’s
individual willingness to pay
Value
Proposition
Value
Creation
Value
Capturing
1 Mikians et al. (2012): Detecting price and search discrimination on the internet, in: Proc. o.t. 11th ACM Workshop on Hot Topics in Networks, pp. 79-84.
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

7. 7 Karlsruhe Service Research Institute
www.ksri.kit.edu
§ Example: Rolls Royce
§ Already offering performance-based contracts instead of “simply” selling
jet engines to customers (“power-by-the-hour”)
§ Additionally, they collect engine data from a variety of integrated sensors
§ With software VisiumFUEL customers of Rolls Royce can monitor the aircraft’s
fuel consumption and identify opportunities for efficiency improvements
Pattern 3: Data-infused value proposition via creation
§ Innovating existing value proposition by
offering additional value through data
and analytics
§ No changes in value capturing
§ Additional value is contributing to
differentiation or strengthening long
term loyalty
Value
Proposition
Value
Creation
Value
Capturing
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

8. 8 Karlsruhe Service Research Institute
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§ Example: Daimler Fleet Board
§ offers a fleet operation service across all industries
§ in cooperation with an insurance company, data and analytics are used to
additionally offer highly individualized and flexible price models:
§ they track the driver behavior as well as the intensity of vehicle usage
§ based on this data the insurance premium is calculated on an individual
monthly basis
Pattern 4: Data-infused value proposition via capturing
§ Data and analytics change the way
value is capture and by that add value
in the value proposition
§ The way value is created in their core
business model is not impacted
Value
Proposition
Value
Creation
Value
Capturing
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

9. 9 Karlsruhe Service Research Institute
www.ksri.kit.edu
Pattern 5: New business models
§ Some companies are able to utilze the full
potential of data and analytics for their
business model
§ infusing the entire business model
eventually creates a completely new, “data-
driven” or “data-based” business model
Value
Proposition
Value
Creation
Value
Capturing
§ Example: Verizon Wireless
§ As the biggest mobile phone operator in the US they collect the individual
whereabouts of their customers through their regular service
§ They enrich this data with demographic information (e.g. age, gender)
§ Then offer “Precision Market Insights”, a service for businesses, point-of-
interest operators, cities, fairs, etc. that helps to gain a better understanding
of the customer segments and customer flows
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

10. 10 Karlsruhe Service Research Institute
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Data-infusion is a continuum and in practice still lacks to create
value for customers via a data-infused value proposition
Data-infusion
is not a binary
criterion
Data-infusion
cannot only
used for
internal
optimization
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation

11. 11 Karlsruhe Service Research Institute
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Thank you!
Ronny Schüritz
ronny.schueritz@kit.edu
https://de.linkedin.com/in/ronnyschueritz
30. Aug 2016 Ronny Schüritz - Patterns of Data-Infused Business Model Innovation