Progress in IS Jan F. Tesch   Editor Business Model Innovation in the Era of the Internet of Things Studies on the Aspects of Evaluation, Decision Making and Tooling Progress in IS More information about this series at http://www.springer.com/series/10440 Jan F Tesch Editor Business Model Innovation in the Era of the Internet of Things Studies on the Aspects of Evaluation, Decision Making and Tooling 123 Editor Jan F Tesch Stuttgart, Germany Dissertation Georg-August Universität Göttingen, 2017 Supervisory board First supervisor: Prof Dr Lutz M Kolbe Second supervisor: Prof Jan Muntermann Third supervisor: Prof Indre Maurer Date of oral examination: 24th of October 2017 ISSN 2196-8705 ISSN 2196-8713 (electronic) Progress in IS ISBN 978-3-319-98722-4 ISBN 978-3-319-98723-1 (eBook) https://doi.org/10.1007/978-3-319-98723-1 Library of Congress Control Number: 2018955918 © Springer Nature Switzerland AG 2019 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Foreword The ability to establish novel business models is essential to ensuring the ongoing success of traditional corporations in a digital era, but novel business models are also a major theme for startups and SMEs However, business model innovation poses tremendous challenges, particularly in technology-driven industries Despite the salience of these well-known challenges, present innovation processes not yet reflect the requirements necessary for managing the ever-increasing complexity of connected products, solutions, and their attendant ecosystems in a future world of the Internet of things (IoT) In this regard, it is critical to form designated entities which foster the systematic exploration of new business opportunities and which provide an excellent foundation for strategic management decisions Since joining the Bosch Group in 2011, Dr Jan F Tesch has taken on several roles in which he has supported the expansion of the business portfolio of various business units into the digital space In addition, Dr Tesch has had the opportunity to collaborate with numerous scholars, leading to many practical findings regarding systematic business model innovation, and he has contributed to an enhanced scientific understanding of the field Dr Tesch’s work has been published in numerous peer-reviewed scientific journals, and he has participated in several conferences on the topic of business model innovation In his current role, Dr Tesch is supporting the development of IoT business model innovation and has contributed to the company’s future direction with his findings This book serves as a synthesis of seven individual studies dealing with the intersection of research and practice The work outlines an innovation framework for developing IoT-based business models built upon the learnings and insights generated throughout the course of several innovation projects Furthermore, Dr Tesch introduces novel tools, methods, and best practices to help business model consultants support the decision-making of senior management Stuttgart, Germany October 2017 Dr Johannes Sommerhäuser Senior Vice President, Head of Corporate Business Model Innovation, Robert Bosch GmbH v Acknowledgements The emerging paradigm of the so-called Internet of things (IoT) represents an overwhelming opportunity to entrepreneurs, SMEs, and corporations alike Thereby, the ability to develop innovative new business models is seen as one of the most challenging tasks This topic has sparked my enthusiasm from as early as I wrote my thesis graduating from Karlsruhe Institute of Technology in 2011, where I was assigned to determine a viable business model for connected EV charging equipment for Bosch I discovered that for professionals in this field, it is key to understand the intersection of economics, strategic management, entrepreneurship, operations research, finance, and information systems At this time, however, it was not clear to me how these subjects merge together as a whole—a circumstance also reflected by scientific literature’s emphasis on further clarification of the topic business model innovation Hence, my idea of pursuing a Ph.D was to combine the individual knowledge and thus to contribute to an enhanced, interdisciplinary understanding Furthermore, the book at hand also seeks at providing business model innovation professionals with best practice tools for decision-making based on experiences in IoT projects I am deeply thankful that I got the exceptional opportunity to pursue this endeavor at both Robert Bosch GmbH and at the Chair of Information Management at the University of Göttingen—a setting allowing for ideal conditions for practice-oriented research Within the following, I express my utmost gratitude to all those who believed in and largely contributed to this endeavor along the way First and foremost, I would like to thank Prof Dr Lutz M Kolbe, Dean of the Faculty of Economic Sciences of the University of Göttingen, Prof Dr Jan Muntermann and Prof Dr Indre Maurer for the supervision of the thesis Also, I would like to thank Reinhold Mörder, Thomas Schmidt, Christoph Erbacher, and Dr Mark Müller for giving me the chance to pursue this endeavor within the business unit Software Innovations at Bosch Furthermore, my deepest thankfulness is to my department supervisor Dr Marco Lang, who has given me invaluable support, freedom of scope, vii viii Acknowledgements and valuable advice Within the Robert Bosch GmbH, I would like to thank Dr Johannes Sommerhäuser and Doris Grammer for giving me the opportunity to continue working on IoT topics within the newly founded corporate department for Business Model Innovation (C/BM) Your leadership is a true inspiration to me Further thanks are to the co-authors of the studies within this book, Dr Gerrit Remané, Dr André Hanelt, Monika Streuer, Kirstin E Bosbach, Dr Uwe C M Kirschner, and Miriam Lehmbrink, for the excellent and fruitful cooperation In the same manner, I would like to thank the students who have written their graduation thesis under my supervision, Benedikt Freiherr von Ziegesar, Ronja Lamers, and Hardy Killus, for their magnificent work and their valuable contribution to the overall research project Particular thanks for their excellent ideas, thoughts, and dedication to our joint research on IoT business model innovation go to Anne-Sophie Brillinger and Dominik Bilgeri I strongly believe that our spirit of working as a team and putting the greater goal above everyone’s incentive made the outcome a lot greater than the sum of each individual’s efforts This is what true teamwork is all about Apart from all the aforementioned, I would like to thank my colleagues from the Chair of Information Management for the excellent working atmosphere and the valuable scientific feedback: Dr Alfred Benedikt Brendel, Benjamin Brauer, Björn Hildebrandt, Dr Carolin Ebermann, Daniel Leonhardt, Dr Everlyn Piccinini, Prof Dr Johann Kranz, Dr Johannes Schmidt, Dr Markus Mandrella, Dr Matthias Eisel, Muhammad Raheel, Dr Patrick Urbanke, Patryk Zapadka, Dr Sebastian Zander, Dr Simon Trang, Sromona Chatterjee, and Dr Thierry Ruch I am also very gifted to enjoy deep and long-lasting friendships with some very great minds: Anika Schweizer, Ann-Kathrin Schuon, Dominik Kollm, Eva Zimmer, Dr Ilja Nastjuk, Janine Flưter, Dr Konrad Zimmer, Konstantin Ohlert, Dr Lukas Arenz, Dr Martin Arenz, Matthias Feth, Michael Christophers, Moritz Fanti, Oliver Biwer, Sabine Fuchs, Sarah Barkow, Sebastian Martens, Steinar Vinne, and Thomas Meier I know many of you for more than two decades We have gone through ups and downs of life together, and no matter what happened, we have always been there for each other This is what really counts in life Last, but most important, I wholeheartedly thank my parents, Christa and Frank, and my sister, Anna-Teresa Tesch My parents have always sought for giving my sister and me all freedom and infinite support to pursue whatever we found was the right thing to do, even if it meant a high degree of their own abstinence Without their invaluable commitment and endless love, none of our prosperities would have been even close to be achieved Jan F Tesch Contents Part I Foundations Introduction Jan F Tesch Theoretical Background Jan F Tesch 19 Part II Decisions and Evaluation in IoT Business Model Innovation IoT Business Model Innovation and the Stage-Gate Process Jan F Tesch, Anne-Sophie Brillinger and Dominik Bilgeri 51 The Evaluation Aspect of Digital Business Model Innovation Jan F Tesch and Anne-Sophie Brillinger 67 Part III Studies on the Roles of Tools and Methodologies in IoT BMI The Business Model Pattern Database: A Tool for Systematic BMI Gerrit Remané, Andre Hanelt, Jan F Tesch and Lutz M Kolbe 89 A Business Model Perspective on Innovation Susceptibility 145 Kirstin E Bosbach, Jan F Tesch and Uwe C M Kirschner Profit Driving Patterns for Digital Business Models 165 Monika Streuer, Jan F Tesch, Doris Grammer, Marco Lang and Lutz M Kolbe Customer Surveys as a Quantitative Evaluation Tool for Digital BMI 177 Jan F Tesch, Miriam Lehmbrink, Gerrit Remané and Lutz M Kolbe ix x Contents Scenario Planning as a Causal Evaluation Tool for IoT Business Model Innovation 209 Jan F Tesch Part IV Contributions Findings and Results 233 Jan F Tesch Implications—An Integrative Framework for IoT Business Model Innovation 243 Jan F Tesch Concluding Remarks 251 Jan F Tesch References 257 Implications—An Integrative Framework for IoT Business Model Innovation Jan F Tesch Keywords Internet of Things · Innovation Framework Business Model Innovation · Business Model · IoT This chapter discusses the main implications of the book for all relevant stakeholders First, theoretical implications for the three research disciplines are outlined, which is followed by implications for practitioners in the field of IoT business model innovation Theoretical Contributions In the sense of cumulative research knowledge (Wade and Hulland 2004), theories on business model innovation were refined by regarding the impacts of the novel paradigm of the Internet of Things (IoT) Also, advancements in the methodological knowledge can be argued—especially Action Design Research (ADR)—has been proven as a valid methodology for the creation of novel tools The theoretical insights presented within this dissertation extend the knowledge of the three disciplines of Information Systems (IS), Strategic Management (SM), and Technology and Innovation Management (TIM) (Zott et al 2011) An overview of the major research contribution to the disciplines are given in Table To Information Systems (IS), the anticipated research contribution of the dissertation book was to uncover new gestalts of emerging IoT-based business models and to uncover typologies of prevailing patterns within IoT-based business models J F Tesch (B) University of Gưttingen, Gưttingen, Germany e-mail: mail@jan-tesch.de © Springer Nature Switzerland AG 2019 J F Tesch (ed.), Business Model Innovation in the Era of the Internet of Things, Progress in IS, https://doi.org/10.1007/978-3-319-98723-1_11 243 244 J F Tesch Table Overview of major contributions to research Part Information systems Strategic management Innovation management II Description of novel gestalts of business models within the era of the IoT: ecosystems of interplaying partners comprise at least one business model as an orchestrating platform with a hybrid value proposition of a physical function and a digital service Identification of major decisions within IoT business model innovation projects Formalization of strategic and tactics stages within phases of business model evaluation within IoT innovation projects Elaboration of an integrative framework comprising stages and gates of business model innovation in the IoT era Structured review of existing tools and methodologies to foster the evaluation aspect III Proposition of the first database on prevailing patterns within business models Elaboration of a taxonomy differentiating digital and non-digital related patterns Extension of the understanding of prerequisites and features of applied patterns within IoT-projects Proposition of novel tools and methodologies to identify business opportunities to strategically trigger the exploitation market inefficiencies through IoT technology Elaboration of “Innovation-Lever” describing sources of competitive advantages as sources of strategic choice options Proposition of how to use business model patterns as means of evaluation (effectual logic) Concrete methodological approach to apply quantitative surveys to an analytical phase (quantitative logic) Concrete methodological approach to apply scenario planning (causal logic) Within Part II, 13 cases of innovation projects subject of the IoT paradigm revealed prevailing, emerging gestalts of successful business models Also corresponding to the suggestions of Gawer and Cusumano (2015), an ecosystem of different players within the IoT, such as end-customers, data-customers, suppliers or insurances, always stand in relation with an orchestrating business platform Furthermore, this platform has a hybrid offering towards end-customers, i.e a physical function with the offered product, and corresponding digital services The implications thus confirm and extend the suggestions of Fleisch et al (2014b) As part of Study and 7, Part III reveals the emergence of a multi-sided business platform in the smart home domain as a new gestalt of IoT business models Furthermore, Part III proposes the first taxonomy of business model patterns, recombining and synthesizing the understanding of different foci of investigation, such as e-business models (Clemons 2009; Eisenmann 2001; Gassmann et al 2014) The understanding on patterns is extended by an explicit view on which patterns—i.e gestalts of IoT business models—drive Implications—An Integrative Framework for IoT Business Model Innovation 245 profitability depending on circumstances within the ecosystem In sum, the implications contribute to the IS community by explaining new forms for business models within the era of the IoT, and thus provide research guidance, as the book pointed out several “classes” of IT-enabled business models To Strategic Management (SM), the anticipated research contribution of the dissertation book was to provide an understanding of causes and effects of systematic value creation within the economic paradigm of the IoT Furthermore, the book anticipated to explain how companies may systematically innovate business models in order to develop competitive advantages and to capture value thereof Within Part II, an integrative framework is proposed that contributes suggestions on how different phases of a business model correspond with the theory of business models as a result of “strategic choices” (Casadesus-Masanell and Ricart 2007, 2010; CasadesusMasanell and Zhu 2013) Thereby, the book reviews how tools may systematically be used in order to base decision making, which in turn leads to business models as an activity system (Zott and Amit 2010) that is superior in the creation of value (Amit and Zott 2012) and thus represents a competitive advantage With the integrative framework, scholars focusing on IoT are increasingly enabled to understand causes and effects of value creation, understanding the application of recommended tools and methodologies corresponding to the dominant mode of evaluation in the respective phase Part III displays how tools and methodologies help to improve the consistency of the business model design It reveals sources of risk caused by uncertainties of both internal (unrealistic assumptions) and external (PESTE) factors The book implies that actual management decisions can be enhanced by increasing transparency on the risk and return of the innovation project In sum, the implications contribute to Strategic Management (SM) by explaining new network- and activity system-based value creation mechanisms and sources of competitive advantage For Technology and Innovation Management, the anticipated research contribution of the dissertation book was to provide insight on how BM tools and methodologies may help to convert new technologies into differentiating competitive advantages (Zott et al 2011) Within Part II, as aforementioned, an integrative framework was proposed, which corresponds to the identified influences of the IoT on business models (Arnold et al 2016; Laudien and Daxböck 2016b) This contributes to an increased understanding when reviewing the use and effectiveness of tools within the IoT-paradigm Within Part III, the book contributes by the creation and validation of tools and methodologies to evaluate business models Corresponding to the emphasized importance of effectual means (Ries 2011; Bilgeri et al 2015; Fleisch et al 2014a, b; Sosna et al 2010), business model patterns were investigated in greater detail Furthermore, the book has outlined a concrete methodological approach to incorporate conjoint analysis to IoT business model innovations Lastly, it was confirmed that causal means of evaluation—i.e scenario planning—bears tremendous potential throughout the entire process of IoT business model innovation In sum, the investigation on tools, methodologies, their systematic use and corresponding effectiveness within IoT-projects tremendously contributes to an enhanced understanding on how technology can be converted into market success 246 J F Tesch An Integrative Framework for IoT Business Model Innovation As of yet, knowledge upon the systematic innovation of business models is still scarce in existing literature (Wirtz et al., 2016) Despite that, Osterwalder et al.’s (2010) contribution to practice certainly considers several aspects of digital business models and had a tremendous impact on the way practitioners interpret, design and evaluate business models However, the framework provides only limited guidance on IoT projects Generally, existing publications are based on rather anecdotal evidence (Frankenberger et al 2013) In this sense, the findings of the seven research papers contribute to a practitioner’s understanding on a phase-based framework for business model innovation in the era of the Internet of Things The framework is supported by the implications from the investigations on the role of supporting tools and methodologies within the phases, and the roles of stakeholders involved within such an innovation project An overview of the integrative practitioner framework is given in Fig The initiation of the IoT business model innovation project may be triggered by several factors: first, strategic considerations, e.g stemming from portfolio management, may imply the need for strategically addressing a new market through an innovative business model An example is reflected with the smart home case in Studies and Hereby, there was no underlying IoT technology such as middleware at hand, however, the presence of the focal company in the home appliances industries implied that future competitive advantages lie in interactions between the manufactured devices In this case, the main task of BMI professionals is to evaluate what key activity or what key resource might serve as a differentiating factor in the future This corresponds to the understanding of the activities based perspective (Amit and Zott 2010, 2012) Second, another initiation path of a business model innovation endeavor is in technology advancements, i.e the R&D-department of a company finds and patents a certain artifact that might provide a competitive advan- Fig The integrated framework for IoT business model innovation Implications—An Integrative Framework for IoT Business Model Innovation 247 tage for a future business model In this case, the task of BMI professionals is to find the optimal method for creating and capturing value for the focal firm, which corresponds to the perspective of Chesbrough (2010) Third, market pull serves as a trigger to innovate the business model For example, a yet unexplored market indicates substantial demand on a certain value proposition Corporate strategy identifies such a potential and initiates the development of a locally adapted business model The task of business model professionals is then to segment the new market and to find adequate, locally adapted value propositions Fourth, changes in the ecosystem of the business model may be a further initiator, as external PESTE-factors driving the viability of current business models are subject to change (Markides and Sosa 2013; Johnson et al 2008) In sum, such considerations usually originate in a corporate strategy department, where professionals systematically screen business opportunities for several business units Practitioners of the respective departments are provided with several tools for the IoT-paradigm, such as the “Innovation Levers” (Study 4) to systematically identify opportunities or threats Causal, analytical tools from strategic management (Study and 7) thereby help to indicate the necessity to innovate existing or new business models Despite the different sources triggering the initiation, the integrative framework provides business model innovation professionals with a templated phase model of how to achieve the goal of finding a viable business model as a goal set out by strategic management (Fig 1) As the integrative framework is based on the identification of the occurrence of two major decision points throughout all IoT business model innovation projects (Study 1), it argues to be valid irrespective of potential path dependencies (initiators of the process), and to be seen as a “least common denominator” of decision points across all investigated business model innovations Table points out the implications of the book towards business model professionals in innovation projects within the paradigm of the Internet of Things (IoT) Above all, the findings of Part II emphasize that—compared to former economic paradigms and to ordinary product development—BMI in the era of the Internet of Things requires a highly dynamic course of action This means that within the identified phases, no template procedure has been proven to be transferable from project to project Hence, the general role of BMI professionals in a corporation is to support project teams in guiding towards the two identified decision points based on experiences from past BMI projects BMI professionals help structuring the key aspects of a business model and to set these in relation to each other, i.e particularly helping to form a holistic overview of the intended business model design Towards a decision board, this helps to reveal potential shortcomings and critical factors Evidence from both Parts II and III emphasizes the importance of an ongoing use and re-iteration of the portrayed evaluation tools and methodologies Hence, in the beginning of a BMI process, it has been proven to be most beneficial to start with raising hypotheses and assumptions that act as main drivers of the business model’s viability This helps to estimate the probability of market success already in an early (analytical) phase and thus increases transparency for decision makers In later phases, the ongoing validation or falsification of hypotheses and assumptions 248 J F Tesch Table Features of the phases of the integrative IoT business model innovation framework Analytical phase Prototyping phase Scaling phase Operating questions What is the ideal archetypal design for the business model? Is there a market for a certain value proposition? Is there a potential source of a competitive advantage as a differentiator to potential competitors’? Which business model setup addresses? Who are ideal partner? Does the customer accept the value proposition? What is the customer’s willingness-to-pay at the point-of-sales? What tactics should be employed with the business model to maximize profit? What is the best price to B2B and B2C customers? In what order should markets be entered? Supporting tools and methodologies with the highest impact in the corresponding phase SWOT-analysis PESTEL Taxonomies and morphological boxes Expert interviews Levers for strategic business model innovation Learning from analogies through BM patterns Business Model Patterns Experimentation Trial and error Minimum viable product approach Roadmapping Balanced scorecards and metrics Scenario planning Decision support systems Market simulations, predictions and forecasting Technology forecasting Customer surveys Financial spreadsheets Decision support systems Management decision base Qualitative explanation of potential differentiating factors and first, high-level profit-and-loss calculations Proved technical feasibility and customer’s acceptance and willingness-to-pay at projected point of sales Total-costs estimation of the projected business model in a rolled-out-state Market research and Design MVP and industry expert secure its soundness interviews for customer-centric Structure ideas and evaluation of value thoughts to an overall creation aspects design Evaluate strategic Evaluate archetypal options for business model design commercialization Elaborate and stress-test a business model implementation roadmap Financial viability of the business model in at least a submarket to decide on further scaling to further markets The role of BMI professionals Consult in quantitatively measuring the performance of the business model while scaling to overall market success Identify and evaluate potential tactical options to enhance the business mode’s viability Implications—An Integrative Framework for IoT Business Model Innovation 249 by means of rather effectual tools and methodologies accompanying the BMI process reveal further information Hence, this contributes to a constantly improving understanding of the general viability of the BM design and thus lowers potential risks The impact of the tools’ and methodologies’ contribution differs according to the dominant mode of evaluation of the identified phases of the BMI project In sum, the integrative framework, as outlined in Fig 1, guides practitioners to structure the process, gives hints on essential operating questions and enables them to navigate through the wealth of tools as identified by the book (Study 2) The general role of BMI professionals is to provide IoT projects with knowledge using such tools in the immediate context of a project Finally, the implemented and viable business model needs to be anchored within the focal company’s operations, which, in the era of the Internet of Things (IoT), is primarily the corporate IT department The findings help BMI professionals to detect early key (IT-) resources and activities that are influencing performance of the developed business model Hence, practitioners from corporate IT profit from the identification of the prevailing gestalts within the IoT era (see Theoretical Background and Study and 7), which allows for the early setup of recurring IT-architectures that emerge vital for a multitude of projected IoT business models within the focal company This, in turn, enables corporate IT-departments and business units to streamline processes and capabilities in order to foster further efficiency of the implemented business model (Demil and Lecocq 2010) References Amit, R., & Zott, C (2010) Business model innovation: Creating value in times of change Amit, R., & Zott, C (2012) Creating value through business model innovation MIT Sloan Management Review, 53(3), 41–49 Arnold, C., Kiel, D., & Voigt, K.-I (2016) How the industrial internet of things changes business models in different manufacturing industries International Journal of Innovation Management, 20(08), 1640015 Bilgeri, D., Brandt, V., Tesch, J., & Weinberger, M (2015) The IoT business model builder Available at: http://www.iot-lab.ch/?page_id=10738 Casadesus-Masanell, R., & Ricart, J E (2007) Competing through business models IESE Business School, No D/713, pp 1–28 Casadesus-Masanell, R., & Ricart, J E (2010) From strategy to business models and onto tactics Long Range Planning, 43(2–3), 195–215 Casadesus-Masanell, R., & Zhu, F (2013) Business model innovation and competitive imitation The case of sponsor-based business models Strategic Management Journal, 34(4), 464–482 Chesbrough, H (2010) Business model innovation: Opportunities and barriers Long Range Planning, 43(2–3), 354–363 Clemons, E K (2009) Business models for monetizing internet applications and web sites: Experience, theory, and predictions Journal of Management Information Systems, 26(2), 15–41 Demil, B., & Lecocq, X (2010) Business model evolution: In search of dynamic consistency Long Range Planning, 43(2–3), 227–246 Eisenmann, T R (2001) Internet business models: Texts and cases Boston, USA: McGraw-Hill Inc 250 J F Tesch Fleisch, E., Weinberger, M., & Wortmann, F (2014a) Business models and the internet of things Available at: http://www.iot-lab.ch/wp-content/uploads/2014/11/EN_Bosch-Lab-WhitePaper-GM-im-IOT-1_3.pdf Fleisch, E., Weinberger, M., & Wortmann, F (2014b) Geschäftsmodelle im Internet der Dinge HMD Praxis der Wirtschaftsinformatik, 51(6), 812–826 Frankenberger, K., Weiblen, T., Csik, M., & Gassmann, O (2013) The 4I-framework of business model innovation: A structured view on process phases and challenges International Journal of Product Development, 18(3/4), 1–18 Gassmann, O., Frankenberger, K., & Csik, M (2014) The business model navigator: 55 models that will revolutionise your business Harlow, UK: Pearson Gawer, A., & Cusumano, M A (2015) Business platforms In international encyclopedia of the social & behavioral sciences, (2nd edn, pp 37–42) Johnson, M W., Christensen, C M., & Kagermann, H (2008) Reinventing your business model Harvard Business Review, 86(12), 57–68 Laudien, S M., & Daxböck, B (2016) The influence of the industrial internet of things on business model design: A qualitative-empirical analysis International Journal of Innovation Management, 20(08), 1640014 Markides, C., & Sosa, L (2013) Pioneering and first mover advantages The importance of business models Long Range Planning, 46(4–5), 325–334 Osterwalder, A., Pigneur, Y., & Clark, T (2010) Business model generation: A handbook for visionaries, game changers, and challengers (1st ed.) Hoboken, NJ: Wiley Ries, E (2011) The lean startup: How constant innovation creates radically successful businesses London: Portfolio Penguin Sosna, M., Trevinyo-Rodríguez, R N., & Velamuri, S Ramakrishna (2010) Business model innovation through trial-and-error learning: The Naturhouse case Long Range Planning, 43(2–3), 383–407 Wade, M., & Hulland, J (2004) The resource-based view and information systems research: Review, extension, and suggestions for future research MIS Quarterly, 28(1), 107–142 Wirtz, B W., Pistoia, A., Ullrich, S., & Göttel, V (2016) Business models: Origin, development and future research perspectives Long Range Planning, 49(1), 36–54 Zott, C., & Amit, R (2010) Business model design: An activity system perspective Long Range Planning, 43(2–3), 216–226 Zott, C., Amit, R., & Massa, L (2011) The business model Recent developments and future research Journal of Management, 37(4), 1019–1042 Concluding Remarks Jan F Tesch Keywords Business model innovation · Internet of things · IoT · Digitalization The elaborated integrative framework has given an overview of the various aspects of IoT business model innovation, support for decision-making, and created a set of new tools and methodologies for evaluation First, a multiple case Study comprising 13 cases and 27 interviews analyzed stereotypical IoT business model innovation projects across several industries This led to a theorization of decisions and decision criteria within business model innovation in the era of the Internet of Things A rigorous literature review of 104 scientific papers based the considerations on the use and effectiveness of tools and methodologies This resulted in the categorization into qualitative, quantitative, effectual and causal means of evaluation The synthesized findings then led to the elaboration of the integrative framework, i.e a 3-phase innovation process, which helps to further conceptualize the aspects of evaluation in IoT business model innovation In that sense, this research largely contributed to the field of “what determines the process and elements of business model innovation in specific contexts” (Schneider and Spieth 2013, p 23) The conceptualization of evaluation tools and methodologies is treated with the process developed in Part III First, the effectual logic is investigated by reviewing 22 original sources of business model patterns With the elaboration of a harmonized, structured and categorized database of patterns (Study 3), the appliance is then explored within the different phases (Study and 5) Thereby, the conceptualization is based on an Action Design Research approach (analytical phase) and a multiple case-study (scaling phase) Second, quantitative tools, previously only used in an analytical phase, are also conceptualized as a valid means of evaluation J F Tesch (B) University of Göttingen, Gưttingen, Germany e-mail: mail@jan-tesch.de © Springer Nature Switzerland AG 2019 J F Tesch (ed.), Business Model Innovation in the Era of the Internet of Things, Progress in IS, https://doi.org/10.1007/978-3-319-98723-1_12 251 252 J F Tesch in previous phases with a single case Study of an IoT-project, where a test set of conjoint surveys (n 250) were confirmed as having substantial impact on decision quality (Study 6) Third, the role of scenario planning as a proxy of the causal logic is iteratively tested and validated with Action Design Research (Study 7) In that sense, this book largely contributed to the research field of how “firms [can] be supported in conducting business model innovation in terms of tool and methods” (Schneider and Spieth 2013, p 23) Limitations This book is understood to be a leap into the understanding of business model innovation in the era of the Internet of Things (IoT) While it provides important advances to both theory and practice, there are also limitations to be considered by scholars and business model innovation practitioners Hence, it is emphasized that the resulting recommendations should be interpreted with caution and subject to the overall project or research setting The resulting integrative framework and the elaborated tools and methodologies of the book need to be assessed in the light of methodological limitations First, as the fundamental base of the identification of two recurring decision points, the framework’s main limitation is the generality of qualitative case-study based research (Yin 1989) Also, more specifically, the research results are limited by the selection of case studies and the respective interview partners (Wynn and Williams 2012) In terms of Study 1, a comparatively large sample size of 27 experienced professionals from eight multinational organizations across the IoT ecosystem were selected based on a set of predefined criteria Nevertheless, further studies should be conducted covering other types of companies as well as additional industries In other words, future work in different empirical settings will be necessary to further improve the validity of the research (Desyllas and Sako 2013) Furthermore, also corresponding to the results of Study and 6, the case studies investigated a certain point in time of the business model innovation project, where often the full clarification of the overall financial viability was not given However, all projects were at least in a scaling phase at the end of the observation period Nevertheless, longitudinal studies would help further research to strengthen the consistency of the case-study findings Second, the keyword-search on evaluation tools and methodologies only includes results that were rated B or better in the initial step of Webster and Watson’s (2002) methodology However, this constraint was adjusted in the forward-/backward step to also consider lower-ranked scientific outlets and contributions to a practitioner’s audience Nonetheless, as the terminology of business model innovation is relatively new and thus many impactful new tools and methodologies are not considered by prevailing scientific ratings of outlets, it is possible that valuable sources have not been considered Third, the categorization or structuring through taxonomies within the several studies of this book may also be seen in light of limitations Taxonomies cannot be universally perfect, but are a useful leap to solve a specific problem (Nickerson et al 2013, p 341) This Concluding Remarks 253 stems from the fact that the mapping of each item in the taxonomy dimensions might be biased due to the subjective interpretations of the authors of the respective studies Nonetheless, several cross-checks were performed and the classification was widely discussed with the co-authors Fourth, Design Science Research (DSR) (Hevner et al 2004) was chosen to create tools for the specific prerequisites stemming from the economic paradigm of the Internet of Things Thereby, the guidelines of Gregor and Hevner (2013) were applied to secure generalizability As the author was an active part of the development, Iivari and Venable (2009) suggested the systematic use of the corresponding Action Design Research (ADR) theme (Sein et al 2011) This iterative research methodology allows for the ongoing development and demonstration of the artifacts However, shortcomings are that its validation is highly based on the subjective impressions of the involved stakeholders To counteract this, the artifacts were tested in a variety of projects and settings Nonetheless, the validity and impact of the tools only may be ultimately proven if retrospectively analyzed with case Study research methodologies after the projects achieved tangible business success Next to the methodological limitations, the choice of the unit of analysis might bear threats to the generality of the findings Study investigated innovation projects dealing with innovating an existing or novel business model subject to influences stemming from the paradigm of the IoT Thereby, the unit of analysis comprised both the central business platform orchestrating several players in an IoT ecosystem and complementary business models of a rather ordinary archetypal logic Hence, despite the fact that all investigated cases somehow dealt with the IoT paradigm, the generality of findings is limited to the two major identified decision points Second, Study reviewed literature on tools and methodologies in business model innovation which does not necessarily consider the IoT paradigm As the foci of the original sources was rather general, their usefulness and effectiveness within the IoT-paradigm is to be considered with caution Third, the tools and methodologies created were validated within a single holding company from the technology sector However, despite the fact that the tools were deployed in several business units and industries, the behavioral observation of their use only reflects the circumstances of large corporations Lastly, the dissertation provides evidence for only one means for each category of evaluation To secure confirmatory, further research on the applications of other tools of the same evaluation logic are to be reviewed To further strengthen the implications, this has also to be undergone in different markets or industries (or both) Furthermore, the book has not reviewed the use and effectiveness of several tools in combination In sum, a general limitation is that all evidence and data, except for Study and 3, was collected from projects and companies from German-speaking countries As empirical research usually strives for generalizations based on causal explanations, specific features of unique contexts might have been discarded along the way The implications thus have focus on large corporations from Europe, and should be considered with caution when aiming to apply in an entrepreneurial context and/or other cultural settings 254 J F Tesch Avenues for Future Research While the above reasons might limit the transferability and generalizability, the overall book also lays fruitful ground for future research This section discusses avenues for future research and proposes concrete opportunities for scholars in the field of the IoT business model innovation The proposed integrative framework opens a new perspective upon the evaluation aspect within procedures to innovate business models As such, the framework provides the groundwork to derive a multitude of avenues for future research on tools and methodologies (also see Study for more details): first, future research may critically review the actual use of the identified tools and methodologies within the proposed phase of the dominant logic Particularly the extent to which the tools actually contribute to the corresponding decision base could help to further clarify their effectiveness and thus provides valuable information for the further enhancement of the tools Second, despite the suggested positioning of tools within the integrative framework, if and how tools and methodologies may also be used in other phases also depicts a fruitful research avenue As paper has shown, this may enhance managerial decisions and thus help to better reveal promising projects Third, another option is to combine multiple tools and methodologies Thereby, opportunities lie at the intersection of the identified logics of business model logics E.g., the shortcomings of purely qualitative tools and methodologies are potential biases caused by a subjective perspective of the evaluator (Osterwalder and Pigneur 2013) As an example opportunity for future research, e.g., Ali (2015) has shown how to advance the value of qualitative tools with quantitative means In terms of the concrete findings, a concrete conceptualization of Ali’s (2015) idea was outlined by Haaker et al (2017), who considered the scenario planning approach from Study (Tesch 2016), delivering qualitative and quantitative criteria including financial aspects for a what-if perspective Haaker et al (2017), who cited Study and built upon the findings, showed how to use the full potential of scenarios to evaluate the business model by means of stress-testing A further idea would be to then combine the tooling with roadmapping (Reuver et al 2013) Forth, drawing analogies from past business model innovations depicts a further fruitful ground, e.g operationalized by subsequent research on business model patterns (Gassmann et al 2014; Abdelkafi et al 2013; Amshoff et al 2015) Despite the findings of Study and 5, further understanding on prerequisites, conditions and success factors for the use of patterns in practice helps to strengthen the ability to understand and lead IoT business model innovation More specifically, research on which pattern is suitable in the BMI project’s current situation, bears immense potential Fifth, also recurring risks within business models and specific business model types can be identified, analyzed and considered in decision-making An explicit investigation on strategic foresight and prediction methodologies may help to reduce reservations by counteracting uncertain assumptions on estimated returns Future research also lies in the field of further contributing to a theorized understanding of decisions and decision criteria as outlined by Schneider and Spieth (2013) Concluding Remarks 255 First, a concrete suggestion is to employ longitudinal multiple case studies As the theoretical and managerial implications outlined triggers for initiation, such a research endeavor may consider different origins of the BMI project as a starting point for further theorization of different IoT business model innovation paths Observing the progress of projects with the theoretical lens of the two major decisions of the integrative framework may reveal theorized mutualities and differences respective of potential path dependencies of IoT business model innovation phases Further, this could reveal the occurrence of recurring (sub-) decisions within the identified business model innovation paths and thus lays further ground for the conceptualization of different innovation paths In that sense, the integrative framework profits through a strengthened overall basis for decision making in BMI processes This, in turn, leads to a further enhanced understanding on the ideal application of tools and methodologies A second opportunity is using the identified business model patterns of Study to code the investigated business models of a multiple case Study Explaining how the design of the BM changes throughout passing the process steps over the time bears humongous potential to contribute to an enhanced understanding on “how […] distinct forms of business model innovation impact on the underlying process”, as outlined by Schneider and Spieth (2013), p 23 Finally, the aspects of portfolio and risk management are further fruitful fields adjacent to this book’s research on IoT business model innovation References Abdelkafi, N., Makhotin, S., & Posselt, T (2013) Business model innovations for electric mobility—What can be learned from existing business model patterns? International Journal of Innovation Management, 17(1), 1–41 Ali, A (2015) An MCDM approach towards M-payment business models evaluation International Journal of the Analytic Hierarchy Process, 7(2), 273–294 Amshoff, B., Dülme, C., Echterfeld, J., & Gausemeier, J (2015) Business model patterns for disruptive technologies International Journal of Innovation Management, 1–22 de Reuver, M., Bouwman, H., & Haaker, T (2013) Business model roadmapping: A practical approach to come from an existing to a desired business model International Journal of Innovation Management, 17(01), 1–18 Desyllas, P., & Sako, M (2013) Profiting from business model innovation: Evidence from pay-asyou-drive auto insurance Research Policy, 42(1), 101–116 Gassmann, O., Frankenberger, K., & Csik, M (2014) The business model navigator: 55 models that will revolutionise your business Harlow, UK: Pearson Gregor, S., & Hevner, A (2013) Positioning and presenting design science research for maximum impact Management Information Systems Quarterly, 37(2), 337–355 Haaker, T., Bouwman, H., Janssen, W., & de Reuver, M (2017) Business model stress testing: A practical approach to test the robustness of a business model Futures, 89, 14–25 Hevner, A R., March, S T., Park, J., & Ram, S (2004) Design science in information systems research MIS Quarterly: Management Information Systems, 28(1), 75–105 Iivari, J., & Venable, J R (2009) Action research and design science research—Seemingly similar but decisively dissimilar In ECIS 2009 Proceedings, No Paper 73 256 J F Tesch Nickerson, R C., Varshney, U., & Muntermann, J (2013) A method for taxonomy development and its application in information systems European Journal of Information Systems, 22(3), 336–359 Osterwalder, A., & Pigneur, Y (2013) Designing business models and similar strategic objects: The contribution of IS Journal of the Association for Information Systems, 14(5), 237 Schneider, S., & Spieth, P (2013) Business model innovation Towards an integrated future research agenda International Journal of Innovation Management, 17(01), 1–35 Sein, M K., Henfridsson, O., Purao, S., Rossi, M., & Lindgren, R (2011) Action design research MIS Quarterly, 35(1), 37–56 Tesch, J.F (2016) Discovering the role of scenario planning as an evaluation methodology for business models in the era of the internet of things (IoT) In Proceedings of the Twenty-Fourth European Conference on Information Systems (ECIS), Vol 24, pp 1–25 Webster, J., & Watson, R T (2002) Analyzing the past to prepare for the future: Writing a literature review Management Information Systems Quarterly, 26(2), 13–23 Wynn, D., Jr., & Williams, C K (2012) Principles for conducting critical realist case study research in information systems MIS Quarterly, 36(3), 787–810 Yin, R K (1989) Research design issues in using the case study method to study management information systems The Information Systems Research Challenge: Qualitative Research Methods, 1, 1–6 References Haaker, T., Bouwman, H., Janssen, W., & de Reuver, M (2017) Business model stress testing: A practical approach to test the robustness of a business model Futures, 89, 14–25 Kley, F., Lerch, C., & Dallinger, D (2011) New business models for electric cars—A holistic approach Energy Policy, 39(6), 3392–3403 Osterwalder, A., & Pigneur, Y (2013) Designing business models and similar strategic objects: The contribution of IS Journal of the Association for Information Systems, 14(5), 237 Zott, C., Amit, R., & Massa, L (2010) The business model: Theoretical roots, recent developments, and future research, Madrid, Spain © Springer Nature Switzerland AG 2019 J F Tesch (ed.), Business Model Innovation in the Era of the Internet of Things, Progress in IS, https://doi.org/10.1007/978-3-319-98723-1 257 ... research Business model Business model canvas Business model framework Business model innovation Design science research Industrial internet of things Internet of things Key performance indicator... provided initial insights on the influence of the Industrial Internet of Things (IIoT) on existing business models of manufacturing incumbents (Arnold et al 2016), or types of IoT business models... enablers of business model innovation, (2) process and elements of business model innovation, and (3) effects of business model innovation (Schneider and Spieth 2013) The endeavor of the book