Business Modelling – What Is It?

Put three business people in a room and ask then the question “What is a business model?” and you will get at least four replies – none of which may be correct!

The usual picture that comes to the minds of business people,Business Modelling – What Is It? Articles consultants and analysts when they hear the term ‘business model’ is what might be called a ‘financial class’ of business model, for example:

•a “dot.com” model
•a “utilities” model
•an “air transport” model

What these models represent is the financial structures these types of business ought to have. They define how the business ought to be capitalised and structured from a financial point of view, its key financial performance indicators, its anticipated profit profiles, etc. Strictly, they should be referred to as ‘Financial Business Models’.

Financial business 동탄 오피 models are very important but they are only a small part of the overall picture! What they miss out is the essence of the business – what it is that the business does and the information needed to do it. Without knowing these things it is unlikely that any business can be made to perform in the manner that the financial business models predict. And yet it is amazing how many business people try to operate without this information!

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Essential Map of the Business
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If a business person has a factory he/she will have plans of this showing the overall shape, entrances, exits, services, machinery layout, etc. These plans are essential to successfully managing the factory. No business would think of being without them and yet the factory is only the place where the business is carried out.
Far more important than the factory (and more complex) is the business itself and yet few business people have a map (=model) of this – well not outside their heads! It is not surprising that most businesses fail to meet their full potential.

So again we ask: “what is a business model?”. And this time we have the answer – it is an essential ‘map’ of the business. It is a model that shows (as a minimum):

•what it is a business does (or ought to do)
•the structure of the information it needs to do it

Additionally the model can also show:
•the order in which functions need to be carried out.
•how information flows between business activities.
•how data is changed from one state to another.
•how functions, data, departments, technology are related to each other.
•the manner in which functions are executed.