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B2B, Enterprise Canvas and the big picture

January 16, 2012 2 comments

I’m using enterprise canvas  since Tom put it out there and I still couldn’t figure out this problem with modeling the relations of B2B business model. Now I have a little better understanding of the problem and I think I can describe it here so that you can help me to find a solution.

As I don’t have a business education, I was always troubled by what is B2B. In Wikipedia  it is described as “commerce transactions between businesses”. Well, here I mean something completely different (help me if I’m completely lost). I don’t think that if you sell a product to another company you can define your business as B2B. That would still be a B2C business where a company is in the role of the customer. In a B2B scenario, your business has a direct relation to customers of its customers. Let me give you some examples:

  • Company A – Online hotel booking: A traveler searches for a hotel in Company A web site and books a room in a hotel. Here hotel is the customer and it’ll pay a commission for the reservation. Traveler is hotels customer. Company A provides the relation between traveler and hotel to the hotel.
  • Company B – Call center: A credit card owner calls customer service of the bank to unblock her credit card. Credit card owner is the customer of the bank. Bank is the customer of call center and will pay for the service call center did for the credit card owner.
  • Company C – Payment provider: An online-shopper buys an item from the website of a local store and makes a payment with credit card. Shopper is customer of the local store. Local store is customer of payment provider and will pay commission for the transaction.

In all cases there’s a direct relation with customers of customers.  Immediate question is how to model this relation with enterprise canvas? Well, so far I’m convinced that they are suppliers. At least, this is the most suitable place I can place them. They’re definitely not customers, they are not the one’s paying for the value provided. They are not getting paid as suppliers neither. But when we are talking about value chain, we must be careful about what kind of value we are talking about. In this case the value provided to them is not financial, it won’t show up in the accounting system. But failing in this relation can be very dangerous for all value chain.

My problem is the missing link between these two very important roles in the model: customer and customers of the customer as supplier. For a B2C business there’s no such relation, it’s not important at all. Simple examples, being about simple B2C businesses, doesn’t show anything missing in the model. Take a look at the Business Model Generation book. There is only one example in whole book which I can say is B2B is the Google search and you can see “customers of Google” in the list of customers. Business being based on online ads, how does that make sense???

But is this relation really important?  Let’s go back a little and look what does it tell us. All companies I listed above are doing a B2B businesses with their customers. Let’s turn the picture around and look from the customer point of view. They have their own value chain. Take Company A case, hotel has a value chain where traveler is the customer and Company A is a supplier. Company A is providing a service (mainly customer relations). So can we say those businesses that have a supplier relation with customers of their customers appear as suppliers of services in their customers value chains? This means there’s always a bigger picture. Payment provider will define a vision about making payments easier, cheaper, etc. But it’s business is just to make another business work. Does that mean some enterprises are _fundamental_ than the others? In the real big picture, when we think about a community, what are most fundamental enterprises? Do we live for a purpose? 🙂 This one is a joke, but you see where this one is going when we start to think about bigger picture.

Summary:
– Some businesses have an inherent relation with customers of their customers which is not modeled in enterprise canvas or business model canvas,
– How do we model this relation and showing relations to other enterprises? Can we use existing frameworks or do we need a different one?
– What are the effects of such relations in the big picture enterprise architecture?

Any comments, anyone?