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Defining business model key performance indicators using intentional linguistic summaries.

Rick Gilsing1, Anna Wilbik2, Paul Grefen1,3

  • 1Eindhoven University of Technology, Eindhoven, the Netherlands.

Software and Systems Modeling
|June 21, 2021
PubMed
Summary

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Organizations need better ways to evaluate business model innovation. This study introduces a new method for defining Key Performance Indicators (KPIs) that supports early-stage decision-making and evolves with the innovation process.

Area of Science:

  • Business and Management
  • Innovation Studies
  • Decision Science

Background:

  • Organizations innovate business models to stay competitive, but this process involves uncertainty and data challenges.
  • Evaluating business models is crucial for decision-making, often using Key Performance Indicators (KPIs).
  • Existing KPI methods are often quantitative and unsuitable for early innovation phases.

Purpose of the Study:

  • To develop a novel method for defining business model KPIs.
  • To address the limitations of quantitative KPIs in early-stage business model innovation.
  • To provide holistic support for decision-making throughout the innovation process.

Main Methods:

  • Design science research methodology.
  • Development of a novel method for defining business model KPIs.
Keywords:
Business model evaluationBusiness model innovationIntentional linguistic summariesKey performance indicatorsLinguistic summarization

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  • Utilizing structured templates based on linguistic summarization theory to create qualitative KPIs.
  • Demonstrating gradual quantification of KPIs for later innovation phases.

    • Main Results:

    • A new method for defining business model KPIs was developed.
    • Qualitative KPIs suitable for early-stage decision-making were created using structured templates.
    • The method allows for gradual quantification of KPIs to support later innovation stages.
    • The method was evaluated in two real-life business cases with 13 industry experts.

    Conclusions:

    • The developed method offers a more holistic approach to business model evaluation.
    • Qualitative KPIs are effective for supporting early-stage business model innovation decisions.
    • The method's adaptability supports decision-making across different innovation phases.