BUSINESS MODEL INVESTIGATION
Adam Badzynski
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INTRODUCTION approach / theme / focus / alignment
CHOICE
value statements / context / key insights
ANALYSIS
key partners / key activities / value proposition / customers and consumers / customer relationship / customer segment / key resource / distribution channel / cost structure / revenue stream
CONCLUSION resolution / summary / beyond healthcare
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INTRODUCTION approach / theme / focus / alignment
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approach In order to begin this deep dive of understanding the value proposition of a specific business, I feel it is imperative to match the company to themes and focus that are major current influences in the business landscape.
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industry growth THEME Industries are continually looking to grow their business into complementary or adventurous new sectors. Searching and acting on signals in integral to staying agile in an ever changing environment. Integrating technologies, adopting trends, and cultivating behaviours all influence opportunities that can be capitalized on if the industry reacts quickly enough. Industry growth must consider roles within a community, societal structures, and corporate governance to cultivate an environment to continue to improve.
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individual growth THEME Individuals are constantly look at ways to improve themselves so they can offer the most value to the things that they value the most. When in the right mindset humans want to function at their best, their top quality. This means they are intrinsically motivated to improve on elements in their life, including their work. The collective movement of motivated individuals has propelled the technology industry in the past 30 years into a current reality that was unthinkable before. Now the same thing is happening in industries like healthcare, individuals aspire to their authentic selves, which pushes the entire industry forward.
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data FOCUS Everyday patients and healthcare professionals create heaps of data that can be understood at structured and unstructured data. The former refers to the ability of capturing, processing, and analyzing data while the latter doesn’t have this ability to digest data. This invisible data is amorphous, it doesn’t have a clear form to display its information, yet it is still integral data for medical staff to make the best decisions. A sculptor must be created to capitalize on the world’s most under-utilized resource, data.
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data MaRS Uber IBM Tesla Snapchat Facebook Youtube Google
individual
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industry
alignment The company I will be canvasing must lie at the intersection between personal growth, industry growth, and data analytics. International Business Machines Corporation, also known as IBM, is the upcoming leader of this new era of learned systems, where technologies will be able to gather and understand data to represent it to be understood. Aspiring individuals and healthy industries will find it necessary to incorporate this new perspective on data to sustain their growth goals. I believe IBM will be the most influential sculptor of the healthcare landscape in the upcoming years.
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CHOICE
value statements / context / key insights
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“Dedication to every client’s success.” “Innovation that matters for our company and for the world.” “Trust and personal responsibility in all 1 relationships.” 17
industry presence CONTEXT IBM has always been an agile company when considering moving their value proposition into new profitable markets. In the past century, IBM has shifted its business from hardware to software, from hosting to consulting, and from maintaining IT systems to creating nanotechnologies. Their outlook on business has always been to move into sectors they can add value to, even when everyone else sees it as an over reach. IBM knows the benefit of a fresh perspective entering a new industry so they continually on adding their third-party value in every market possible. The long list of their industry offerings are as follows1:
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• Aerospace and • Government Defense • Healthcare • Automotive • Insurance • Banking • Life Sciences • Chemical • Media and • Communications Entertainment • Consumer Products • Metals and Mining • Education • Oil and Gas • Electronics • Retail • Energy and Utilities • Travel and • Financial Markets Transportation
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healthcare KEY INSIGHT IBM is uniquely positioned by to accelerate the healthcare industry because of its ability to gather invisible data and analyze it into a plan of action. This unique focus will integrate disruptive technologies like enterprise cloud computing and cognitive systems, resulting in a exponential rate of growth in healthcare capabilities. Industry and individual growth are the pivotal drivers of transformation; they both seek to offer the most value they can by nurturing their respective authentic selves.
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data
IBM Healthcare
individual
industry
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ANALYSIS
key partners / key activities / value proposition / customers and consumers / customer relationship / customer segment / key resource / distribution channel / cost structure / revenue stream
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lifestyle
performance
institution
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key partners IBM’s largest medical offering, Watson Health, is becoming integrated in three pivotal aspects of healthcare; institutional, performance, and lifestyle. Some of the larger companies that have partnered up with IBM in the past year are Memorial Sloan-Kettering, American Heart Association, and Under Armour. Memorial Sloan-Kettering and IBM Watson are connecting to tackle one of the most challenging healthcare sectors, cancer. Watson is intended to become an invaluable physician advisor, offering precise secondary opinion on complex illness discovery and delivery procedures.2 American Heart Association (AHA) and Watson have partnered up to attend the growing problem of workplace wellness. The AHA will be using Watson to better measure workplace health culture via questionnaires.2 Under Armour (UA) will apply Watson ability to compute invisible data that is collected via their UA Record app. This is intended to generate personal recommendations and coaching for their users so they can perform at their highest potential.2 IBM continues to partner with company giants like Apple, Johnson and Johnson, and Medtronic.2 The reach of Watson will continue to grow as it is introduced to mobile and home platforms.
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key activities In short, IBM’s key activities in healthcare are to be the leaders of reference value. Patients, physicians, and the companies that support them will be looking towards IBM for the answer to any question they have. The ecosystem that enables their ability to know include artificial intelligence, computing data, and blockchain security. Alongside Watson Health, IBM has developed their very own Blockchain infrastructure that offers their clients secured, private transactions.3
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value proposition IBM defines their value offering thusly; • Dedication to every client’s success. • Innovation that matters - for our company and for the world. • Trust and personal responsibility in all relationships. It is clear that IBM is in the business of reference value. They are expanding their reach with Watson to all corners of healthcare in an effort to cultivate growth in industry and individual. IBM’s value proposition is to become the top of mind reference for any question we have.
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customer vs. consumer I believe it is important to discuss the differences between customer and consumer at this stage of IBM’s business model investigation. The healthcare industry has an interesting dilemma, the customer and the consumer often have conflicting ideas in regards to innovation within healthcare. A customer of the healthcare system can be a doctor, nurse, specialist, the hospital itself, or any other professional working to provide a service. A consumer of the healthcare service are the patients, communities, and sometimes healthcare providers when in the right context. In light of completing a business model canvas with integrity for IBM, I will focusing my research on its influence with their customers, not their consumers.
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customer relationship IBM’s customers are looking for answers for any question they have; they want to know why something is, and how they know that this is right. That is an enormous expectation to have. IBM has to create a relationship built on trust and support to be successful. Such a friendship with their clients can be monetized because IBM is offering a service like no other, the answer to your most pressing question.
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lifestyle
performance
institution
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customer segment IBM’s presence in healthcare is creating value for three separate pillars of health; institutional, performance, and lifestyle. Each have an important role in improving their users to their individual highest potential. The most valuable customer at the moment seems to be institutional health. In the last year, it has been reported that IBM Watson Health will be collaborating with over a dozen American cancer institutions.2 This number will continue to grow as more players in the healthcare industry intend to grow their capabilities.
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key resource It is clear that IBM’s key resource is Watson. He is the forerunner of the cognitive era, the next step beyond the digital age. The most obvious application of such a developed artificial intelligence is in healthcare, but this resource will grow into surrounding markets and possible create new ones. Watson is already penetrating into healthrelated sectors like Under Armour, and will continue to expand its knowledge of value offering.
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distribution channel IBM is an advocate for advertising the possibilities of its value offering rather than its capabilities. Ginny Rometty, IBM’s current chairperson and CEO, has great presence at every global health conference to commend the Watson team on their work and offer the possibility of collaborating with any interested party.4 This is their most important channel of distribution because it targets the largest players in any industry.
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cost structure In healthcare, the three largest expenses are; insurance, medicine, and research. Upkeep of a medical institution is also a large factor, but that aspect of cost is the most rigid in terms of value. Salaries of healthcare providers are predictable and constant, whereas insurance of a procedure is wildly disputed and variable. Here in Canada the healthcare system is publicly funded, which makes point of use care mainly free and has most services provided by private entities.5 Our neighbours to the south have a healthcare residing in the private sector, which enables each privately owned business to adopt emerging technologies faster than in Canada.6
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revenue streams IBM’s clients seek one thing from them, to be the answer to any question they have. They are delivering on this value proposition by breaking down their service into five areas of revenue; analytics, cloud, mobile, security, and social. After reviewing IBM’s third quarter financials of 2016, released on October 17th 2016, they report a $19.2 B Revenue in the last quarter and a $12.9B Free Cash Flow in the last 12 months. These numbers are an aggregate of their earnings from every industry venture they are participating in, not just in healthcare. But, there the importance of reporting a $12.9B FCF means that this money can be heavily invested in research and development of Watson Health.7
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CONCLUSION resolution / summary / beyond healthcare
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KEY PARTNERS
KEY ACTIVITIES
VALUE PROP
Memorial Sloan Kettering
Artificial Intelligence
American Heart Association
Computing Data
“Dedication to client’s succes
Welltok Under Armour
Blockchain Security Illness Discovery Healthcare Delivery
“Trust and pers responsibility i relationships.”
KEY RESOURCE
Reference Valu
Machine Learning
Cultivate Clien (Individual + In
Novo Nordisk Nutrino Boston Children’s Hospital Trial Technologies Spare5 Teva Pharmaceuticals Mayo Clinic Epic
COST STRUCTURE Insurance Medicine Research
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“Innovation tha for our compan the world.”
Automated Reasoning Natural Language Information Retrieval Represent Knowledge
Create Tools to Industry
POSISTION
o every ss.�
at matters ny and for
CUSTOMER RELATIONS
CUSTOMER SEGMENT
Support
Institution
Trust
Performance
Service
Lifestyle
sonal in all
ue
nt Growth ndustry)
o Augment
CHANNELS Healthcare Providers Insurance Providers Innovation Startups
REVENUE STREAMS Analytics Cloud Mobile Security Social 41
summary Overlooking the business model canvas of IBM’s role within healthcare, I can extract one thing. Watson Health will become the most sought after piece of technology we have ever seen by any large player in healthcare. Watson will be entering our lives in medical institutions, performance companies, and lifestyle brands. He will bridge the gap of second opinions, optimal coaching, and healthy recommendations bringing another level of depth to our lives. Watson is here to cultivate growth on and individual scale as well as an industrial one. He is making every person an expert in whatever they put their effort to.
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beyond healthcare As I have shown before IBM has presence in 18 other global industries, making them a behemoth company with enormous influence in every sector they play in. IBM Watson Health is not the end of the road, rather it is the beginning of a new era, the era called cognitive. In a connected internet of things, data transfer will become increasingly more important, and IBM will be there with Watson. Today, Watson is present in medical institutions reimagining and reinventing the way we discover and deliver medicare, tomorrow Watson will be in our homes and our pockets answering any question we have for him. IBM will be the ultimate reference archive with actionable information in the world.
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bibliography IN-TEXT CITATIONS 1 IBM. “Our Values at Work.” IBM. Accessed November 01, 2016. https://www.ibm. com/ibm/values/us/ 2 Pai, Aditi. “Roundup: More than a Dozen IBM Watson Health-related Partnerships.” MobiHealthNews. February 09, 2016. Accessed November 01, 2016. http://www. mobihealthnews.com/content/roundup-more-dozen-ibm-watson-health-related- partnerships. 3 ”Transform Your Business Networks with Blockchain.” IBM. Accessed November 01, 2016. http://www.ibm.com/blockchain/. 4 IBM. “Ginny Rometty Keynote at the World Health Care Congress.” Online video clip. Youtube. Youtube, April 13 2016. Web. October 25 2016. 5 “Health Care in Canada.” Wikipedia. Accessed November 03,2016. https:// en.wikipedia.org/wiki/Health_care_in_Canada. 6 “Health Care in the United States.” Wikipedia. Accessed November 03, 2016. https://en.wikipedia.org/wiki/Health_care_in_the_United_States. 7 Schroeter, Martin. “IBM REPORTS 2016 THIRD-QUARTER EARNINGS.” IBM. Accessed November 3, 2016. https://www.ibm.com/investor/att/pdf/IBM-3Q16-EarningsPress-Release.pdf.
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bibliography IMAGE CITATIONS 1 https://s-media-cache-ak0.pinimg.com/originals/46/bd/4e/46bd4e0b18fd44f4058 0c0502c32793b.jpg 4 http://assets.yesstud.io/visualartists/cache/visualartists-4549-w1380-h900-q90- rz3-b75.jpg 11 http://cargocollective.com/ericfrommelt/IBM-Pure-Data 14 http://www.artligue.fr/uploads/works/4de4eee8eb39aab9c1d5f0bd9b73f4df_th5. jpg 22 http://potd.pdnonline.com/wp-content/uploads/2012/10/Marcel_Christ_Powders_ Colours1.jpg 28 https://www.clipartsgram.com/image/1816616707-banner2000x8001.jpg 38 https://s-media-cache-ak0.pinimg.com/originals/5a/db/9d/5adb9d48ff3b0b49e921 9278b304d71f.jpg
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