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Life Cycle Business Modelling ECONTECHMOD. AN INTERNATIONAL QUARTERLY JOURNAL – 2015, Vol. 4, No. 1, 17–24 ECONTECHMOD. AN INTERNATIONAL QUARTERLY JOURNAL – 2015. Vol. 1. No. 1. 21–28 Life cycle business modelling A. Chukhray1, I. Novakivskii2 1 Department of Marketing and Logistics, 2 Department of Management of Organizations, Lviv Polytechnic National University 79013, Lviv, BanderyReceived st.January 12, [email protected] 08.2015; accepted March, [email protected] 15.2015 Abstract. The article deals with the task of life cycle model of the enterprise, which should be selected business modelling. In the article the strategic individually for each enterprise. orientation of enterprises is examined from the point of According to the dominant and widespread today estimation view of its possibility to cost creation. A concept of system approach, functions of planning, problem consists in development of management organizing, regulation, motivation and control are the mechanism of the difficult mutually concerted basic, which are combined by the processes of multistage complex of tasks in industries of cost creation communication, decision-making and management. The for a consumer and cost of enterprise, as in turn laid out processes of setting goals for the future, tasks projects on the row of the recommended project measures. This defining and decision-making for their achievement in task was set forth in terms of the dynamic programming. the conditions of uncertainty – belong to the initial stage The brought analysis over of this task allowed forming of any entity activity, which depending on the level of the comfortable and transparent algorithm of her detail can be seen as a series of interrelated activities decision, and her erection in an eventual result to the aimed at making the predictions, plans and programs. Its task of the linear programming. main purpose is to analyze and identify the main trends Key words: enterprise developments strategy, and tendencies of enterprise developments, predicting of consumer value, enterprise value, dynamic program- conditions changing and factors of strategic ming, algorithm, task of the linear programming. development, creation of scientific base for the development of long-term economic policies and INTRODUCTION making efficient solutions for its implementation. Strategic orientation of enterprises in recent years is If to treat the business model as a management taken into consideration from the point of view of the concept to create value for customers and society as well enterprise ability to create value. Such business theorists as enhancement of enterprise value based on existing and practitioners as Osterwalder A., Yves P. (2002), key competencies and chosen strategic set in order to Jansen W.,Steenbakkers W., Jäegers H.(2007), Chesboro achieve the goals, than in order to ensure sustainable G. (2008), Debalak D. (2009), Dzhonson M., Kristensen (balanced) enterprise development – there should be the K., Kagermann Kh. (2009), Casadesus-Masanell R., balance between two strategically important concepts Ricart J.E. (2010), Jabloński M (2011) [1-13] are (lines) of the enterprise development [14]: looking for specific factors and models that distinguish • creating value for customers, those companies, which consistently achieve success • creation of enterprise value. and those which managed to get only a short-term These concepts should be cleverly intertwined, competitive advantage. To a large extent it depends on parallel initiated and implemented in real development the well designed and effectively implemented business projects. In particular, in order to create value for 18 A. CHUKHRAY, I. NOVAKIVSKII A. CHUKHRAY, I. NOVAKIVSKII consumers, a variety of the following administrative eproductive process, closing the cycle of money tasks should be coordinated: circulation in case of a successful sale of goods in the • quality of goods / services, markets. • the price of goods / services, • customers service. MATERIALS AND METHODS In turn, for the company value creation there is needs In terms of “portfolio” analysis, strategic planning to coordinate the range of design tasks, namely [15]: is seen as a building block of enterprise “portfolio”, • orientation for maximum efficiency, enabling interchange ability of tasks to performing, • orientation for maximum effectiveness, depending on the characteristics and the chosen • creation a positive image and a socially strategies. Such modular approach allows to increase the responsible company. application flexibility of the developed strategies. Thus, the set management tasks can be reduced to Therefore, the following tasks should be considered solving of two “portfolios” of the company business model. throughout the life cycle (further LC), namely phases, The purpose of each “portfolio” is to achieve internal and which are passed by enterprise from development, external competitive advantages, which can be realized in implementation and initial growth, maturity and decline. the presence of different directions of activity organization. According to the Chief Information Officer Council Both portfolios, in turn, can be united in certain “strategic (2001) Enterprise Life Cycle (ELC) in enterprise portfolio” of the business model. With such a “strategic architecture is the dynamic, iterative process of portfolio” it is possible to identify the investment priorities changing the enterprise over time by incorporating new and the basis for allocation of resources, reaching more business processes, new technology, and new efficiency of their use. capabilities, as well as maintenance, disposition and Clearly, these approaches should be mutually disposal of existing elements of the enterprise [16]., the coordinated and alternatively initiated according to the life cycle consists of the following five distinct stages possibility and feasibility of their implementation. A (Figure 1). separate problem which arises before the developers of Pre-start-up – during this period, the company business model “portfolio” of the company – it is develops and implements a new idea. In this case, sales synergy achievement between the various activities. equal zero, and the volume of investment increases with Thus, a reasonable “strategic set” of the enterprise approaching the final stage. can be formed by using the concept of management Start-up (Implementation) – sales are growing problems consistent solution as a tool to ensure the slowly. success of the enterprise for the sustainable development Growth – sales quantity, consequently, the and profits maximizing. Only in case of their develop- profit level. ment and implementation the company can fulfils its Maturity – sales growth slows down. First entrepreneurial phase Size Possible nature entrepreneurial Usually NPD strategies Sales phase Regeneration Mid-life crisis Usually time of increasing organizational rigidity Decline An era of complacency and rigidity Enterprise begins to take a Profit “past orientation” Pre start-up Start-up Growth Maturity Decline (Recession) Fig. 1. The Enterprise Life cycle LIFE CYCLE BUSINESS MODELLING 19 LIFE CYCLE BUSINESS MODELLING Systems Life Cycle Enterprise Systems Migration Engineering and Program Management Human EA Modernization Resources Process CPIC Process Operations & Maintenance Sequrity Management Fig. 2. The Enterprise Lifecycle as a concept in Enterprise Architecture Decline (Recession) – reducing of sales and Sometimes, it is advisable for enterprise managers reducing of income.The enterprise life cycle is a concept to build all models to form an overall picture in terms of in Enterprise Architecture (EA). The Enterprise different perspectives. Each approach has its “for” and Architecture process is closely related to other “against”, but in any case it is important that, after processes, such as enterprise engineering and program reaching the analytical completeness and accuracy in management cycle, more commonly known as the describing the situation, we may set the foundation for Systems Development Life Cycle. This concept aids in solving more complex problem – the formation and the implementation of an Enterprise Architecture, and management of “portfolio” in order to get the best the Capital Planning and Investment Control (CPIC) results from the use of enterprise resources. process that selects, controls, and evaluates investments ”Portfolio” of tasks concerning creating of value for [17]. Overlying these processes are human capital management and information security management. customers can be represented as a series of constant – When these processes work together effectively, the parallel their performance. In this regard, there is need enterprise can effectively manage information techno- for effective organizing and planning of tasks lifecycle logy as a strategic resource and business process performing for timely decisions management that will enabler. When these processes are properly reduce the impact of unavoidable disturbances. At the synchronized, systems migrate efficiently from legacy same time, it should be taken into consideration that technology environments through evolutionary and during the transition from one task to another – the incremental developments, and the Agency is able to relative value of alternative tasks changes. Therefore, demonstrate its return on investment (ROI) [17]. The one of the main problems, which occur within strategic figure 2 above illustrates the interaction of the dynamic management, is to predict the nature and stages
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