An important consideration for any business is to think about whether or not its business model is effective. Presumably, any business will have at least a somewhat effective business model because if they did not, they will not be able to stay in business for long. How does the concept of business model impact project management? Let’s take a look.
What is a business model? A business model has several parts but at its core is a value proposition to customers. That value proposition needs to include an offer of goods or services to customers that will improve their lives in some way over and above what they pay for the product or service. The business model also includes many operational aspects behind designing, building, and delivering the product or service in an economical fashion.
So why is the concept of business model important to project managers? It is important that project managers are cognizant of their company’s value proposition. In some tangible way, any project should align with at least some aspect of the company’s value proposition. Here are few examples:
- A project that is geared to cut manufacturing costs exists in support of a lower cost structure that forms a part of the business model.
- An R&D project speaks to the company’s core skill of being able to develop a pipeline of innovative products on a regular basis.
- A project to add a new product line that is complimentary to an existing product line adds to the value proposition to customers
This list could go on and on, but the point is that all projects, somewhere along the line, should contribute in some way to the business model of the company.
Business models are not particularly static. Companies need to adjust to industry conditions all the time. In so doing, they are tweaking and sometimes even drastically changing their comapany’s business model. At the edge, where all of this change happens, are projects that are developed and set-up to implement the strategies that support the evolving business model.
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John Reiling, PMP
Project Management Training Online
Lean Six Sigma Training Online
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