Insights from a Finance Business Partner Business Model (Strategy)

One key aspect of business strategy is to have the right business model. Business model represents how an organisation creates, delivers and captures value.

There are different ways to understand and present business model, one of which is Business Model Canvas.

A Finance Business Partner is an enabler of business strategy and in many ways also contribute in setting business strategy. Thus is it important to understand the business model of the organisation.

Deeper Look

Business Model canvas has three main areas: Value proposition, Customer side and Resources side.

• Value Proposition : This is the most important aspect of the business model as it defines the product or services the company delivers to create value for customers. If you look deeper you will realise that it is mostly based on the assumptions regarding customer and their preferences which may change overtime based on innovation, competition, etc..

Customer Side focuses on 3 quadrants -

• Customer Segments : who are the customers ? Mass market or a specific niche ?
• Customer Relationships : what type of relationship the business establish with customers ?What it does to have good relations with customers ?
• Customer Channels : How business delivers value proposition to its customers ? For e.g website, app, etc.

Resources side focuses on 3 quadrants -

• Key Resources : what are the most important resources / assets ? For e.g Patent, Talent
• Key Activities : what are the core activities that make business model work ?
• Key Partnerships : Who are the key suppliers and partners that support business model ? Collaboration has become an essential component of most of the business models in today's world.

In the last are Financial Elements broken into 2 quadrants

Revenue Stream: How cash is generated. For e.g. sale of products, services, subscriptions etc.

Cost Structure: What are the major costs to operate business model

Summary

It is crucial for Finance Business Partners to understand their company business model and also the industry business model. What competitors are doing and what changes are coming in the market?

This enables the Finance Business Partner to create value for business by providing relevant insights, visibility, aid in decision making and through cost optimization.