A Literature Review on the Effectiveness and Efficiency of Business Modeling

Background: Achieving and maintaining a strategic competitive advantage through business and technology innovation via continually improving effectiveness and efficiency of the operations are the critical survival factors for software-intensive product development companies. These companies invest in business modeling and tool support for integrating business models into their product development, but remain uncertain, if such investments generate desired results. Aim: This study explores the effects of business modeling on effectiveness and efficiency for companies developing software-intensive products. Method: We conducted a systematic literature review using the snowballing methodology, followed by thematic and narrative analysis. 57 papers were selected for analysis and synthesis, after screening 16 320 papers from multiple research fields. Results: We analyzed the literature based on purpose, benefit, challenge, effectiveness, and efficiency with software and software-intensive products as the unit of analysis. The alignment between strategy and execution is the primary challenge, and we found no evidence that business modeling increases effectiveness and efficiency for a company. Any outcome variations may simply be a result of fluctuating contextual or environmental factors rather than the application of a specific business modeling method. Therefore, we argue that governance is the fundamental challenge needed for business modeling, as it must efficiently support simultaneous experimentation with products and business models while turning experiences into knowledge. Conclusion: We propose a conceptual governance model for exploring the effectiveness and efficiency of business modeling to occupy the missing link between business strategy, processes and software tools. We also recommend managers to introduce a systematic approach for experimentation and organizational learning, collaboration, and value co-creation.open access