Cyber Physical Systems
Business Modeling
Introductory Remarks
“People tend to overestimate what can be accomplished in
the short run,
but to underestimate what can be accomplished in the long
run.”
“The past is a foreign
Arthur Charles larke
C
country. They do things
differently there.”
Leslie oles
P
Hartley
“Technology is not kind. It does not wait. It does not say
please. It slams into existing systems. Often destroying them, while
creating new ones.”
Joseph Alois Schumpeter
„The future is already
here – it is just not
evenly distributed yet.“
William Gibson
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 3
General remarks on:
Moore’s Law
Gilder’s Law
Metcalfe’s Law
Transistors placed on an
integrated
circuit are doubling every 24
months
while prices are falling.
Bandwidth grows at least
three times faster than
computer power.
The value of a telecommunications
network is proportional to the
square of the number of users of
the system (n²).
1 USD
transisto
r prices
10
fixed
network
Value of
network
Computer power
Transistors
7.0.0.0
750
2.50.0.0
Value of
network
50
75.0.0
number of
transistor
s
250
-9
2.30
10 USD
197
1980
190
wireless
network
20
Year
201
20
0
20
20
204
206
Year
208
201
Number of users
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 4
General thoughts on:
 Layered Architecture, Standardization
 Network Effects (also: Mainframes vs. PCs, Smartphones vs. PCs)
 Changing value chains and partner networks
 Business models have often to be found in an exploratory way
Smart Grid Value Modeling and Business Models | Strunz, Knab | Page 5
Case Studies
Chapter 2 agenda CPS:
Visions, Characteristics, and Capabilities
EIT ICT Labs Activities
 Smart Mobility
 Ambient Assisted Living and eHealth
 SmartSenior Business Modeling
 Smart Grid
 Smart Grid Value Modeling
 Smart Factory and Production
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 6
SmartSenior – EIT ICT Labs
Business Modeling Workshop
EIT ICT Labs Activity
Innovation is generated by applying
Catalysts to existing Carrier projects
Specific Innovation
Catalyst
Carrier
Here:
 Carrier: SmartSenior
 Catalyst: Business Modeling
€
€
EIT Funding
Co-Funding
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 8
Sensor System and Situation Recognition
Both ambient and medical sensors can be integrated using the
SmartSenior-Platform.
Sensorik und Situationserkennung
Further Partners can be integrated according to their part and depth in the
value chain.
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 10
Sensorik und Situationserkennung
Geschäftsmodell
Value Proposition
Localization in the health market
• More convenience and private security
• Recognition of
• States of windows and doors
• Lighting conditions and movements in
rooms
• Vital signs
• Identification of every day situations
• Anomaly detection
Partner Network and Ecosystem
Revenue Model: mixed resources
• Private financing
• Premium financing
• Load dependent tariffs
• Basic coverage (partially)
• Health care services(SGB XI)
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 11
Smart Senior - EIT ICT Labs Business Modeling Workshop:
On January 16, 2012 a business modeling workshop to SmartSenior
Scenarios took place.
Determination of customer profile:
Filling an Empathy Map the participants develop a detailed customer profile.
Six profile areas: feelings & thoughts, environment, perception, behavior, wishes, fears.
Conclusion with answers of three key questions: What does the customer want? What drives him?
What can we do for the customer?
Identification of product attributes and customer values:
Filling an Attribute-Value-Map the participants find out the most important atributes and features of
the products and services, and – starting from the most important attribute – to define the customer
value proposition.
The attributes and values are being clusterd and put in relationship to each other by means of
arrows.
Development of a Business Model and a Partnering Concept (Ecosystem):
Filling a Business Model Canvas the participants develop a business model. Focus of the business
model are four building blocks: value proposition to the customer, customer segments, key partners
(ecosystem), and resources.
The relationship between the building blocks was discussed in break out sessions and subsequent
adaptations allowed.
In the last steps the participants gave a statement in what role (what competences and resources)
they see themselves in the cooparative business model (value chain).
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 12
Empathy Map
Zur Methode.
Ziele:
• Entwicklung eines detaillierten Kundenprofils
• Hineindenken der Workshop-Teilnehmer in die
Lebenswelt der Kunden(gruppen)
Vorgehen:
Zu Beginn und zur stärkeren Identifikation gibt die Gruppe
dem Kunden einen Namen. Dann werden nacheinander
Ideen zu den vorgegebenen 6 Profilfeldern gesammelt:
(1)
(2)
(3)
(4)
(5)
(6)
Gefühle & Gedanken (Was bewegt den Kunden?)
Umfeld (Was beeinflusst ihn?)
Wahrnehmung (Was fällt ihm auf?)
Verhalten (Wie verhält er sich gegenüber anderen?)
Wünsche
Ängste
Die Teilnehmer notieren ihre Ideen auf Post It‘s und pinnen
diese in die entsprechenden Felder der Empathy Map.
Abschließend werden die Ergebnisse mit der Beantwortung
der drei Leitfragen zusammengefasst:
•
•
•
Was möchte der Kunde?
Was treibt ihn an?
Was können wir für den Kunden tun?
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 13
Empathy Map – Stroke Patient
Customer Profile Harald Pauli
Gedanken & Gefühle
Wie verhält sie/er sich?
Befürchtungen
Wünsche
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 14
Attribute-Value Mapping
Zur Methode
Ziele:
− Formulierung des Nutzenversprechens für den
Kunden
− Ausgehend von den Attributen des Produkt- bzw.
Serviceangebots werden die zentralen
Kundenwerte bestimmt.
Vorgehen:
1. Schritt: Wichtigste Attribute des Produktes/Services
auf Post It‘s sammeln
− Weitere, unterstützende Attribute finden
(Warum ist das so?)
2. Schritt: Vom wichtigsten Attribut ausgehend,
Kundenwerte bestimmen
− Weitere, unterstützende Werte definieren
(Wofür?)
3. Schritt: Attribute & Werte clustern
4. Schritt: Beziehungen (Pfeile) zwischen Attributen &
Werten eintragen
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 15
Attribute Value Mapping
Darstellung
Kundenwerte
Produkt-/ ServiceAttribute
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 16
Business Model Canvas
Zur Methode
Ziele:
− Abbildung eines Geschäftsmodells auf einer Seite
− Entwicklung, Beschreibung und Evaluation eines
Geschäftsmodells, inkl. Detaillierung der neun
Einzelbausteine
− Alleinstellungsmerkmal identifizieren, Erfolgsfaktoren
erarbeiten
Vorgehen:
Anhand von Leifragen werden Ideen für jeden Baustein
des Canvas auf Post It‘s notiert.
Im Workshop wurde sich auf vier Bausteine konzentriert:
(1) + (2) Beginn war die Erarbeitung des Nutzenversprechens sowie der Kundensegmente.
(3) Weiterführend wurden die Schlüsselpartner und deren
Ressourcen bearbeitet.
(4) Abschließend wurden Ideen zum Erlösmodell gesammelt.
Während der Gruppenarbeit wurden Beziehungen zwischen
den Einzelbausteinen diskutiert u. ggf. Anpassungen
vorgenommen.
Im letzten Schritt gaben die Teilnehmer ein Statement ab, in
welcher Rolle (mit welchen Kompetenzen/Ressourcen), sie
sich im Rahmen des kooperativen Geschäftsmodells sehen.
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 17
Business Model Generation am Canvas
Im Fokus: Medizinische Dienste / Sensorik und Situationserkennung
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 18
Business Model Generation am Canvas
Im Fokus: Medizinische Dienste / Sensorik und Situationserkennung
Key
Partners
Key
Activities
Value
Propositions
Customer
Relationship
Customer
Segments
Channels
Key
Resources
Cost Structure
Revenue Streams
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 19
Results
Telemonitoring
Target Group
Product
Features &
Customer Value
Proposition
• Persons with a need for continuous monitoring, e.g. stroke patients
• Confident, motivated
• Influenced by envirnoment (by physician, family, friends, etc.)
• Integrated, holistic care concept
• Modular product architecture
• Easy to use
• Zero maintenance package
• One stop shopping
• Operating company:
central exchange functionality between customer and service delivery, als well as between
service delivery among themselves.
Roles &
Partners
• Quality assurance by indepentend Auidtor and scientific advisory board.
• End2End certification of devices via hosts to the physicians..
• Insureances to be integrated in the discussion.
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 20
Impressions of EIT ICT Labs Business Modeling Workshop
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 21
Smart Grid Value Modeling
EIT ICT Labs Activity
Innovation is generated by applying
Catalysts to existing Carrier projects
Specific Innovation
Catalyst
Carrier
Here:
 Carriers:
Stockholm Royal Seaport Project
SmartGrid lab @ TU Berlin
€
 Catalysts:
Business Modeling
Innovation Radar
Test Beds, Testing Platforms, EIT Funding
Simulation Tools
€
Co-Funding
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 23
The general logic of Smart Grid Value
Modeling & Business Models
I Market exploration
a. Market roles & value
chain/network
II
Value modeling
1. Value creation through
a. Cost reduction
b. New revenue streams
III Business modeling
a. Business model generation
& business case calculation
2. Costs of implementation
b. Smart Grid applications/
concepts
 e.g. Net present value
(NPV)/ Cost-benefitanalysis (CBA)
b. Barriers & recommendations
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 24
Possible contributions to the 1st step:
Market exploration
I Market exploration
a. Market roles & value
chain/network
b. Smart Grid applications/
concepts
Possible contributions
Application of proven market exploration methods
on the emerging smart grid market, e.g.:

Scenario analysis

Stakeholder analysis/ actor profiles

Value chain/network analysis

Multi-issue actor analysis
(MACTOR, MICMAC, MASAM etc..)

Game theoretic analysis
Identification & design of innovative SG applications
Examples for known smart grid applications are e.g.
load shaping, virtual power plant, operation of e-vehicle fleet,
operation of battery park (smart storage) and many more
For details and references see backup slides.
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 25
Possible contributions to the 2nd step:
Value Modeling
II
Possible contributions
Value modeling
1. Value creation through
a. Cost reduction
b. New revenue streams
Identification of costs and benefits of a specific
smart grid applications

Overall (macroeconomic analysis)
2. Costs of implementation

For different stakeholders (Who would have which
implementation costs? Who would have which benefits?)
 e.g. Net present value
(NPV)/ Cost-benefitanalysis (CBA)
Possible methods

Net-present-value-analysis (NPV)

Cost-benefit-analysis (CBA)

CAPEX/OPEX models

etc..
The system’s high complexity requires advanced modeling techniques.
For details and references see backup slides.
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 26
Possible contributions to the 3rd step:
Business modeling
Possible contributions
III Business modeling
a. Business model generation
& business case calculation
b. Barriers & recommendations
Application of business modeling methods to
specific applications

Clear focus on business models for utilities and power
network operators as the EIT ICT Labs‘ customers

ICT solutions as enablers for the identified business models

Close collaboration with KIC InnoEnergy
Identification of barriers for capturing the identified
value and deduction of recommendations for policy
makers
For details and references see backup slides.
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 27
Thank you
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 28
Backup
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 29
Ergebnisse
Zielgruppe und Kundenprofil
Zuversicht:
- Als entscheidende Eigenschaft der Kunden wurde „Zuversicht“ identifiziert. Zuversicht
darin, dass sich der eigene Gesundheitszustand verbessern kann, oder zumindest der
Umgang mit dem eigenen Gesundheitszustand noch erreichbares Verbesserungspotenzial
aufweist. Zuversicht im Bezug auf die Potenziale und die Zuverlässigkeit von Technik und
letztlich auch die Zuversicht in eine bessere Zukunft im allgemeinen lassen den Kunden
Geld von seinem „heute“ in eine Versorgung investieren um eine kurz- mittel- und
langfristige Verbesserung seiner Lebensqualität zu erreichen.
Umfeld:
- Das Umfeld spielt bei den Entscheidungen der Zielgruppe eine wichtige Rolle. Der Rat von
Ärzten, Freunden, Bekannten und familiären Bezugspersonen spiel eine große Rolle, vor
allem auf gebieten auf denen sich die Zielgruppe nicht so gut auskennt (z.B. Medizin,
Technik). Dementsprechend müssen diese Gruppen bei der Konzeption der Dienste
berücksichtigt werden.
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 30
Ergebnisse
Produkteigenschaften / Kundenwerte
Produkteigenschaften:
Es zeigte sich, dass die Produkteigenschaften eines Produkts „Telemedizinisches Monitoring“
schwer zu Klassifizieren sind. Es wurden jedoch folgende wesentlichen Stränge identifiziert:
-Infrastruktur (Verbindung Kunde / Leistungserbringer , Abrechnung)
-Versorgungskonzept (Sinnvoll, outcomeorientiert, zertifziert, standardkonform,
mandantenfähig, integrierbar in unterschiedliche Versorgungsstrukturen)
-Hardware / Geräte (einfach bedienbar, integriert, modular)
Kundenwerte:
Die Werte für den Kunden erschließen sich vor allem aus dem positiven Effekt für die
Gesundheit, für die Gesundheiterhaltung, die Stärkung der Alltagsbewältigungskompetenz
und die damit einhergehende Erhaltung bzw. Verbesserung der Lebensqualität. Damit diese
allgemein positiven Effekte nicht geschmälert werden bedarf es darüber hinaus einer einfachen
Handhabung.
Dokumentation SmartSenior - EIT Business Modeling Workshop
SmartSenior – EIT Business Modeling Workshop
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 31
Selected Smart Energy Systems along EIT ICT Labs
Knowledge Triangle
EIT Master
Schools
MSc
European Virtual
Smart Grid Lab
Smart Energy Systems
Summer School
Schools & Camps
Education Research
Co-location
Centers
Test Beds &
Simulation Tools
Experience Labs &
Living Labs
CrossSectoral
Mobility
Business
Open SES
Experience Labs
Innovation
Radar
Future Scenarios with
KIC InnoEnergy
Smart Grid Value
Modeling
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 32
Carrier projects and catalysts,
added value
Carrier projects
 As there is often a lack of economic/business considerations in projects, every test bed, lab
and real world pilot/demonstration project may be a carrier in principle.
 This activity may be understood as the “business track” in technical research projects.
 Carrier projects in 2011: Stockholm Royal Seaport project and Smart Grid test bed @ TU Berlin
Catalysts
 Business Modelling
 Meetings, Workshops and Conferences
 Test Beds, Testing Platforms & Simulation Tools
 Innovation Radar
Added value
Bridging the gap between technology oriented research and market introduction  Innovation
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 33
Outcome and valorisation potential
Outcome
 Value of specific smart grid applications for specific stakeholders
 Business models for implementing specific smart grid applications
Potential users of the outcome
 Utilities
 Power network operators
 Electricity traders, resellers etc..
 All ICT companies that may enable smart grid applications and whose customers the
above mentioned companies are
 Entrepreneurs who may enable niche applications
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 34
Phase I: Exploration
a. Power markets & market roles
I
Exploration
II
Value modeling
III Business modeling
a. Power markets, market roles &
value network
Possible output

Description (e.g. actor profiles, value network) of power market and market roles in participating
countries; market roles e.g.: Power generator, power retailer, DSO, TSO, electricity stock exchange,
independant power producers (IPP), operator of wind farms etc.

Description of regulatory frameworks in participating countries

Description of already discussed new market roles (e.g. in Germany: metering point operator)
Possible methods

Literature review

Value network analysis (Peppard/ Rylander (2006), Weill/ Vitale (2001))

MICMAC/ MACTOR*/ MASAM analysis (Godet (1991), Heger et al. (2010), Bendahan et al. (2003))
* Matrix of Alliances and Conflicts: Tactics, Objectives and Recommendations
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 35
Phase I: Exploration
b. Smart Grid applications/ concepts
I
Exploration
II
Value modeling
III Business modeling
b. Smart Grid applications/
concepts
Possible output

Description of discussed Smart Grid concepts, e.g. load shaping, virtual power plant, operation of evehicle fleet, operation of battery park (smart storage) and many more..

Description of possible advantages and disadvantages of concepts for different market roles

Identification of potential new revenue streams, cost reduction potential and costs of
implementation of Smart Grid concepts for different market roles
Possible methods

Literature review

Expert interviews (Mayring (2002) etc..)

Case study research (Yin 2003, Eisenhard/ Graebner (2007) etc..)
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 36
Phase II: Value modeling
I
Exploration
II
Value modeling
III Business modeling
Possible output

Time series of costs and revenues from different Smart Grid concepts per market role

Net present value (NPV) of different Smart Grid concepts per market role
e.g. “the NPV of operating an e-vehicle fleet with 1000 cars over 10 years in Stockholm for the local
DSO would be XY €“

NPV of different Smart Grid concepts for third party (e.g. entrepreneur/ new market role)
Possible methods

Econometric modeling (e.g. MATLAB)

Net present value analysis / Cost-Benefit-Analysis (EPRI (2010), EPRI (2011))

Expert interviews / case study research for validation (Mayring (2002), Yin (2003) etc..)
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 37
Phase III: Business modeling
a. Business model generation
I
Exploration
II
Value modeling
III Business modeling
a. Business model generation
& business case calculation
Possible output

Qualitative: Business model ideas for different market roles, considering the elements of a business
model (e.g. value proposition, customer segments, customer relationship, channels, key partners,
key ressources, key activities, cost structure, revenue model)

Quantitative: Business cases for the most promising business models
Possible methods

Business model generation (Osterwalder (2004), Stähler (2002), Afuah (2001) etc..)

Business case calculation
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 38
Phase III: Business modeling
b. Barriers & recommendations
I
Exploration
II
Value modeling
III Business modeling
b. Barriers & recommendations
Possible output

Description of barriers for the development of identified business models
e.g. “regulation in Sweden does not allow Stockholm’s DSO to operate a e-vehicle fleet”

Recommendations for policy makers, companies, academia/ research in order to overcome the
barriers
Possible methods

Derive from own results

Expert interviews for validation (Mayring (2002) etc..)
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 39
Possible results from value modeling:
Discounted value and costs over life time
Discounted cash flows of Smart Grid application XY
NPV
= Net
present
value
NPV
NPV
Cost
reduction
New
revenue
Market
role
NPV
NPV
+
Value Costs
Power
generator
+
-
-
-
+
Value Costs
Value Costs
Reseller
DSO
+
Value Costs
Entrepreneur/
new market role
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 40
Schlüsselpartner
Systemlieferanten
Schlüsselaktivitäten
Nutzenversprechen
Lastmanagement
(durch Bezug von
Nebenzeit Strom
und Entgeld für
regelbare Lasten)
einsparen
Bereitstellen von
regelbaren
Lasten
Schlüsselressourcen
Vertrieb
IT-Infrastruktur
(Hard- und
Software)
Kundensegmente
Kostenbewusste
Kunden
Umweltbewusste
Kunden
Vertriebskanäle
Energie- Fachhandel
berater
Internet
Industrie +
GHD
Massenmailing Bestandskunden
Kostenstruktur
Kundenrabatte
Automatisiert
Energiekosten
Netzbetreiber
Last- und Erzeugungsprognosen
und Zustände
Kundenbeziehung
Ertragsmodell
IT-Infrastruktur
Einsparungen bei
Stromerzeugung
bzw. - beschaffung
Einsparung von
Kapitalkosten für
Regelkraftwerke
Lizenzierung
des Systems
Attraktivität: sehr hoch
Aufwand: mittel bis hoch
 Kurzfristig ist der Strompreis (noch) zu niedrig, aber mittel- bis langfristig steigendes
Umsatzpotential – Umsetzung sollte jetzt angegangen werden.
 Optimierung der Strombeschaffung: statt „Peak und Base“ mehr „Base“
Großer Aufwand in der Abrechnung: Neue Rechensysteme
Erfordert intelligente Steuerungssysteme für ausreichende Kundenakzeptanz
Auf einzelne Anwendungen konzentrieren?  Wärmepumpe?
Als alleiniger Nutzen zweifelhaft
Ertrag nur möglich, wenn Standardlastprofil abgeschwächt wird
validiert
zu validieren
falsifiziert
Smart Grid Value Modeling
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Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 42
Business case calculation
Estimations and calculations




Market potential & revenue estimations
Material and personnel cost estimations
Net Present Value (NPV)
Allowance for Depreciation
Analyses
 Risk analysis
 Sensitivity analyses
 Break even point
 Worst case - best case
Smart Grid Value Modeling
Acatech CPS Closing Event, U. Bub: Business Modeling | Page 43