Phil DiChiara, Managing Director, The Boston Consortium

Report
Dissecting
The
Business Model
How Consortium Collaboration Creates, Delivers
and Captures Value
ACL Institute 2011
The Canvas: Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
-Which Partnership subsets currently drive
change most effectively?
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
-Which member needs are complementary, and
which are competitive?
-Where will future externalities change the
current canvas?
These are the participants within and governance of TBC. They make the business model function by
sharing or reducing risk, adding economic scale, bring operational skills to the co-creation table and pulling
in middle managers who provide further energy around our mission.
Our partnerships include constructing new business units in service to our existing members, acting as a
repository of knowledge to facilitate system changes, sharing market information and acting as early
warning systems for new regulation or business environment changes, and provision of tools to facilitate
affirmative collaboration consistent with our mission and vision.
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
-Member dues have grown
modestly, but are we underresourcing the entity and
constraining it’s ability to more
rapidly build value for members?
-71% of costs are for human
resource
Creating and delivering value inevitably incurs costs, and are a function of investments
in key activities, key resources, project management and implementation.
Initially, TBC was cost-driven, where annual fees absorbed all costs, and any grant
resource was used to complete delivery of projects of value to a majority of members.
In recent years, we have moved to a value-driven model, where pay-to-play has
become a major force in implementing large scale, higher value programs that drive a
return on investment to participating schools.
TBC is a Problem Solving and Networking Platform:
-Twenty-three professionally facilitated Communities of Practice provide a forum for best
practice exchange, debate on current issues of interest and concern, shared project
development, potential new programs and sometimes evolution into business units.
-Multi-disciplinary fora to address larger system-thinking issues and opportunities.
-Professional Development and Training.
-Grant resources often available to lower the barrier to collaboration and reduce the first-dollar
risk for project ideas that have merit and quantifiable economic return.
-Operation of semi-independent business units to reduce member redundancy, and absent any
profit motive.
-Knowledge Management and Data Repository so to act as a vehicle for affirmative change.
Individual Pieces of the Puzzle
-Are their opportunities to
grow into areas in which we
do not currently have a
presence? Such as academic
operations like diversity or
regional recruitment?
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
Individual Pieces of the Puzzle
These are the essential ingredients to make
the Consortium work:
Key
Activities
Key
Partners
-LEADERSHIP: Board Commitment and
Active Engagement
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
-HUMAN RESOURCE: Member-school staff
awareness and involvement as encourage by
the Board.
-HUMAN RESOURCE: Trustful Relationships.
-FINANCIAL RESOURCE: Adequate dues and
grant support, in appropriate balance.
-INTELLECTUAL RESOURCE: Our growing
base of shared knowledge and shared
experience with our own brand of
collaboration as experienced over the past
fifteen years.
-TIME for Reflection and subsequent
commitments of energy over time to enact
changes that a majority agree upon.
-Are we utilizing
these resources with
maximum
effectiveness?
-
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
-Can we expand the value
proposition by adding new revenue
streams to TBC that will offset cost
increases elsewhere?
-Will our value proposition be
threatened by the changing economic
environment within HE?
-The value proposition is why members stay active and how they receive benefit from participation
in the Consortium and its activities.
-Specifically, for the cost of membership, Boston Consortium members receive opportunities to
leverage mutual scale, learn from the knowledge and experience of others, co-develop programs of
mutual benefit, , customize products and services to the collected needs of our members, and adapt
more quickly to changes in the external environment.
-The scale of any one of our fifteen members may no longer be adequate to individually solve the
problems that are being presented in the marketplace, the regulatory environment or the financial
circumstance of the times.
-As a safe space for experimentation, the Consortium has the ability to challenge the status quo in a
in a manner that minimizes risk and reputation.
Relationships are the primary currency of Consortium exchange.
-Communities of Practice are the basic building block by which relationships evolve. The ‘safe space’
that is the consortium allows members to engage in candid exchange of problems and ideas, with an
eye to viewing the world beyond their own organization’s limitations. Competition for the best idea is
often satisfactorily replaced with co-creation of mutually advantageous solutions. Some problems
cannot be solved within the confines of a single operational entity….
Individual Pieces of the Puzzle
TBC historically
attract innovators/
early adopters. Can
we do more with
majority?
Key
Activities
Key
Partners
Relationships
Value
Proposition
Customer
Segments
Key
Resources
Cost Structure
Channels
Revenue Streams
Are non-member
schools a new channel
to meet our member
needs e.g. Co-HIP?
Channels are how we deliver the value proposition:
-At the most elemental level, Dialog, debate and deliberation at meetings of the various communities of
practice, plus materials documenting activities and intentions comprise an initial channel.
-Co-created Projects emerging from these communities, as well as programs, are a second channel.
-The highest expressions of value delivery are found in the Major Initiatives and Shared Business Units
which culminate with new systems that began as good ideas, and end as practical, operating realities.
Relationships are the primary currency of Consortium exchange.
-TBC facilitators aid in accelerating discovery of common ground and construction of new problemsolving tools by carefully channeling dialog for optimal productivity, by removing logistical barriers to
effective meetings, and offering external resources such as grant support.
-Consortium activists are offered a significantly wider view of activities within a given Higher Education
domain, so as to compare their processes against other schools with other cultures. Over time, work
processes become distinct from cultural artifacts relating to style, internal historical precedent, and
even organizational myth-making.
-Learning opportunities are created naturally, without artifice, and the lessons are tested and reinforced
by intense Group Process.
-A generosity of spirit takes hold that enhances both the intellectual exchange and the professional
fulfillment related to inclusion in a group of productive and engaged colleague professionals.
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
Individual Pieces of the Puzzle
Is Crossconsortia
collaboration the
next
opportunity?
Key
Activities
Key
Partners
Relationships
Value
Proposition
Customer
Segments
Key
Resources
Cost Structure
Channels
Revenue Streams
Channels are how we deliver the value proposition:
-Knowledge transfers from the Communities of Practice back into the
member schools.
-Actionable initiatives such as Major projects and programs (HMI,
Procurement Marketplace, Co-HIP) translate learning and new knowledge
into programs, and business units.
-Reports, data collections, documents, consultative analysis, external
networking and dialog all inform our thinking beyond the walls of an
individual institution.
-Transfer of funds from grants to form “venture capital for good ideas.”
-Leveraging scale from participant schools
Consortium Customer Segments are the common needs
of a smaller few, and distinguished as a functional
subset of the fifteen member whole….
-Not every member has identical needs that support a shared
solution, but when four or so do, a core group of schools may
form to provide a central or shared solution. Collaboration at
TBC is NOT about fifteen schools doing the same thing or in the
same way.
-Problem identification and common research needs can be
scaled and leveraged so that the learning curve is shortened
and time-to-solution minimized.
-Cost structure vary from school to school, so the attractiveness
of a given solution might require significant adaptation within a
single school, but leveraging common ground avoids some
redundancy while maintaining focus on forward progress as
driven by a collaborative social enterprise like TBC.
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
Should we
consider
inclusion of NFPs
like the Museum
of Fine Arts,
Kennedy
Institute, etc?
Individual Pieces of the Puzzle
Key
Activities
Key
Partners
Key
Resources
Cost Structure
Relationships
Value
Proposition
Customer
Segments
Channels
Revenue Streams
For TBC revenue are comprised of dues, grant
funds, income from non-member participation and
very modest interest income. Dues reflect a debit
to the beneficial revenue stream Consortium
initiatives must drive to the members. Revenue to
TBC minimizes annual dues increases or provides
added resource to support new investments in
activities that benefit the members.
Revenue Streams come to both the Consortium and to the Member Schools
Member Schools are provided revenue streams in several different ways:
-Cost Avoidance: More efficient systems, eliminations or reductions of
redundancy, lower unit costs by aggregated procurement.
-Cost Savings by In-sourcing common administrative tasks, where lowered
cost and lack of any profit incentive compare favorably to the external
market.
-Minimization of start-up costs or operating costs for shared programs.
-Risk Reduction by spreading/sharing the risk of innovation, and lessening
the first dollar cost of risk by careful use of grant funds.
-First-mover or empirical learning risk reduction suggests that we need to
avoid the mistakes of others. TBC acts as an early-warning system for
regulatory and other external dynamics.
Operational Cost Reduction Initiatives by Category
$ Potential
Learning Requirements
High
Industry Comparable Action
Innovation of New Systems
•Limited innovation, but optimal capture
of current best practice
•Example: Active Communities of
Practice comparing notes routinely
•Key Driver –Consortium Staff
Resources
•Missing Element: Adequate
encouragement by governance
•The core of most Consortium activity.
•New paradigm, maximum scale
•Potentially transformational
Key Driver – External Forces and Board
Willingness
•Missing Element – Courage or crisis
•This is the holy grail of consortial
accomplishments
(2)
(4)
Individual School Unilateral Action
Cross-Institutional Search for
Complementary System Adaptations
•Economic Scale limited to intraorganizational size.
•Usually transactional
•Tendency to favor temporary reduction
Maximize scale of existing paradigm
Example: Co-sourcing otherwise redundant
operations
•Key Driver – Division VP support
•Missing Element – Participant Dedication, time.
Low
(1)
Low
(3)
Innovation
Inter-organization leverage
High

similar documents