The CANVAS model is a way to capture the business model of a company. The methodology developed by Alexander Osterwalder has positioned it as a real alternative to add value to the business ideas.
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Figure 7 Canvas model template
Canvas model consists of nine stages or fields, through which the developer has to specify the key business aspects of an activity or initiative. Summarizing, the nine Canvas fields are:
1. Customers - This stage contains a description of the people that will use the product or services. Group of persons of which the service provider obtains benefits. The value generated by the service provider should be devoted for the people described at this stage.
2. Value proposition - Define a good value proposition, in other words is try to understand the main features of the service provider that make it different from other organization. In order to understand well the value proposition of each organization, respond the following topics is an useful way.
- Innovations of the service provider
- Aspects that set us apart from other service providers
- Aspects of the service provider establish a strong link with the customers.
A value proposition creates value for a customer segment through a mixture of different elements that resolve to the needs of that segment. Values can be quantitative or qualitative, for instance: cost, innovation, design, etc.
3. Channel - channel is simply a means by which an element is shipped. According to the canvas model, there are three kind of channel with the following functions:
Communication: Used to present products and services, so that the market can assess and quote them.
Distribution: Used to give out products or services to various destinations.
Information: Used to shorten the distances that the customer must travel to reach the company, either to purchase products or services or for personalized post sales service.
4. Customer Relationship - Organizations must identify the type of relationship that they want to build with their customer segments. Also try to identify the kind of relationship that the customers want establish with us as a service provider.
5. Revenue stream -Awareness about the price that the customer pay for purchasing a service, that is to say: The way a company makes income from each customer segment.
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6. Key Activities - Knowing the key activities that add value to our brand, and learn the strategies needed to improve them. Overall activities that are critical to the service delivery. Activities are divided into three main classes:
Production: classifies those activities that are aimed at creating products in large quantities. The most important are design and manufacturing capacity.
Troubleshooting: As the name says are those activities that seek solutions for the customers. Usually, organizations that offer services are inside this category.
Platform / Network: Activities to consider by those companies whose main services are based on these resources. In this sense, the activities included in this category are those that deal with the proper operation of the platform such as maintenance, processes, data architecture, etc .
7. Key resources - The resources that are necessary to create value for the customer. They are considered an asset to the organization. According to the canvas model these resources are as follows:
Human Financial Physical Intellectual
8. Key partners - All partnerships with the third-part to strengthen our business.
Canvas model define four kinds of relationship:
Customer- provider relationship.
Relationship between non competitive organizations.
Relationship between competitive organizations.
Organizations working together in a new business
9. Cost infrastructure - This describes the most important monetary consequences while operating under different business models, a fundamental aspect whether we want get succeed. Determine the overall cost for provide service to the customer.
In this part of the memory, we will illustrate a business model of the service provider based on the concepts of canvas model. The template will be filled take as a base the services and customers defined in previous sections. So, the information written in green corresponds to the target customers and the information written in blue corresponds to potential customers who could benefit from the services offered by us as service providers.
36 Canvas Model
Item Icon Description
1 developing a given project and close once the project is finished
- Public or private entities like municipalities (smart city paradigm), oil companies and others
- Individuals (smart house paradigm)
2 Value Propositions
- We offer a distributed and fully configurable open platform of restricted computation and energy capabilities and state of the art OSs to deploy your own code in order to experiment new algorithms and protocols of WSNs. We deploy the infrastructure according to your needs- You don’t need to invest and worry about infrastructure and its deployment
- We install and maintain an efficient sensor network to facilitate your physical data needs like temperature, illumination, gasses in air, position and other physical measurements that you may need. Post-processing applications of rough data may be also designed and sold in and around from an easy to use application on your mobile phone and at an affordable and competitive price
3 Channels
- Advertising and promotion will be done through the web site of the organization. Once a potential customer has contacted the organization their agents can contact him to
- Advertising and promotion will be done through personal contacts with public and private corporations. The network will be deployed by technicians of the organization. A contact will be established for configuration setup
- The main channel for advertising will be
- Dedicated personal assistance during the setup and tuning of the network. Later, the contact will be through on-line support
- Self service. Eventually a technician can go to the house to supervise the installation
37 complexity and extension of the network to be deployed. Additional revenue stream in case of deployment of data processing applications. A pricing model has to be specified
- Subscription fees and additional fees for the duration of the service
6 Key Activities
- Deployment of heterogeneous WSN’s - Maintenance of the deployed infrastructure - Consulting
- Deployment of heterogeneous WSNs - Maintenance of the deployed infrastructure - Consulting the services to the three kinds of customers
- Engineering team (would be worthy to describe qualitatively and quantitatively this engineering team)
- Technicians team (or perhaps better to outsource this resource?)
- Agent sellers and promoters - Administrative stuff
- Financial resources. A financial plan would be needed to quantify these resources
- Infrastructure. The organization will be hosted in offices. IT will be also needed. Quantification of this infrastructure would be also important
8 Key Partners
Common for the three types of customers
- Initially it is foreseen to start the business without any partnership. The relation with the sensor manufacturers will be a conventional customer-supplier relationship but not a partnership relationship. In the future the organization may consider to establish such a relationship
9 Cost Structure
Common for the three types of customers - Staff salaries
- Offices renting, Insurances - Car fleet maintenance - Financial costs
- Buying of materials (sensors, others) - Advertising
- Network access and utilities Figure 8 Business model of the organization for which we specify the SMS
38 The Canvas model is a useful tool for defining the business model of the service provider, as well as a starting point for building the service portfolio. As the main objective of this work is to set up a service management system using the service management frameworks, the service portfolio definition is an important document defined both by ITIL and ISO/IEC 20000. For this reason, the next step is to create a service portfolio for our organization.