Business Model Flexibility and Software-intensive Companies: Opportunities and Challenges

Abstract

Background: Software plays an essential role in enabling digital transformation via digital services added to traditional products or fully digital business offerings. This calls for a better understanding of the relationships between the dynamic nature of business models and their realization using software engineering practices. Aim: In this paper, we synthesize the implications of digitalization on business model flexibility for software-intensive companies based on an extensive literature survey and a longitudinal case study at Ericsson AB. We analyze how software-intensive companies can better synchronize business model changes with software development processes and organizations. Method: We synthesize six propositions based on the literature review and extensive industrial experience with a large software-intensive company working in the telecommunication domain. Conclusions: Our work is designed to facilitate the cross-disciplinary analysis of business model dynamics and business model flexibility by linking value, transaction, and organizational learning to business model change. We believe that software engineering tools and methods can play a crucial role in enabling more automated synchronization between technology and business model changes.

Keywords

• business flexibility
• digital business modeling
• equivocality
• learning organization