An Analysis of Advanced Business Models in IT sector

Abstract

IT industry made a major stride in the latest decade: there appeared new technologies, such as robotization of processes, artificial intelligence or machine learning. So, the companies have been encouraged to continuously improve their technologies, combine them with internal processes, and set up operational control, all this effort being on amidst the continuous change. The article is focused on investigating business models of IT companies. The essence of the notion “business model” is elaborated. It is substantiated that a business model constitutes the company’s potential, its commercial partners required for product creation, promotion and supply to a targeted audience; the relations with customers and the investment required to generate a sustainable stream of revenue. The main types of business models operating nowadays on the IT market are analyzed. It is shown that now the majority of companies in IT sector use the already existing business models that fit best to their needs and have been tested by practice, by adapting and updating them according to their individual specifics and competitive advantages. It is stressed that the mainstream operation mode of IT companies in Ukraine, Eastern European and Asia is outsourcing. The current tendencies in IT companies’ development, which have impact on the choice of a business model, are outlined. The principles relied upon by IT companies in the business model building are highlighted. It is stressed that the human resource is the primary one in IT sector. Ukrainian IT professionals are demanded by the global market, especially in European countries and U.S. The human resource in IT sector has to be treated from two perspectives: as a means of production, i. e. human capital (skills, competencies), and as intellectual capital that can take the form of product or service. Considering the above, an IT company needs to possess updated (in terms of the properties of the exploited resources) technologies/tools for the effective processing of resources. This has to be necessarily born in mind when making the choice of a business model that should help develop and increase the life cycle of the human resource through changing professional specialization, activity type, field of knowledge, with opportunities of acquiring new skills and competencies opened for company employees.

Keywords

• outsourcing, it company, it industry, product business model, service business model.