Leveraging Business Models and Operational Frameworks in Technology Organisations

Large organisations need to integrate different business models and operational practices to stay ahead of the competition. Particularly in technology, using these business models alongside frameworks like ITIL (Information Technology Infrastructure Library) and Lean can help companies work more efficiently and innovate rapidly. These models and frameworks provide a structured approach to managing technology while offering the flexibility needed to adapt to ongoing changes. In this blog, we explore how the top 20 business models can work effectively with IT practices to enhance performance, scalability, and reliability in a technology-driven environment.

1. Subscription and Freemium Models: Improving Services Over Time

The subscription and freemium business models are widely used for software services like SaaS (software as a service). Within ITIL, these models align well with Continuous Service Improvement (CSI), ensuring that customers receive regular updates, new features, and quick resolutions to issues. Lean methods can make these subscription services more efficient by eliminating waste and optimising the delivery of value. Lean also focuses on customer feedback, encouraging regular improvements that keep users satisfied. This cycle of feedback and refinement ensures that services evolve to meet customer needs, maintaining satisfaction and loyalty.

Lean also supports continuous testing and incremental updates, essential for keeping services stable while adding new features without disruptions. For instance, subscription services can benefit from Kaizen, a lean practice focused on small but continuous improvements, to consistently enhance the customer experience.

2. Marketplace and On-Demand Models: Better Service Design

Marketplace and On-Demand models are popular for platforms connecting multiple service providers. Leveraging ITIL’s Service Design phase, these models help companies integrate third-party services in a way that aligns with customer requirements. Lean practices ensure these third-party services are added without extra, unnecessary steps. Lean’s Just-in-Time approach helps reduce delays, ensuring services are delivered exactly when needed and keeping customers happy.

By employing ITIL’s Service Level Management, companies can establish clear expectations with third-party providers, ensuring all services meet agreed-upon standards. This consistency helps maintain high-quality offerings for customers using marketplace platforms. Lean tools like Value Stream Mapping can also help improve service flows, making it easier for customers to access services without hassle.

3. Franchise and Aggregator Models: Smooth Service Transition

Franchise and aggregator models emphasise scalability and consistency. When launching new IT services, ITIL’s Service Transition ensures that processes like onboarding are consistent and repeatable. Lean methods enhance these processes by cutting out waste, making it easier to scale franchises without compromising on quality, which is key for delivering services across different locations.

The Franchise Model pairs well with ITIL Change Management, ensuring that changes or expansions follow a set process. This consistency allows for smoother expansions with fewer unexpected disruptions. Lean’s focus on standardisation helps franchises maintain the same quality level, no matter where they operate, reducing variability and enhancing the customer experience.

4. Razor and Blade & Bait and Hook Models: Managing Issues and Building Customer Loyalty

Razor and Blade and Bait and Hook models concentrate on securing an initial purchase, then ongoing sales of consumables. In IT, this means offering regular updates and support subscriptions. ITIL Incident and Problem Management supports these models by ensuring customers receive ongoing support, fostering loyalty and steady revenue. Lean methods help identify and resolve recurring issues efficiently, building customer trust.

Using Root Cause Analysis, a Lean tool, helps determine why issues occur, enabling proper long-term fixes rather than temporary patches. Reducing the frequency of issues increases customer satisfaction and loyalty. ITIL’s Continual Service Improvement also ensures that support processes are regularly reviewed and updated to keep up with customer needs.

5. Direct Sales and Affiliate Models: Enhancing Customer Relationships

Direct Sales and Affiliate Marketing models provide a personal connection to customers. ITIL’s Service Operation supports these models by enhancing customer management. Processes such as Event, Incident, and Access Management ensure system availability and quick responses to customer needs. Lean practices remove friction from sales interactions, making them smoother and more effective. Lean Six Sigma can further improve interaction quality, leading to better customer experiences and higher conversion rates.

Direct sales benefit from ITIL Access Management, ensuring that customers can easily access the products they purchase. Simplifying these interactions through Lean practices reduces the time required for sales transactions, improving both customer satisfaction and sales efficiency, which ultimately boosts revenue.

6. Licencing and Peer-to-Peer Models: Managing Risk and Compliance

Licencing and Peer-to-Peer (P2P) models require strict governance to manage intellectual property and data. ITIL’s Governance and Risk Management helps protect the company, while Lean tools improve the efficiency of compliance processes. Kaizen, a Lean practice, can be used to continuously refine compliance procedures, keeping them effective yet straightforward.

Lean also reduces unnecessary bureaucracy in compliance. Streamlining procedures enables companies to meet regulatory requirements without slowing down operations. ITIL Information Security Management ensures that P2P interactions and licencing agreements protect both the company and customers, crucial when managing intellectual property.

7. Dropshipping and Low-Cost Models: Cutting Overhead Costs

Dropshipping and Low-Cost models focus on minimising expenses, particularly through efficient inventory management. Lean practices help reduce waste and streamline processes. Meanwhile, ITIL’s Service Strategy aligns these cost-effective models with the company’s strategic goals without sacrificing quality. Value Stream Mapping, a Lean tool, identifies unnecessary steps, making dropshipping more cost-effective.

Dropshipping also benefits from ITIL Capacity Management, which ensures that infrastructure can handle demand fluctuations without increasing costs. By using Lean’s focus on waste elimination, dropshipping businesses can optimise their supply chain and avoid overstocking, saving money while maintaining service quality.

8. Pay-as-You-Go and Microtransactions: Managing Costs and Resources

The Pay-as-You-Go and Microtransactions models work well with ITIL’s Financial Management for IT Services. These models allow for flexible pricing for cloud services or other IT resources. By using metrics, IT teams can adjust pricing in real-time, ensuring resources are used efficiently. Lean metrics help cut down on waste, while Just-in-Time Accounting ensures financial resources are allocated as needed, improving cash flow and reducing inefficiencies.

Service Measurement within ITIL is also vital for these models. By accurately measuring usage, companies can bill customers fairly and transparently. Lean’s emphasis on efficiency ensures that billing processes are smooth, reducing errors and disputes. This leads to a cost-effective, customer-friendly system.

9. Product-as-a-Service and Open Source Models: Encouraging Teamwork and Innovation

Product-as-a-service and open-source models focus on providing access rather than ownership. These models are highly effective in technology environments that require collaboration. ITIL Knowledge Management helps organise the best practices for open source projects, while Lean promotes cross-functional teamwork. Lean also helps break down silos, making it easier to manage open-source contributions and build scalable solutions more quickly.

Lean’s focus on cross-functional collaboration allows diverse teams to work together effectively, leading to faster problem solving and greater innovation. ITIL Configuration Management ensures that all changes to open source projects are tracked, making it easier to manage updates and maintain stability.

10. Advertising and Data Monetisation Models: Making the Most of Data

Advertising and Data Monetization models depend heavily on data. ITIL’s Information Security Management ensures data is handled securely, while Lean tools like Value Stream Mapping help identify where data generates the most value. Proper use of these models can improve customer targeting and satisfaction. Lean Analytics helps pinpoint key metrics, making advertising efforts more effective with better returns and less waste.

In advertising, ITIL Availability Management ensures data systems are operational so that advertising platforms work smoothly. Downtime can result in missed opportunities and lost revenue, so this is crucial. Lean’s focus on reducing delays and waste helps ensure that advertising campaigns are highly effective, maximising customer engagement and profitability.

Integrating ITIL and Lean with Business Models for an Advantage

The common link between these business models is the need for strong IT and operational practices to deliver value effectively. ITIL offers a structured way to manage IT services, ensuring each stage—from service strategy to service operation and continuous service improvement (CSI)—aligns with business goals. Lean helps by focusing on eliminating waste, speeding up processes, and improving quality, directly supporting these business models.

Organisations can quickly resolve recurring issues by combining ITIL’s Problem Management with Lean’s Root Cause Analysis, enhancing IT service reliability. When paired with ITIL's CSI, Lean’s focus on continuous improvement creates an environment where services are consistently refined to meet customer needs. This ongoing improvement cycle helps organisations stay ahead of competitors and adapt to market changes.

Using ITIL’s Service Level Management with Lean tools also consistently meets customer expectations. By defining precise service levels and using Lean to streamline processes, organisations can deliver reliable and efficient services, keeping customers satisfied. The combination of ITIL’s structure and Lean’s adaptability offers a solid foundation for innovation and growth.

Together, these practices help large organisations maximise their business models. They provide the agility and resilience to manage today’s complex technology challenges, delivering excellent value to customers and stakeholders. By aligning business models with ITIL and Lean principles, large companies can build an adaptable, innovative environment that keeps up with market changes and leads them. This alignment helps create a resilient business capable of managing disruptions and ready to seize new opportunities.