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Designing a business model

Business model designers must identify the skills required by the company and used as a basis for designing the business model. The value configuration used to produce and provide products to the customer describes the activities that will be needed to operate the business.

The roles of these activities indicate that the business functions will be required. These functions are the tools an manager can use to identify the skills, expertise and human resources that will be needed to operate the business. The business functions necessary to operate the business can also help build an efficient manager of the organizational structure of the grouping of functions related to the organizational units to facilitate monitoring and control. For example, purchasing, inventory management, manufacturing, packaging and functions can be grouped and supervised by a Supervisor of Production. Marketing, sales and distribution functions could be grouped under a Marketing Supervisor. Book keeping and accounting could be combined under one Director of Finance.

Fundamental organizational functions and competencies

Businesses and nonprofit organizations require many skills that cover a range of activities (production, purchasing, marketing, distribution, etc.) in order to function. Certain fundamental skills required by all organizations in order to function effectively and carry out its mission. These skills are called “table stakes” and define the level of the organization needs to maintain operations. Some examples of these key skills and competencies required of all organizations are:

Marketing. All organizations produce a product or service to a customer and marketing is the function that creates a client payment. Without any competence in this role, the organization would have no customers. The marketing function includes the following skills:
-  Identify the characteristics of the product and service attributes to provide the benefit of the client and how to package these in the product or service offered.
-  Pricing of products and services offered including discounts, scale of fees, etc. and form of payment will be accepted.
-  Determine of how and where products and services will be offered and by whom.
-  Promotion of products and services, communication with potential customers, and selling.

Production. This function includes all the skills needed to produce the product or service to the requirements and specifications set by the organization’s marketing effort and making them available for purchase or delivery. This role requires skills in designing, testing and production of the product or the development, testing, and presentation of services offered.
- In service organizations in this role is the development and delivery of customer service.
- For organizations that produce or sell a product, this feature may include purchasing and inventory management capabilities. Depending on the scope of these activities requires the purchase can be separated into different functions.
- For distribution, retail, and food service organizations of this type should include the role of procurement and inventory management.

Human resources. The organization’s work is done by individuals and competition in the recruitment and training of employees is necessary for all organizations that employ more than one person. This function includes the following skills.
- Interview prospective employees and managers.
- Recruitment and indoctrination employees and managers.
- Determining the compensation for employees and managers and provides the process to pay employees and managers.
- Identification of training managers and employees are required to perform their jobs and provide or arrange to provide such training.
- Review employee and manager performance and individual performance ineffective.

Administrative. This is a capture all function, which includes all customer service, billing and paying bills, answering phones, maintenance and repair facilities, etc. Since these features tend to be relatively routine are likely to be a source basic skills within their facilities and customer service to make a significant contribution to the perceived benefits to the customer. Examples are hospitals, schools, and marketing organizations. In these cases, these activities can be expanded in different functions.

Accounting and Bookkeeping. All organizations must record and supervise the organization of income and expenditure and most people must prepare periodic financial reports. At a minimum, all organizations must be able to record and classify these operations constantly. It is common for nonprofit organizations to recruit specialists in such functions and powers are not likely to be a source of core competency.

Payroll. Companies need people to do the job and these people should be paid. All enterprises must record the hours that workers provide to the company, the wages they are entitled to receive for their work and wages due to employees. This includes the payment of salaries and wages and payroll taxes that are required by law. In general, nonprofit contract specialists and this is unlikely to be a source of core competency.

All nonprofit organizations need to raise funds and require an additional function to do this. This function includes the development of competence in the matter to the cultivation of potential donors and supporters, making “the ask”, the planning and execution of fundraising events, donor recognition, etc.