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School of Business | Department of Management and International Business | SME Business Management | 2011
Thesis number: 12679
MODEL FOR NETWORKED BUSINESS: Case study of Application Service Provider's network
Author: Pesonen, Tero
Title: MODEL FOR NETWORKED BUSINESS: Case study of Application Service Provider's network
Year: 2011  Language: eng
Department: Department of Management and International Business
Academic subject: SME Business Management
Index terms: pk-yritykset; smes; liiketalous; business economics; verkostot; networks; mallit; models; ohjelmistot; software; palvelut; service
Pages: 96
Full text:
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Key terms: social capital; network business model; network governance; business networks; application service providing; software as a service
MODEL FOR NETWORKED BUSINESS Case study of Application Service Provider's network

The aim of the research was to create a network business model to optimise benefits for a business network in the area of software industry.

The main research questions were: ? What kind of network business models can be found? ? What are the value creation mechanisms as well as advantages and disadvantages of different models? ? How to use former frameworks to develop a network business model for application service providing business?

The theoretical framework for business networks and their performance was created using multiple research traditions. The traditional economic approaches such as Transaction Cost Economics (TCE) acknowledge the contractual and monetary aspects whereas the approaches based on sociology such as theories on social capital and network governance include the impact of human factors. This foundation helped to form the network business models and the related variables. The created business models differentiate most of all on business logic.

The used research method was constructionist case study. A network business model using dual business logic was applied to the case business network. The empirical material was gathered using five semi-structured theme interviews. The interviewees were in key positions in the three companies involved in the business network in question. The collected material was evaluated in accordance with the theoretical framework in relation to business models, social capital and network development stage.

The case study revealed four required content dimensions in addition to the dimension of time in order for a business network to operate. The network shall provide economical sense for all participants. All network members shall present sufficient business performance. Business model is required to formalise the common understanding of the economical sense and the business performance. Social capital between members enables use of the business model as a tool as well as supports the network to adapt when required. Further attention needs to be given to the processes related to the network development stage.

It is very challenging for a business network to succeed. The case business network was terminated although the developed network business model seemed feasible. The shortcomings in social capital and doubts regarding business performance outweighed the possibilities for economical sense as well as application of the business model.
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