Wikipedia

Draft:Business Model Ontology

Business Model Ontology: Platform - The Industrial Cross

Business Model Ontology (BMO) delves into the intricate workings of the enterprise economy, offering a structured description of the principle setup and way of functioning of every industrial enterprise as a systemic object and a systemic subject..[1] Business Model Ontology is concerned with the comprehensive study of the structural organization, the functioning and the necessary cognitive base of the industrial enterprise[2]. The BMO integrates various elements of economic science into a universal model, aiming to enhance understanding and management of the economy within the enterprise.

History of BMO edit

The history of BMO is marked by the progression of scientific management, initiated by visionaries like Henry Towne and Frederick Taylor in 1886, leading to subsequent waves of understanding through figures such as Walter Shewhart, William Deming, Joseph Juran (1930s - 1950s), and Joseph Orlicky, Oliver Wight (1970s-1990s), culminating in the contributions of Peter Bachvarov and Anna Videva (1997-present)[3][4].

Discovery edit

Formal descriptions of the enterprise become the building blocks for enterprise modeling. Many different business models exist; Bachvarov's and Videva's 2010 theoretical foundation[5] and their 2012 terminological foundation [6] propose a single ontological model based on the similarities of a wide range of industrial enterprises. With their business model ontology, an enterprise can easily describe all its objects, subjects, trajectories, etc. as a means for more efficient management, modeling and optimizations.[2]

BMO comprises three essential components: theory, terminology, and technology. The theory formulates a systemic understanding of all elements and processes within an enterprise as it describes the ontology of the enterprise. The terminology establishes a hierarchical system of terms for precise communication, while the technology, manifested as a holistic ERP system, encompasses and applies the theory and terminology in digital software[5][6].

Theory of BMO edit

The theory is a system of interrelated formulas covering object modeling, object trajectory modeling, technological environment modeling, partnership modeling, and industrial enterprise trajectory modeling.[5]

Bachvarov and Videva's Business Model Ontology utilizes two cognitive platforms. The Industrial Cross defining an enterprise as a systemic object comprised of the five technological systems: Supplies, Internal provision of sales, Sales, Financing, and Implementation of the technological environment[5]:30-33, and the Industrial Cognition Tree, delineating the hierarchical structure of the enterprise's cognitive base in five levels: Foundational Cognitions, Functional Cognitions, Principle Cognitions, Implementational Cognitions, Existential Cognitions[5]:34-37

Terminology of BMO edit

The terminology of BMO consists of terms and concepts that attempt to shape a scientific language to describe the industrial enterprise. The concepts are divided into different tiers with a hierarchical relationship between them[6].

The first tier within the terminology of BMO consists of basic concepts such as object, subject, space, time, environment of existence of an object, and so on. The second tier consists of concepts based on the first tier, such as process, object trajectory, or modeling. The fifth and final tier within the terminology of BMO defines the term Economy of the Industrial Enterprise.[6]

Technology of BMO – holistic ERP system edit

 
Operation in Real Time - hERP

The holistic ERP system, based on BMO, ensures efficient management through seven interconnected functional information spaces. It overcomes limiting module constructs and follows principles like integration architecture[7], intersystemicity[8], unified approach[8][9], operation in real-time[10], modeling in variants and time intervals[11], single and set management[12], and feedback.

Evolution of Business Model Ontology edit

Origins edit

The roots of Business Model Ontology are laid between the late 19th century and early 20th century, arising from the imperative need for comprehensive knowledge regarding the principles of industrial enterprise management. Visionaries like Henry Towne[13] and Frederick Taylor[14] laid the groundwork and understanding of operational modeling in the late 1800s.[3][15]

Evolution edit

The evolution of BMO persisted through successive development waves, each addressing specific gaps in knowledge related to production management, quality control, and computer-integrated modeling (MRP I and MRP II). This evolution was led by pioneers such as Walter Shewhart[16], William Deming[17] and Joseph Juran[18] between 1930s and 1950s and Joseph Orlicky[19] and Oliver Wight[20] between 1970s and 1990s.[3]

Formalization edit

In 1997, Peter Bachvarov began formalizing the Business Model Ontology theory in collaboration with Anna Videva. Together, they built upon the previous development waves and created a qualitative understanding of the principles setup and way of functioning of the industrial enterprises in an 800-page theory of Business Model Ontology.

Recent Developments edit

As of 2023, the term Business Model Ontology began gaining traction, notably propelled by the dissemination of scholarly works through esteemed platforms such as Tsinghua University[21] the European Society for Engineering Education (SEFI)[22] and the Institute of Electrical and Electronics Engineers (IEEE)[23]. This nascent surge in popularity reflects a growing acknowledgement within academic and professional circles, positioning Business Model Ontology as an emerging and influential concept. SEFI and IEEE publications have played a crucial role in catalyzing this momentum, highlighting the framework's relevance in the realms of business and engineering education.

Practical Results edit

Practical results of BMO since 2009 include large-scale industrial reengineering, lean manufacturing, quality management system implementation, and enhanced enterprise engineering.[1]:63-71. Notably, a case study (2021-2023) showcased a 50% increase in turnover, 127% in value-added, 50% in average salary, and 357% in profit over 14 months through BMO implementation.[23]

Criticism edit

Critics argue that due to the specificity of each business model, creating a universal model for the principle setup and functioning of industrial enterprises, similar to the detailed anatomical and physiological model of the human body, would be challenging, if not impossible. Instead, "as managers, we have to search for similarities in best practices" and not scientific management[24]

References edit

  1. ^ a b Stefanov, Trifon (2023). Business Model Ontology: The Basis for Digital Transformation of Economic Science (PDF). Bulgaria: ITFES Foundation. ISBN 978-619-7702-05-7. Retrieved 2 September 2023.
  2. ^ a b Osterwalder, Alexander (2004). The Business Model Ontology: A Proposition In A Design Science Approach (PDF) (Ph.D. thesis). Lausanne: University of Lausanne. OCLC 717647749. Archived from the original (PDF) on 2011-05-11. Retrieved 2010-02-25. See also: Osterwalder, Alexander; Pigneur, Yves; Tucci, Christopher L. (2005). "Clarifying business models: origins, present, and future of the concept". Communications of the Association for Information Systems. 16 (1): 1. doi:10.17705/1CAIS.01601.
  3. ^ a b c Russell, Roberta S.; Taylor, Bernard W. (2019). Operations and supply chain management (Tenth ed.). Hoboken, NJ: Wiley. ISBN 978-1-119-57765-2.
  4. ^ Stefanov, Stefan; Velev, George (2021). Digital Transformation of Economic Science: Vision for a new road in the history of the future (PDF) (Revised ed.). Bulgaria: ITFES Foundation. ISBN 978-619-7702-08-8. Retrieved 2 September 2023.
  5. ^ a b c d e Bachvarov, Peter; Videva, Anna (2011). Conceptual pillars of the Engineering Dominated Managerial Model of the Business Entity (1st ed.). Bulgarai: Foundation InjKub. ISBN 9789549274615.
  6. ^ a b c d Bachvarov, Peter; Videva, Anna (2012). Terminological system of the Engineering Dominated Managerial Model of the Business Entity (1st ed.). Bulgaria: Foundation InjKUB. ISBN 9789549274622.
  7. ^ Jung, Jisoo; Choi, Injun; Song, Minseok (2007-01-01). "An integration architecture for knowledge management systems and business process management systems". Computers in Industry. 58 (1): 21–34. doi:10.1016/j.compind.2006.03.001. ISSN 0166-3615.
  8. ^ a b Stone, Deborah L., ed. (2005). User interface design and evaluation. The Morgan Kaufmann series in interactive technologies (Nachdr. ed.). Amsterdam Heidelberg: Morgan Kaufmann. ISBN 978-0-12-088436-0.
  9. ^ Wallace, Michael D; Anderson, Terry J (1993-09-01). "Approaches to interface design". Interacting with Computers. 5 (3): 259–278. doi:10.1016/0953-5438(93)90010-Q. ISSN 0953-5438. S2CID 692247.
  10. ^ Cooling, Jim E. (2009). Software engineering for real-time systems (Nachdr. ed.). Harlow, England: Addison-Wesley. ISBN 978-0-201-59620-5.
  11. ^ Razouk, R.; Gorlick, M. (1989-11-01). "Real-time interval logic for reasoning about executions of real-time programs". ACM SIGSOFT Software Engineering Notes. 14 (8): 10–19. doi:10.1145/75309.75311. ISSN 0163-5948.
  12. ^ Render, Hal; Campbell, Roy (1991-05-01). "An object-oriented model of software configuration management". Proceedings of the 3rd international workshop on Software configuration management. SCM '91. New York, NY, USA: Association for Computing Machinery. pp. 127–139. doi:10.1145/111062.111079. ISBN 978-0-89791-429-1. S2CID 17905454.
  13. ^ Towne, Henry R. (August 1986). "The Engineer as an Economist". Academy of Management Proceedings. 1986 (1): 3–4. doi:10.5465/ambpp.1986.4976735. ISSN 0065-0668.
  14. ^ Taylor, Frederick Winslow (1998). The principles of scientific management. Mineola, N.Y: Dover Publications. ISBN 978-0-486-29988-4.
  15. ^ Schwab, Klaus (2016). The fourth industrial revolution. Geneva, Switzerland: World Economic Forum. ISBN 978-1-5247-5886-8.
  16. ^ Shewhart, Walter A.; Deming, W. Edwards (April 1967). "In Memoriam: Walter A. Shewhart, 1891–1967". The American Statistician. 21 (2): 39–40. doi:10.1080/00031305.1967.10481808. ISSN 0003-1305.
  17. ^ Deming, William Edwards (2018). The new economics for industry, government, education (Third ed.). Cambridge, Massachusetts: MIT Press. ISBN 978-0-262-53593-9.
  18. ^ Juran, Joseph M. (2004). Architect of quality: the autobiography of Joseph M. Juran. New York, NY: McGraw-Hill. ISBN 978-0-07-142610-7.
  19. ^ Orlicky, Joseph A. (1975). Material requirements planning: the new way of life in production and inventory management. New York: McGraw-Hill. ISBN 978-0-07-047708-7.
  20. ^ Wight, Oliver W. (1984). Manufacturing resource planning, MRP II: unlocking America's productivity potential (Rev. ed.). New York: Wiley. ISBN 978-0-471-13274-5.
  21. ^ Stefanov, Trifon, (范晨风) (2022). New Business Model Ontology, Examined as a Bearer of Cognitive Potential for a Historical Change in the Development of the Global Human Capital (新商业模式本体论研究) (MBA 硕士 thesis). Tsinghua University (清华大学). doi:10.27266/d.cnki.gqhau.2022.000002.
  22. ^ Trifonov Stefanov, Stefan; Trifonov Stefanov, Trifon (September 2022). "Restoring the prestige of the engineering education through a fourth engineering wave in the development of the fundamental scientific knowledge of economy". Towards a new future in engineering education, new scenarios that european alliances of tech universities open up. Universitat Politècnica de Catalunya. pp. 1670–1680. doi:10.5821/conference-9788412322262.1204. hdl:2117/385434. S2CID 257763028.
  23. ^ a b Stefanov, Stefan; Stefanov, Trifon (May 2023). "Restoring the prestige of engineering education through an engineering-led digital transformation of economic science". 2023 IEEE Global Engineering Education Conference (EDUCON). pp. 1–10. doi:10.1109/EDUCON54358.2023.10125111. ISBN 979-8-3503-9943-1. S2CID 258858989.
  24. ^ Gobalo (2016-12-02). "Are companies all different or are they the same | Marbella University". Marbella International University Centre. Retrieved 2023-11-16.

  This article incorporates text by ITFES Foundation available under the CC BY-SA 4.0 license.

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