Methodology for the of building process integration of Business Model ...

TFS-18418; No of Pages 13 Technological Forecasting & Social Change xxx (2016) xxx–xxx

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Technological Forecasting & Social Change

Methodology for the of building process integration of Business Model Canvas and Technological Roadmap Miguel Angel Toro-Jarrín, Idalia Estefania Ponce-Jaramillo, David Güemes-Castorena ⁎ Center for Quality and Manufacturing, Tecnologico de Monterrey, Campus Monterrey, Monterrey, NL, Mexico

a r t i c l e

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Article history: Received 24 May 2015 Received in revised form 13 January 2016 Accepted 14 January 2016 Available online xxxx Keywords: Methodology Integration Business Model Canvas Technology Roadmap

a b s t r a c t The importance of linking efficiently the outputs of R&D processes with the business world has become evident. Researchers and practitioners have developed tools to help build business from a starting point (business idea/ product concept) to the description of elements that make the business possible. The Business Model Canvas identifies the essential parts of a business; it's applicability and simplicity has given it greater acceptance and dissemination. Furthermore, the Technology Roadmap is presented as a valuable tool to visualize the relationships over time of the market, technology and product strategies; TRMs allow decision makers to identify gaps between the current and the future business strategy. BMC and TRMs have been used independently of each other. This work has the objective to present a methodology of the building process integration of these two tools, to provide a business model and a technology roadmap for the business idea or new product concept that are aligned to the current and future business needs. Then, it is explained and described in a practical manner by a case of study. One of the benefits of using this methodology is that a business constructs a BMC and TRM with two different approaches giving the process the perspective of future analysis and also visualizing elements for the current business. It was found that the building integration process allows constructing a robust business strategy proposal in a structured mode taking into account the benefits of each tool and reducing the disadvantages. © 2016 Elsevier Inc. All rights reserved.

1. Introduction In a world where the changes occur so fast, a look into the future is not only an additional tool for strategic planning but an essential exercise for every company. Rohrbeck and Schwarz (2013) appointed that the early acknowledge and visionary anticipation of the technological potential play a key role in a globalized world which is characterized by the improvement of competitiveness. They also observed that ignoring changes in business environment often results in losing opportunities or failing in responding threats. For Makridakis (Godet, 2010) the role of visioning the future is to provide managers and government policy maker's different ways to comprehend the future and help them have a total understanding of possible implications of social and technological changes. The technology development and market demands accelerate changes in the world. In literature is found frequently that technology innovation is a key successful factor for performance improvement and survival of the enterprise, besides it is a determinant factor for sustainable economic development of nations and quality life improvement of their people (Keupp, Palmié, & Gassmann, 2012). According ⁎ Corresponding author. E-mail addresses: [email protected], [email protected], [email protected] (D. Güemes-Castorena).

to Rohrbeck and Schwarz (2013), firms suffer blindness caused by focusing mostly on the inside of the company and reinforcing practices that made the company successful in the past thus, it becomes evident that firms need to dedicate efforts to look outside the company and to be aware of the coming changes. For this purpose, academics and practitioners have presented different alternatives to explore the future systematically. For example, Phaal, Farrukh and Probert (2004b) states that in order that technology management benefits a business it is required effective process and systems that guarantee that the existing and potential technological resources are aligned with its needs now and in the future. On the other hand, if a firm has hints of trends that could drive future customer's behavior, and also technology development, the next stage is to envisioning the business that adapts better to those trends by using new technologies advantages. However, it is not easy to structure a business for the present scenario and it is more complicated to construct for a future scenario. The objective of this study is to facilitate to managers, policy makers and practitioners the creation of a business model for both current and future scenario. In order to achieve this objective Technology Roadmap (TRM) and Business Model Canvas (BMC) are developed in a structured manner at the same time to construct a robust business strategy proposal taking into account the pros and reducing the cons of each strategic tool.

http://dx.doi.org/10.1016/j.techfore.2016.01.009 0040-1625/© 2016 Elsevier Inc. All rights reserved.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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2. Framework The business strategy involves all the plans needed to create and deliver value to the customer. It defines: what segments the firm will attend; the means to deliver value to the segments identified; the manufacturing strategy; R&D strategy and the way the firm is presented to the public (Chungyalpa & Bora, 2015). There are a number of tools to help organizations to manage resources more effectively in order to create value and explore the future, for example Pillkahn (2008) uses these tools for strategy development. According to Ringland (2010), these tools are valuable not only for the outputs generated at the end of the process but for the interaction between the team members because they improve organizational knowledge. In this section, first previous integration works will be described, and secondly concepts that help forming the methodology of building the integration process will be defined. 2.1. Previous BM–TRM integration works The use of BM and TRM certainly has many advantages, but a strategic business link is missing if it is used independently. Strategic management practitioners and researchers have combined BM and TRM to achieve a more robust strategy, the combination of these tools generates a new and more powerful tool for exploring the current and the future business and their parts (Pillkahn, 2008). Following, three studies that combined these tools will be analyzed. 1. Five Porter's forces: Many authors (Osterwalder & Pigneur, 2010; Abe, Ashiki, Suzuki, Jinno, & Sakuma, 2009; Abe, Shinokura, Suzuki, Kubo, & Sakuma, 2006) have used the five Porter's forces in order to integrate BM and TRM. According to Porter (2008), “understanding the competitive forces, and their underlying causes, reveals the roots of an industry's current profitability while providing a framework for anticipating and influencing competition (and profitability) over time”. For helping construct the firm political strategy, studies based on the Porter's forces have been developed (Vining, Shapiro, & Borges, 2005), and for helping to apply the five forces analysis, Dobbs (2014) presents five templates to quantified the threats levels. 2. Abe, Shinokura, Suzuki, Kubo, and Sakuma (2006) found common parts in the generation of BM and TRM in a study named “Smart-Innovation Planning Method”. The main purpose of the study was to use the output of BM as input for strategic roadmapping (SRM). The integrated these two tools by introducing further steps at the beginning and in the end of the process to generate BM and TRM in one single procedure. The methodology consists in 5 steps: 1) combination of business ideas and database, 2a) analysis of value chain, macroscopic environment, PEST and business environment, 2b) scenario forecasting, 3a) scenario planning, 3b) do explorative roadmapping using the reference scenarios, 4a) integration of result of step 3b and SRM, 4b) confirmation of target customer, product, supply method and profit model; and 5) decision making based on the valuation of factors. 3. Abe, Ashiki, Suzuki, Jinno and Sakuma (2009) reported a new business strategic planning method for the integration of BM and strategic roadmapping (SRM) named “Innovation Support Technology”. The methodology is applied using three stages: a) Product concept and business idea based on R&D outputs are described. Market and customers are pictured and determined based on this product concept and this business idea. The aim of this stage is to generate the technological scenario. b) Planning of the business scenario with two objectives: To design and to obtain the business target of the company in the future, and roadmapping the product function and the enabling technology to achieve the business target in the future. c) Contents of company technology roadmapping and discoveries through these roadmapping workshops are reflected to the business

model. Target customers, value propositions, supply method, and profit model according to scenarios are confirmed. This stage benefits to discover bottle necks through milestone gaps between layers discover, also investment timing are investigated and verified and, business strategy is evaluated. Abe, Ashiki, Suzuki, Jinno and Sakuma (2009) analyzed BM and SRM and summarized pros and cons (see Table 1). 4. de Reuver, Bouwman and Haaker (2013) developed a study on core concepts from business model and technology roadmapping. They concluded that business model roadmap obtains how operational actions and business model impacts are consistent, it means that if an organization has to choose between different business models, business model roadmapping helps to identify overlapping routes, route dependencies and points of return. 2.2. Business Model Canvas (BMC) Zott and Amit (2010) define a business model as “the content, structure, and governance of transactions designed so as to create value through the exploitation of business opportunities”. Chesbrough (2010) mentions that some of business model functions are: to identify market segment, to specify revenue generation mechanism, to define the structure of the value chain, to describe firm's positions within value network and to formulate a competitive strategy that gain and hold advantage over competitors. According to Osterwalder and Pigneur (2009) a business model is representation of how an organization creates, delivers and captures value from a product or service. BMC is a graphical approach that describes nine elements needed to define a business model (see Fig. 1). An abridged description of each element of the business model is shown in Table 2. 2.3. Technology Roadmap (TRM) Phaal et al. (2004a) define technology roadmap as a flexible technique used to support strategic and log-term planning, providing a structured relationships between evolving and developing markets, products and technology over the time. The TRM process addresses the identification, selection, acquisition, development, exploitation and protection of technologies (product, process and infrastructural) needed to achieve, maintain and grow a market position and business performance in accordance with the company's objectives. The TRM aims to support the start-up of company-specific TRM processes as: 1) to establish key linkages between technology resources and business drivers; 2) to identify important gaps in market, product and technology intelligence; 3) to develop a first-cut technology roadmap; 4) to support technology strategy and 5) to plan initiatives in the firm to support communication between technical and commercial functions. Phaal, Farrukh, and Probert (2004b) appoint that it is important that the technology strategy should not be developed independently from the business strategy, instead technological resources should be considered as an integral part of business plan. A successful TRM helps to establish a balance between market pull and technology push (see Fig. 2). According to Phaal et al. (2004a), the following factors contribute to a successfully and sustainable roadmapping initiative: - Clear business need, tangible benefits and appropriate timing for each activity. - Good architecture that reflects the structure of the organization and the issue at hand. - Strong commitment and ownership from senior management and a supporter in order to drive the process forward, perhaps supported by external independent facilitation.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Table 1 Pros and cons of BM and SRM (Hitoshi Abe et al., 2009). Pros

Cons

Business model 1. To know how to create company value from R&D outputs and provide an operation model 2. Modeling tool to create business concept from business idea 3. Help the modeling of the competitive strategy technology. How? What? And to whom? 4. Provide the service/product and how to win competition

1. Difficult to find out market trends and opportunities 2. Difficult to make a decision of invest timing 3. Difficult to judge the choice of an alternative technology 4. Difficult to know when? And what? technology should be developed

Strategic roadmap 1. Roadmaps consist of layer, such as market, business, products, technology and resources. They are systematically expressed on a time-axis of R&D outputs 2. It can be utilized as a strategy planning tool, which supports, helps to explore opportunities, permits the choice of alternative technologies, and associates the elements between layers 3. Knowledge creation for a better action: discovery of gaps, bottlenecks, technological defections, promotion of development and estimate the required resources

- Effective process manager who collects relevant information by getting multifunctional/multidisciplinary people with the expertise required to develop a well–founded and creditable roadmap. - Effective communication that ensures that the roadmap influences decision making. - Appropriate culture for supporting collaboration and sharing in the business, combined with a desired to develop and implement business process. In this study the methodology that will be used to build a technology roadmap is: a three level roadmap; using four-workshop T-plan methodology, and finishing with linking grids. These tools are used because in practice they have proved to be practical and efficient in order to construct a roadmap that fits to business profile and prospects future scenarios. Each tool and methodology is deeply described in the next subsections. 2.3.1. Types and levels of roadmaps According to Phaal et al. (2004b) identify eight types of graphical roadmaps according to the specific needs each one is a useful and recursive tool for strategic management. For study purpose, it was chosen multiple layers type, which is the most common format for a TRM for the analysis of the current and future situations related to three main levels defined by Cosner et al. (2007): market, product and resources (see Fig. 3).

1. Difficult to express a business attractiveness of R&D outputs 2. Difficult to express a business system or operation model 3. It takes more time to create and maintain roadmap under satisfying comprehensiveness 4. Difficult to evaluate business value

Market level describes current and future customer needs along with competitive strategies, regulatory environment, complementary product evolution, substitute products, disruptive innovations, and other factors. Strategic goals and market targets are often stated as milestones or target dates for certain events; Product level documents performance and product features' evolution, new-to-the-company products (including services) and new-to-the-world products, and; Technology level describes expected R&D products, their availability dates, the driving factors for the R&D, and related information.

2.3.2. Methods to construct a roadmap Studies have defined different methods to construct a roadmap, they differ on how the participants are organized. The three approaches considered are: - Central Process, where the enterprise builds the roadmap using information provided by the business unit owners. - Workshop Approach, where the roadmaps are built in collaborative sessions with the business-unit content owners, facilitated by the enterprise team. - Distributed Approach, where roadmaps are built by the individual business-unit and functional content owners in a manner that enables subsequent integration based on guidelines provided by the enterprise team.

Fig. 1. Representation of a Business Model Canvas (Osterwalder & Pigneur, 2009).

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Table 2 Elements to define Business Model (Osterwalder & Pigneur, 2009). Element

Description

Customer segment (CS) Value propositions (VP)

The organization serves one or several customer segments which are separated in order to satisfy their needs. Identification of how the firm manages to solve customer's problems and how to satisfy customer's needs. It is the bundle of products and services that creates value for a specific customer segment. Interface between company and customer. Value propositions are delivered to customers through communication, distribution and sales channels. Relationships established and maintain in each customer segment, conferring to customer segment characteristics. Description of how economic revenue is generated as a result of bringing value to customer. Resources required making and delivering value proposition, they can be physical, financial, intellectual or human. Activities that the company must do to make its value proposition and working model. Description of suppliers and partners network that helps the company optimize their business model, reduce risk and /or acquire resources. Report of all operation costs of a business model, they are calculated summarizing key resources, key activities and key partnerships.

Channels (CH) Customer relationships (CR) Revenue streams (RS) Key resources (KR) Key activities Key partnerships (KP) Cost structure (CS)

The workshop approach will be used in this study because the method promotes the team interaction, improve communication and ownership of plans within the building process. (Cosner et al., 2007; de Reuver, Bouwman, & Haaker, 2013).

2.3.3. The T-plan The T-plan is a guide developed by Phaal, Farrukh, and Probert (2004b), to create a TRM in an organization it consists in the application of four workshops; one for each level of the TRM and one more to link them all in a time chart (see Fig. 4). So as to relate the levels and direct the efforts of the company to the market pull, the T-plan uses the linking grid tool (defined in the next section), although the technology push is also considered because its aim is to generate new technology solutions.

2.3.4. Linking grids Given that, the constitutive parts of a TRM are the layers, it is recommended to develop their relation from the beginning. Phaal, Farrukh and Probert (2003) noted that “the market business drivers and product feature concepts together define a simple grid that can be used to investigate the relationships between features and drivers. The product feature concepts are grouped and their impact ranked for each market and business driver, and alternative product strategies considered (in response to combinations of market and business drivers)”. According to Phaal, Farrukh and Probert (2006) for each market driver could be one or several product features, and for each product feature could have one or several technology solutions. The TRM allows the combination of as many business and market drivers as possible and the link

with product features and technology solution all in one single chart, linking grid is performed to relate the levels in the TRM (See Fig. 5). 3. Methodology In the literature there are many tools successfully applied for strategy, innovation and business modeling and the question comes: would it be possible to join these tools — BM and TRM — to achieve the same outputs but with a different and new perspective? The aim of this paper is to present the result of a building process integration study of this two broadly applied management tools. The research approach is based in three main parts: - Literature review for each strategic tool, (BMC and TRM) and for previous studies. The aim of this part is to have a clearer idea of the key concepts and to establish the state of art for the integration tools, which were discussed already. - Create a methodology that integrate both (TRM linking process and BMC integration process) in one single building process integration, starting with a BI–PC and pursuing the structured BMC for each time step of the TRM. - Illustration of a case of study in order to validate the methodology presented in the previous part. One of the most important contributions that this work pursues is to help envisioning future BM's in the mid and long term but taking into consideration market trends and technology changes that the TRM provides, it means, to obtain two products that are strategically aligned at the same time, and use both tool benefits to accomplish business

Fig. 2. Generalized technology roadmap architecture (Phaal, Farrukh, & Probert, 2004b).

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Fig. 3. A multilayer TRM for market, product and technology analysis (Phaal, Farrukh, & Probert, 2004b).

strategic plan. To accomplish this objective, the case of study uses the methodology described in this document to test how BM gives TRM the elements to materialize the strategic vision and how TRM gives BM the perspective of the future and their changes. The integration of the BMC and TRM is not only the integration of space and time while developing the outputs for each steps, but an amalgamation of the ideas generated. The BMC and TRM are normally presented in separated graphical representations, however, one can provide feedback to the other, and, if made at the same time, they are more valuable for managers, not only at the end of the process, but during the process, because the team debates with two different approaches giving the process the perspective of future analysis and also visualizing elements for the current business. The main inputs for the whole process are the business idea and/or the product concept. BI and PC are defined during the preparatory phase, in order to accomplish that, this study assumes that the organization already has some ideas for the new product, and with it, the task will be to develop the business model and best product development plan for the business. Therefore, the outputs of the process are two, the BMC and the TRM. The methodology is structured by one preparatory stage at the beginning of the process for establishes goals and boundaries and five different stages (See Fig. 6). The main goal is to identify the business blocks to construct the BM and the levels of (1) market, (2) product and (3) technologies of TRM in one single process across the five stages. This is possible given that the debate created among the team members can be addressed by the need to define specific outputs in the process, so that they are focused on how to build product value and bring it to the customer. This analysis is extrapolated to the future and the changes that the business would face in order to satisfy the trends that the market follows through the time. The methodology is based on the workshop approach; every phase of the methodology corresponds to a suggested one day four-hour workshop, except for the preparatory-stage (which can be performed by the business idea owner and the champion himself/herself). To

Fig. 5. Schematic of a linking grid analysis (Phaal R., Farrukh, Mitchell, & Probert, 2003).

facilitate the analysis of each stage, they are divided into topics and more specifics issues. During discussion the team will identify which “issue” would be used for construct the TRM and which for creating the BM. Some of the issues are presented using questions. These questions are answered by the team members using research and any information available. (For detailed information about the questions see Appendix 1). At the end of phases 2, 3 and 4 is suggested to generate the business strategy elements; the team will have important information to define all aspects of the company strategy. It is not the purpose of this study to develop the strategy itself but certainly the debate generated, the ideas and the cognitive process assemble the perfect scenario to define or check the firm strategy. Next, we describe each phase in detail. For each one, it is established the purpose, inputs, expected outputs, specific issues and references for further research. 3.1. Phase 0: Preparatory phase In the Preparatory phase (see Fig. 7) only few members of the team participate, especially business idea owner and/or top business managers. This phase is for defining the goals pursued (creating a new business, reinforcing an existing unit, growing the market share, etc.) It is important to define the most important issues for the new product/ business as well as having a picture of how it may look like. In this phase is defined the time frame for the analysis, meaning what period of time correspond to short, medium and long term. The managers also need to determine (a) where does the firm want to go? (b) Where are they now? And (c) how can they get there? (2003). This helps to define the horizon frame time. The expertise and knowledge of different team members is critical for success especially from top management members so as to create legitimacy (Osterwalder & Pigneur, 2010), so in this phase the team members are selected according to their qualifications and backgrounds. 3.2. Phase 1: Value proposition identification

Fig. 4. T- plan: standard process (Phaal et al., 2004a).

This phase gathers useful information to define value proposition of BM (see Fig. 8). The team identifies objectives to be pursued in the potential market (satisfy, bring to, improve or create), and they test the BI–PC using the story telling technique. According to Osterwalder and Pigneur (2010) “the goal of telling a story is to introduce a new business model in an engaging, tangible way”. Choosing the right ideas for a business starting is crucial, and giving them a pitch of reality before the implementation by telling the audience how it may work, might be very useful. This technique helps to identify the potential customers

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Fig. 6. Building Process Integration BMC –TRM.

segments, the way the firm creates value, and the way to deliver it to customers. Afterwards, the team uses the Kill/thrill session for testing preliminary ideas. Kill/thrill sessions advice about the risk of overestimate the initial ideas and recommend mitigate this risk by doing kill/thrill sessions. The aim of these sessions is to brainstorming the reason why the idea won't work (kill) and why the idea would work (thrill). These sessions are necessary to “avoid the risk of overestimation of initial rough ideas”. At this point there is available a rough idea of potential segments and is possible to determine their main characteristics (e.g. ethnographic, gender, etc.); the team can start investigating how the customer feels about the BI–PC using the empathy map — which aims to have an insight to the customer feelings, preferences and thinking — and try to keep into the process the “pain” avoided and the “gain” provided by the business´ products or services. When the team has clarified the BI–PC by using story-telling and they have understood the customer's feelings, it is possible to define what will be offered to the client and what the client expects to receive. The analysis of this relation would guide to reformulate, if needed, the BI–PC from the beginning. Finally, with the information available and with the debate and analysis during the process, the team can clearly state the value proposition offered to the customer (Osterwalder & Pigneur, 2010).

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3.3. Phase 2: Market analysis In this phase the team performs a series of analyses (see Fig. 9), which include the following: - Political strategy: Addressed to define the political environment and the strategy needed to face it. The analysis is aimed to distinguish between government actions that would threat all the firms from those that would affect some industries. The team identifies environmental regulations that would create enter barriers, regulations that affect research and development, taxation, tariff, safety health,

Fig. 7. Phase 0: Preparatory phase.

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intellectual property and general regulations policy. It is also an exploration of how the government policy is affecting the customer protection legislation, product disclosure requirements, advertising regulation, product testing for safety and health controls, and price controls (Vining, Shapiro, & Borges, 2005). Macroeconomic forces: The aim is to analyze the forces that guide the market from the macroeconomic point of view. This will help to identify market facts such as: general market sentiments, employment rate, how easy is to obtain funding, what kind of funding is available, and how costly is the funding. Key trends: The team identifies the societal trends that shift cultural values that would affect business model and the trends that might influence buyer behavior. Market forces: After this analysis the firm will be aware of the crucial issues affecting customer landscape, shifts underway and where the market is heading. The team identifies the most important market segments, and where the biggest potential growth is, what segments are declining and what peripherals segments deserve attention. Industry forces: The team should consider elements such as: competitors, shareholders, workers and government, in order to identify the competitive rivalry (Dobbs, 2014) of the industry. A SWOT analysis (Porter, 2008) is suggested to identify where the company is and how the industry forces are shaping the competition. Customer Relationships: The questions suggested in this topic are used to help shaping the strategy that creates a long term relation with the customer. Business strategy: Consists of coding market drivers, key trends, threats and opportunities, among other valuable information into the strategy. The team is ready to construct the “Market” level for the TRM. It can also serve to complement the business strategy in BM, which is incomplete so far. For a complete definition it will be needed to finish all the stages. Performance dimension: Finally, the team identifies the characteristics that the market would appreciate which will be used to translate the markets needs and trends to product specifications.

It is important to notice that, even though it is not until the last stage when the features and attributes of the product/service are identified, the team is asked to pre-define them during this phase. The dynamic for doing it, is to identify them in the value proposition phase but confirm them later with all the new information available. The BM and the TRM are constantly in review even after the process has

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Fig. 8. Phase 1: Value proposition identification.

finished in order to have all the information gathered reflected in business strategic. The capacity for bringing value to the customer is strongly related with the technology development. The technology trend analysis gives the firm hints on how the new transportation and information system, publicity, etc. are evolving. All these technologies improve the service the CH provide. We suggest identifying CH identification in this phase, but there is not enough information, so, it is suggested to return to this phase after completing Technology Phase, with the purpose of clearly define them. 3.4. Phase 3: Product analysis In the product analysis phase (see Fig. 10), the team studies the products that satisfy the market preferences, including: - New entrants: This is the analysis of new entrants to the industry by analyzing the differences with the own portfolio, competitive advantages/disadvantages, their value proposition and customer segments. - Substitutes: The same treatment that new entrants have to be carrying on the substitutes products: the team answers questions addressed to explore what products would replace theirs and how easy is for customer to switch to the new ones. - Product strategy: It takes into account: product key differentiators, expected price, product platform and how the product family might look like. - Identify the product: Finally the product that will be the focus of the roadmap is defined: a description of the “product brochure” including its features and attributes. To validate this, it is crucial to compare quantitatively the products attributes with the market requirements previously found. The output of this phase is positions in TRM product area, and includes elements for product strategy and, value proposal of features and attributes that the new product should have. Once the value proposal features and attributes are identified, a feedback is suggested to the value propositions phase; the team will incorporate them into the value proposition to strengthen it. 3.5. Phase 4: Technology analysis The technology analysis phase looks for the trends that would guide the technological changes, and how these changes could modify the business model (see Fig. 11). This phase analyzes the following forces and trends:

- Industry forces: The team identifies who are the key players in the value chain, and performs a quantitative analysis to evaluate the suppliers' threat level. This analysis is important for shaping the technological strategy. - Technology forces: The commodities needed for re-shaping the value proposal come into account at this stage; the team describes how the market for these technologies is, the cost structure and cost trends. - Operational and technological strategy: At the end of this stage the firm is able to define an Operational–Technological strategy, i.e. the level of investment, mayor technological areas, technological trends, where they are headed, technological alternatives, etc. - Key trends: The team investigates what are the mayor technological trends and how they represent opportunities or disruptive threats. The analysis is addressed to discover emerging technologies and how possible it is for them to be adopted in the future. - Technological features: Finally the team raises questions about the critical systems required to produce a specific feature and attributes that will be appreciate by the market. Currently the team has identified all the important activities and resources needed to create value. It is not a specific topic neither a specific stage but is all the debate developed until now what makes easy to define KA and KR. The KP are also identified given that the team is now aware who the most important stakeholders are. The team has run threat analysis and can tell who the most important partner is to be considered. The cost structure can be performed when the KA and KR are identified — the level of detail is not important for the moment and an approximation of cost is enough at this stage. This phase helps to fill up technology layer in both, BM and TRM, with the same operation strategy, making them to be correlated and aligned to business goals and product strategy.

3.6. Phase 5: TRM link & BMC integration The final stage takes into consideration all the information retrieved until now (see Fig. 12). The team has developed the market, product and, technology levels for both tools, BM and TRM. What is needed now is to link TRM levels, using linking grids, and to make the integration of BMC according to each period of time. The team has identified all the blocks needed to integrate the business model; it is recommended to generate several possible BMCs for each period of time (now, mid-term and long-term) with variations between blocks, patterns, customers segments, etc., then evaluate them. It is possible to test the BMC's using the story telling tool.

Fig. 9. Phase 2: Market analysis.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Fig. 10. Phase 3: Product analysis.

With all the information available, each BMC formulated should have much more detail and perspective. Finally, an analysis of the alignment between the created models and the strategy of the company is performed (Pillkahn, 2008). It is important for the team members to keep in mind what outputs are expected to have at the end of each stage; this is not only to keep focus on the relevant points, but to ensure that at the end of the whole process the team will have the blocks and levels for BMC integration and the TRM linking. It is desirable to re-check BMCs periodically with the purpose of track changes and evaluate goal achievement and progress.

3.7. Building process integration tool For the application of the methodology, an automated tool was developed that makes the analysis simpler through all the phases — its purpose was helping the team leader to guide the process by telling him/her the next topics to be discussed. The tool was created using and datasheet, that have the description of all the questions for each phase, after the leader answers all the questions, it constructs both tools following the methodology described above. (For more information about the tool, contact the corresponding author).

4.1. Phase 0: Preparatory phase Given that the company has the expertise for developing this type of product the goal is to explore a new and innovate line to deliver value to a growing segment. Also, the integration tool helped the firm to identify issues to address, this means issues that the firm has influence and should take actions to have the products and technologies on time when the markets will need them. The questions asked give the firm a general view of how the outputs of this process would look like at the end; they could see a landscape for the company for the next two years and all the elements for running the business unit. As it was told before, at this point it is crucial to define the general architecture for TRM. On this specific case, the company wants: to provide the product to high performance athletes (medium term — one year), and to expand the business to occasional athletes (long term — two years). This study revealed that for the market level, it is important to consider that nutritional product market is growing and an alternative product could increase the sales creating a new business unit. For the product level analysis the firm considered exploring new technologies that help customers (gyms and sport clubs) to provide an easy and clean solution for the final user (athletes); and the firm should care about developing and selecting the right operation technologies and manufacture activities. 4.2. Phase 1: Value proposition identification

4. Case study The case study presents the analysis developed in a medium size manufacturer and marketer of beverage dispensing systems (approximately 1500 associates). The company has facilities in United States, Mexico, Australia, and Europe. The dispensing systems are a machine with technology to mix water and syrup to deliver beverage like softdrinks, juice, and coffee. The team explored possible BI's and chose the one that represents a new and unexplored business for the firm. The company looked for reaching the growing segment of people that care about their health using gym facilities and consuming supplements. This segment was divided in two main groups; high performance athletes and occasional athletes; the firsts are people that train their bodies as part of a preparation plan for high competence at all kind of sports. The seconds are people that train with the health-care purpose. Experts collaborated in the process by using the methodology described in this study. After all the relevant information was collected, the integration tool was used to obtain the BMCs and TRM. Following is presented, step by step, how the integration tool was applied to the case study.

The main purpose of this phase was to use the methodology for obtaining ideas from team members through discussion, and gathering the useful information to create value proposition. The team state the objective pursued by the BI–PC. The BI–PC chosen for the case was to deliver products that provide customers nutritional beverages before and after work out, the objective was to offer new products for a different market segment from current business model. The BI– PC chosen was proved using the tools suggested by Osterwalder and Pigneur (2010), the results were: a) Storytelling helped the team to visualize the scenario when the product finally reached the market. b) Kill/thrill sessions gave a new perspective and brought into discussion important issues to consider. Using this methodology, the team was able to identify the potential segments and concentrated efforts over the one that would be the target for the current business. Finally, the contrast between customer feelings and expectations and what the firm was willing to achieve, helped them to define the value proposal, which was: to deliver athletes a high quality automated machine which provides a supplementary beverage to

Fig. 11. Phase 4: Technology analysis.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Fig. 12. Phase 5: TRM Link & BMC integration.

improve athlete's performance at gym, also to ensure that the delivered product is healthy and to provide continuous technical support. 4.3. Phase 2: Market analysis In this phase, the team discussed the political strategy the firm could have in order to face government's policy; it is not an issue that the company could influence but the firm needs to be aware in order to develop a proper business strategy. As well, the team discussed the macroeconomic indicators (TRM market level), main socioeconomic and societal trends and how they affect business. Afterwards, market forces were analyzed with different time spans, also some topic concerning customers' landscape were discussed, the team was able to distinguish many other potentials segments, and identified which ones were growing and which one were declining. All this analysis and discussion helped to gather relevant information for directing future efforts. In order to clarify the level of competence threat, a specific analysis was performed; the result was that there were only a few competitors in the market and they already had the product. Then, a second threat analysis was made for buyer's group. The threat level was considered medium and the differentiator factor was the large quantity of information the buyer had about these kinds of products. The methodology provided information to shape the future customer relationships, to be aware of the customer needs, to establish what binds customers to a company's offer, and to identify switching cost

and revenue attractiveness. With all these elements identified, the team was able to envision the business strategy, and to construct the TRM market level. Also the methodology gave the necessary elements to identify the CR needed to integrate the BMC. 4.4. Phase 3: Product analysis The main purpose in this phase is to study the products that satisfy the market preferences, to do this the team first quantifies the level of threat for new entrant and substitutes products, second they identifies the product brochure for next performed a market – product grid analysis. Subsequently, the team developed the TRM for the features that would impulse the characteristics that the market would appreciate, and finally, they complemented the business strategy (developed previously), with the product strategy. The new entrance product threat analysis made evident the medium level of threat and also and more important that distributors and channels were easily accessible for the competence. This gave a hint of what strategy the company should explore to have the distributors under control; for example exclusivity on exchange or discounts or financing. The team identified that traditional brands could create a new business unit and become an important new entrance product for the market with strong advantage. The developed tool helped the team identify the level of threat for substitute products, which was considered high as buyer is price sensitive and, depending on the moving cost, the customer change from one

Fig. 13. BMC for the case study.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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product to a new product. The workshop and the discussion gave the opportunity to understand what products or services can replace theirs, and let them to consider different approaches for the same product with different characteristics. Once market trends and the desired product characteristics were established, the team numbered the features areas (FA). They describe the product attributes that the market would appreciate. The team defined the future product and created their product brochure. After that, it was determined what performance dimensions would be impacted more for each FA using linking grids tool to make product – market relationships, which allowed the team to construct the TRM product-level. A

feedback of these features and attributes was given to improve the value proposition phase. 4.5. Phase 4: Technology analysis The main objective of this phase is to look for the trends that would guide the technological changes, and how these changes could modify the business model, to accomplish this it was used the integration tool. The building process integration tool was conducted in order to investigate about regulatory trends that could represent an opportunity or a threat for the business.

Fig. 14. Final TRM for the case study.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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The team identified that even though the suppliers existed in an acceptable number, all of them were focus in a certain portfolio and there were no new products available for the moment. Also, the team recognized suppliers that could provide the syrup, instrumentation, casing, technical service, transportation and distribution. The study permitted to detect the importance of distributors and channels for the proposed BM, and also helped to evaluate the current way the firm was delivering their products. After this, a brainstorming was made of all the technical features of the future product including services and customer's support. Then, a Product-Technologies Grid analysis was performed; using the integration tool was possible to prioritize the technologies which improve the most relevant product features for the market. The TRM product level was fulfilled but only with the most relevant technology attributes. At last, the team had elements to define the technology strategy. 4.6. Phase 5: TRM link & BC integration In this last phase, a general review analysis was performed with the purpose of assessing all the phases and looking for the elements that help to construct a proper BM. Also, all the information was added on an empty TRM-template and the routes were identified. Fig. 13 shows the integrated BMC for the case study considered only for long-term period. It is suggested to elaborate one BMC for each period of analysis (now, mid-term and long-term), but in this case, the team choose a short period of time (two years) for the building process integration, and they wanted to visualize only one BM. The gathered information was used in the construction of the TRM, the final product is shown in Fig. 14.

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develop strongly related TRM-levels. This has an important implication at the management level of the firm because R&D efforts would concentrate only on the product feature that would satisfy the characteristics the market would appreciate. The case of study helped to enhance the knowledge about how to run cognitive processes, because the team talked about strategic issues with a systematic guide allowing different perspectives. Also, the application of the methodology makes evident that having a clear business-need contributes to a successful roadmap. One of the most important advantages of the building process integration is that it made possible to create a BM for the current situation and also for the medium and long-term; this would give to the firms hints of which elements the business could change according to the required conditions. At the same time the market, product and technology strategies were created taking a close look to the necessities of the business administration. Even though the visualization of the business in the future is a very valuable management capability, the robustness of the strategy created is validated when the customer is considered in the process; having the customer's opinion during the creation of the strategy validates the outputs. Furthermore, when the business is running and the value proposition has been tested with the client, then the success of the strategic management tools are proved; before that, the target is to structure the most robust proposal as possible. The awareness of the society preferences in the market is the critical feedback for any BM or TRM created. The application of the methodology proved to help in the identification of the elements that assemble the BMC and also the levels needed to structure the company strategy. 6. Future research

5. Conclusions The key findings of this research complement those of earlier studies (Abe, Shinokura, Suzuki, Kubo, & Sakuma, 2006; Abe, Shinokura, Suzuki, Kubo, & Sakuma, 2006; de Reuver, Bouwman, & Haaker, 2013) that state, BMC and TRM have the common objective of helping to increase persuasive power for funding engineers/researchers to pursue the innovative planning of research and development. The building process integration proved that the strength of both strategic management tools (BMC & TRM) can be complemented and resulted in a more robust methodology, which took the pros of each tool and produced two products strategically aligned. Also, the application of the methodology helped to obtain the ideas from a group of people with different expertise and knowledge within the firms, and transformed them into a business model that responds to differ periods of time, in order to achieve short, medium and long term objectives. In conclusion, during the building process integration, BMC is complemented with time perspective the TRM has. The methodology suggested the connection between levels can be performed better by using the linking grid tool; it made possible to

It is recommended for future research to evaluate the outputs achieved; the following methods may be interesting topics to extend this methodology; (1) Osterwalder and Pigneur (2010) suggested a structured way to evaluate the BMC created by comparing it with a matrix, which has all the elements recommended for a robust model, and (2) Jeffrey, Sedgwick, and Robinson (2013) set a roadmap evaluation metrics focused on whether the objectives of the TRM have been translated into actual programs and policies.

Acknowledgments We acknowledge SENESCYT — Ecuador for the resources provided as well as CONACYT — Mexico for their support. An earlier version of this paper was presented at the Portland International Center for Management of Engineering and Technology 2015 Conference, August 2–6, 2015, Portland, USA

Appendix A Appendix 1 Issues that the team go through the building process integration. Issues Preparatory

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What are the critical goals? What issues are important to address? What are likely to be the most interesting and important topics? What might the outputs look like? Will these meet the aims? Where do we want to go? Where are we now? How can we get there? Why do we need to act?

References Fast-start Roadmapping Workshop Approaches (Phaal R., Farrukh, Mitchell, & Probert, 2003)/Mobilize (BMC). Framing the project goals, planning the project, and assembling the team (Osterwalder & Pigneur, 2010)

(continued on next page)

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009

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Appendix 1 (continued) Issues Preparatory

- What should we do? - How should we do it? - Named and describe the expertise of the team's members

Value proposition

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Market analysis

Product analysis

Technology analysis

Link & integration

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References

Describe the BI–PC Objectives pursued? Test preliminary BI–PC Brainstorming the possible customer segments Empathy map What is offered to the client? (My will) What is the client expecting to receive? (My vision) Formulate the value proposal Rivalry and government policy Entry barriers and government policy Substitutes and government policy Suppliers and government policy Buyers and government policy Current overall conditions from a macroeconomics perspective Current capital market conditions as they relate to your capital needs Economic infrastructure of the market in which your business operates Major societal trends that may influence your business model Major socioeconomics trends relevant to your business model Key issues and transforming your market from customer and offer perspectives Major market segments, their attractiveness, and spotting new segments Incumbent competitors and their relative strength Market needs and analysis how well they are served Elements related to customers switching business to competitors Performance dimension (Define the performance dimension: characteristics the market would appreciate) Who are the new entrants in your market? How are they different? What competitive advantage or disadvantages do they have? Which barriers must they overcome? What is their value proposition? Which customer segments are they focused on? Which products or services could replace ours? How much do they cost compared with ours? How easy is for customers to switch to these substitutes? What business model tradition do these substitute products stem from? Identify the product What are the major technology trends both inside and outside your market? What technologies represent important opportunities or disruptive threats? What emerging technologies are peripheral customers adopting? What regulatory trend influences your market? What rules may affect your business model? Which regulations and taxes affect customer demand? Who are the key players in your industry value chain? To what extend does your business model depend on other players? Are peripheral players emerging? Identify the critical system requirements and their targets Specify the major technology areas Specify the technological drivers and their targets Identify technological alternatives and their time lines Recommend the technology alternatives that should be pursued Linking the three levels, market, product and technology; find gaps and look for future actions Creation (Prototyping potential BM for exploring different direction for the final BM. Change the blocks could give an opportunity to explore new ideas or a totally different BM. Test preliminary BM. Storytelling. Select which of the potential BM are more suitable with the strategic align)

References Abe, H., Shinokura, K., Suzuki, A., Kubo, H., Sakuma, H., 2006. 2nd Generation business modeling: smart innovation planning method managing the link to corporate value creation for R&D outputs. PICMET, pp. 1–8 Istanbul. Abe, H., Ashiki, T., Suzuki, A., Jinno, F., Sakuma, H., 2009. Integrating business modeling and roadmapping methods — the innovation support technology (IST) approach. Technol. Forecast. Soc. Chang. 76 (1), 80–90. Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long Range Plan. 43, 354–363. Chungyalpa, M.W., Bora, B., 2015. Towards conceptualizing business strategies. Int. J. Multidiscip. Approach Stud. 2 (1). Cosner, R.R., Hynds, E.J., Fusfeld, A.R., Loweth, C.V., Scouten, C., Albright, 2007. Integrating roadmapping into technical planning. Res. Technol. Manag. 50 (6), 31–48.

Mobilize (BMC). Testing preliminary ideas/Understanding (BMC). Developing a good understanding of the context in which the business model will involve (Osterwalder & Pigneur, 2010)

Building the firm's political strategy (5F's Porter) (Vining, Shapiro, & Borges, 2005)/(BMC) Strategy; macroeconomics forces, key trends, market forces, industry forces (Osterwalder & Pigneur, 2010)/Fast start roadmapping workshop approach (Phaal R., Farrukh, Mitchell, & Probert, 2003)/T – Plan (Phaal et al., 2004a)

(BMC) Strategy, industry forces (Osterwalder & Pigneur, 2010)/Fast start roadmapping workshop approach (Phaal R., Farrukh, Mitchell, & Probert, 2003)/Technology management and roadmapping at the firm level (Moehrle, Isenmann, & Phaal, 2013)

(BMC) Strategy, key trends, industry forces, macroeconomic forces (Osterwalder & Pigneur, 2010)/Building the firm's political strategy (5F's Porter) (Vining, Shapiro, & Borges, 2005)/Fast start (Moehrle, Isenmann, & Phaal, 2013)

T – Plan (Phaal R., Farrukh, Mitchell, & Probert, 2003)/Technology management and roadmapping at the firm level (Moehrle, Isenmann, & Phaal, 2013)/(BMC) creation, design (Osterwalder & Pigneur, 2010)

de Reuver, M., Bouwman, H., Haaker, T., 2013. Business model roadmapping: a practical approach to come from an existing to a desired busines model. Int. J. Innov. Manag. XVII (1), 18. Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Compet. Rev. 24 (1), 32–45. Godet, M., 2010. Future memories. Technol. Forecast. Soc. Chang. 77, 1457–1463. Jeffrey, H., Sedgwick, J., Robinson, C., 2013. Technology roadmaps: An evaluation of their success in the renewable energy sector. Technol. Forecast. Soc. Chang. 80, 1015–1027. Keupp, M.M., Palmié, M., Gassmann, O., 2012. The strategic management of innovation: a systematic review and paths for future research. Int. J. Manag. Rev. 14, 367–390. Moehrle, M.G., Isenmann, R., Phaal, 2013. Technology Roadmapping for Strategy and Innovation. Charting the Route to Success. Springer, Ed. Osterwalder, A., Pigneur, Y., 2009. Business Model Generation. Modderman Drukwerk, Amsterdam.

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M.A. Toro-Jarrín et al. / Technological Forecasting & Social Change xxx (2016) xxx–xxx Osterwalder, A., Pigneur, Y., 2010. Business Model Generation. John Wiley and Sons, New Yersey. Phaal, R., Farrukh, C., Mitchell, R., Probert, D., 2003. Starting-up roadmapping fast. Res. Technol. Manag. 46 (2), 52–58. Phaal, R., Farrukh, C.J., Probert, D.R., 2004a. Customizing roadmapping. Res. Technol. Manag. 47 (2), 26–38. Phaal, R., Farrukh, C.J., Probert, D.R., 2004b. Technology roadmapping — a planning framework for evolution and revolution. Technol. Forecast. Soc. Chang. 71, 5–26. Phaal, R., Farrukh, C.J., Probert, D.R., 2006. Technology management tools: concept, development and application. Technovation 26, 336–344. Pillkahn, U., 2008. In: Aktiengesellschaft, S. (Ed.), Using Trends and Scenarios as Tools for Strategy Development — Shaping the Future of Your Enterprise. Publics Corporate Publishing, Erlangen, Germany. Porter, M.E., 2008. The five Competitive Forces that Shape Strategy. Harvard Business Review. Ringland, G., 2010. The role of scenarios in strategic foresight. Technol. Forecast. Soc. Chang. 77, 1493–1498. Rohrbeck, R., Schwarz, J.O., 2013. The value contribution of strategic foresight: insights from an empirical study of large European companies. Technol. Forecast. Soc. Chang. 80, 1593–1606. Vining, A.R., Shapiro, D.M., Borges, B., 2005. Building the firm's political (lobbying) strategy. J. Public Aff. 5, 150–175.

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Zott, C., Amit, R., 2010. Business model design: an activity systems perspective. Long Range Plan. 43, 216–226. Miguel Angel Toro-Jarrín earned the Electronic Engineering degree from the Escuela Politécnica Nacional of Ecuador, in May 2005. He earned his M.Sc. in May 2015, at the Tecnologico de Monterrey, Campus Monterrey, Mexico. He worked at Siemens as a Technical Manager and BU manager. Idalia Estefania Ponce‐Jaramillo is a doctorate student at Tecnologico de Monterrey, Campus Monterrey, Mexico, in industrial engineering. She earned the Biomedical Engineering degree from Tecnologico de Monterrey in May 2005. She earned the M. SC in May 2014, at Tecnologico de Monterrey in Mexico. She made her master thesis in medical technology management while working at the Mexican Institute of Social Security. David Güemes-Castorena is an Associate Professor of technology and innovation management, at Tecnologico de Monterrey, Campus Monterrey. He received his D.Sc. from The George Washington University. His research interest involves technological strategy, and applied technological foresight.

Please cite this article as: Toro-Jarrín, M.A., et al., Methodology for the of building process integration of Business Model Canvas and Technological Roadmap, Technol. Forecast. Soc. Change (2016), http://dx.doi.org/10.1016/j.techfore.2016.01.009