Time
3 hours 49 minutes
Difficulty
Beginner
CEU/CPE
3

Video Transcription

00:00
Welcome to the Idol framework. Updated course from Cyber Eri i G.
00:05
My name is Daniel Riley. I'm your subject matter expert on the idol framework.
00:11
In this video, I'd like to discuss how we look at i t business models from the ground up.
00:17
Um, and then specifically how the idol framework is going to effect in different business models.
00:24
Um,
00:25
so the first thing we're gonna have to discuss to do this is service's versus products now, Many years ago, this was a very distinct set of categories. Um, and a business usually fell into providing some kind of service or specialized product.
00:41
These days, this is less defined as well. Talk about
00:45
so products and service is air closely aligned concepts. Most products that will be sold will have some kind of element of service with, um, if you think about going to a car dealership and buying a car,
00:59
um,
01:00
the dealership can also throw in some kind of service plan for the car to help reduce the cost of maintenance and entice you to buy it.
01:10
So there's a distinct difference between service's and products, and how you can think about them very simply, is just what your client might ask
01:19
if a client's going to come to you and say, What can you make for me versus what can you do for me? If you're going to make them something, this is more of a product. If you're going to do something for them that they need done that's more of a service.
01:34
You don't think of products as thing you might stick into a shopping cart.
01:38
These are going to be tangible, discernible items physical goods that an organization produces
01:47
now.
01:48
Oddly enough, the physical goods can actually be digital physical goods. Mike digital file based outputs, marketing materials
01:59
and things like that.
02:00
Um,
02:00
now products conf all into a few different categories.
02:05
Um, I'm sure we've all received promotional products, which exists to help bring awareness about a new company or new feature.
02:13
They're usually logo and branded,
02:15
Um, and then we have consumer products these air sold to us than were expected that were the end user who's gonna benefit from the product.
02:23
Um, and then you have business products which are business to business sales, thes air the products that businesses use to perform their business as well. On there's usually some component of wholesaling
02:37
involved in that.
02:38
So if you look at a service based design, um, in the center you have service offerings, which this could be viewed in idle as the service catalog, which is what we go are going to build and maintain, um, around the edges. Here you have different service is that AH company might
02:58
provide Internet marketing software Q and A testing. These are don't produce
03:05
well. They do produce tangible goods. But the ultimate benefit for company is that they would no longer have to do Web design and development for themselves. They could outsource that. So Service's are a lot of outsourced work,
03:22
the production of an essentially intangible benefit like I was saying, either in its own right or is a significant element of some other tangible product.
03:30
That's important because that goes to our relationship that we're discussing about service's and products. A service can be provided as a significant element of a tangible product,
03:44
so sometimes it's going to be difficult to identify because of how closely associated they are.
03:51
So in the medical field, you might see this as a combination of a diagnostic assessment with an administration of a medicine
04:00
or closer to my field. This could be the combination of an analysis with the report.
04:05
This is a general I t business model that I found online, and I like to use it for planning because it really breaks things down.
04:15
And what we're really focusing on when we're talking about the business model is usually how it plans to monetize whatever it's offering now. Sustainability in offerings, these air good for investors.
04:30
But really, when we're modeling, what were modeling is the monetization.
04:33
So these come in a variety of forms,
04:36
and these forms that I'm going to cover here barely scratched the surface. But they're good ones because they're popular around I t.
04:46
So you have the direct sales model,
04:49
um, the franchise model, the Freemium model,
04:54
the subscription model and finally, combinations of all of these models, and we're going to get into these in detail in a moment.
05:01
So in the direct sales, you have a disperse network of sellers and buyers, and those sellers and buyers have direct contact.
05:11
Sales of products and service is generated revenue through that network, which sell directly to customers. Usually there's no kind of retail stores, its person, a person or in other business models, like
05:29
at convention settings.
05:30
So direct sales take place through presentations and demonstrations. Um,
05:36
again, these air, very popular for businesses that will go into people's homes to do demonstrations and things like that
05:46
Idol is used in these businesses. Toe help inform the sale cycles when to send these people out to meet and where will be most profitable.
05:57
Um, And then, of course, it's based off of the market fluctuations. So as customers change what it is that they want in certain areas, the Idol framework allows you to
06:11
generative Lee, maintain your service catalog.
06:15
The next model is a franchise model. We are all very familiar with. This is we can see
06:21
Ah, lot of fast food chains and another small business chains often used the franchise model, but in I t. It's actually fairly popular as well.
06:33
So business owners, Leeson, other organizations, business strategy.
06:39
The person who is paying the fee is called the Franchise E.
06:44
And the person who is selling the business strategy or leasing the business strategy, rather is the franchise or the franchisor came up with a profitable business strategy and the franchise. E wants to pay in some money to take a part of that business strategy and take advantage of it,
07:02
um,
07:03
so that that's just basically, they're buying the ability to provide proprietary goods. Their service is from the franchise Oars service catalog
07:16
and again, typical examples are fast food chains, small eyes, peas, posted stores, things like that.
07:24
I'll is used in these toe plan the distribution of franchisees and to plan the catalog of service is and goods that the franchisees will be able to distribute in each area. This helps to make sure that we don't have delusion in any particular area of a brand or product.
07:45
So Freemium this is a free service worth added service. Uh, premium service is you can purchase.
07:54
So for companies that offer a lot of personal service is online, this has become a huge model. You will get the basic accounts for free, and then they will advertise. Their premium service is to you, and you usually have to pay
08:11
either one time or a monthly fee to access those
08:16
now. Combinations of free and premium service is our very big for mobile application monetization. You'll see this a lot with a free downloadable game where you can buy in game content, you know, level boosts and things that will help you advance faster.
08:35
This is a premium service.
08:37
Um, this is only one example. You can see it a lot with
08:41
a free document
08:43
classification programs online things like that.
08:48
So I always used to create the different service's catalog for these and then two different G. How you'll manage your free and your premium service is. You can expect that free service free sources will get a lot more use than premium service is.
09:05
So you need to be able to plan for these differences
09:09
and how you're going to drive users from your free side to your premium side
09:15
subscription based. This is probably the biggest one, and I included disc graphic here to just give you a small fraction
09:24
of the type of online service is that you can subscribe to now as a customer, acquisition costs are high. Subscription models allow you to land a customer once and then build a recurring revenue off of that customer.
09:41
There is a balancing act, as if your subscriptions are too frequent or too high
09:46
um,
09:48
eventually, people will want to pay them any more.
09:50
So key features you can look for, like, auto pay all over Newell on early termination fees. So these all signal that you're working in a subscription model.
10:03
Um,
10:03
and and there are other ways to tell, but generally, um, if you have an auto renewal, that is, that's a dead giveaway.
10:13
So idle was used in the used to again.
10:18
The service catalog is the key. So in all of these, you can imagine that these will be this will define the service catalog and then that you
10:26
what is key to the analysts to set and maintain a service level agreement Once you've defined your service,
10:33
um, this service level agreement tells your clients what you agree to provide to them
10:39
on a recurring basis.
10:43
This is the most popular because it falls under the whatever as a service. So software as a service platform as a service all of the as of service is fall under the subscription model because you pay
10:58
almost always a monthly or yearly accepts fee.
11:03
Ah, a membership fee
11:05
which gets you access to whatever this service is. You stop paying you lose access
11:11
now.
11:13
Combinations of these are far more popular these days. It used to be much easier to define a business based as what type of model it is. But with the Internet and with multiple revenue streams, it's become a lot harder to do one model
11:30
and far more frequently we'll see combinations.
11:33
So,
11:37
for instance, will have a software as a service, subscription based company, which will
11:43
offer some of its service, is for free and then offer its premium service is using a subscription that would be a combination of a subscription based and a freemium bottle.
11:56
And again, a Freemium model may use more modern direct sales to go out and bring people in from the free side to using the premium.
12:05
Ah,
12:05
available service is
12:09
so with that, you know, we
12:11
we've talked about how we'll apply Idol to the different models and the core. The general thing
12:20
that you should pick up from all of them is that it's going to define the service's that are available,
12:26
and then how we distribute and maintain those service's. That's really the key.
12:33
So this is going to inform our overall service strategy, and that's what we're going to talk about in the next two videos how we will take this information
12:43
and we're going to build
12:46
our first service strategy
12:48
which will help us go into our service development
12:52
and then service, transition and service operation phases.
12:56
So
12:56
with that, I'd like to thank you for watching. As always, you can contact me outside. Buried I t my user name ist warder. T w a r t e r. I look forward to hear from me.

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