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Why business models matter

By: Amanda Coe, Daniel Belanger and Jeffrey Roy(07-25-2007)



...and how Service Canada shifted the centre of its universe

Many organizations assume that success is determined primarily by their product and service offerings, how well they meet customer needs, and on the efficiency and effectiveness of their operations.

But in today's rapidly changing and complex environment, the business model is becoming equally important and arguably inseparable from the product and operational strategies of an organization in determining how it achieves success.

A business model defines how a business creates value for its clients, stakeholders and shareholders. It defines the core functions that an organization will excel in, the structures and competencies that it needs to execute on their mandate and the relationships and strategies it will establish with its partners.

A successful business model also defines the competitive advantage that will set it apart from others and make it "best in class."

Getting the business model right is often the difference between surviving or not, between being truly transformational or simply incremental. Many business models in the private sector demonstrate a simplicity, precision and focus that can be communicated in just a few words, such as:

  • Procter & Gamble's transformation of its former in-house research and development process with a new "connect and develop" model to leverage external networks of inventors and scientists for new product development;
  • Dell's "direct model" based on the premise that the most efficient path to the consumer is through a direct relationship, with no intermediaries to add complexity and cost; and
  • eBay's "automated online auctioning" business model pioneered in order to innovatively and instantaneously match buyers and sellers.

Business models are as relevant to the public sector as they are to the private sector. For many years, governments world-wide have delivered service to their citizens through a traditional programmatic business model. This model is characterized by multiple policy departments, each with its own set of programs and service delivery channels.

For some time, it has been evident that this model is complex and frustrating for citizens to navigate, expensive and duplicative, and focused on transactions, not outcomes. In Canada, the situation has been much the same.

Putting citizens first

But today, Canadians are demanding better service. As the Citizen's First surveys have shown in this country, they want personalized, high-quality service. They expect government to provide service that is comparable to or better than what's available in the private sector.

There are better ways. The successful deployment of the new citizen-centered business model is central to the value proposition of 21st-century government, in terms of service relevance, innovative design and delivery, and overall performance.

Service Canada is the Government of Canada's one-stop service delivery organization for service to individual Canadians. Its mandate is to provide access to a range of government services and benefits for Canadians. The business model that supports Service Canada's mandate is the "citizen-centered" business model that focuses on people, not programs, and puts the citizen at the centre of how government delivers service.

There are four defining concepts underpinning this new business model:

  • Focus on the citizen: A citizen-centered organization connects people to the programs, services and information they need, regardless of who delivers them.
  • Deliver one-stop government service: One-stop service ensures that government is easy to find, easy to deal with and easy to access.
  • Integrate citizen information: Instead of asking for the same information every time a person accesses government, a citizen-centered organization asks for the information once and remembers it in the future, while strengthening privacy and security.
  • Collaborate and partner: Bringing services together in a way that is easy and integrated requires extensive collaboration and partnering, as organizations work together to leverage their collective potential to create new value for citizens.

Service Canada's mission is to apply these concepts to improve service, lower costs and, above all, achieve better outcomes for citizens. The implications of a new citizen-centered business model are significant and challenging. While much progress has been achieved, there is much that remains to be done. Realizing service transformation necessitates systemic change both within Service Canada and across the public sector as a whole.

In transformation, resistance to change is both unavoidable and natural. Indeed, such resistance can even be healthy in encouraging thoughtful discussion on the prospective risks and benefits in devising a new approach to doing business.

Stemming from these discussions, there are three common concerns that arise on the suitability and potential of Service Canada's citizen-centered model. They are: firstly, the dangers of separating policy and service; secondly, a conception of Service Canada as merely a front office window; and thirdly, the perils of weakened accountability through an integrated government-wide service provider.

Continued: Accountability for service

Related content:

E-government pact aims to boost service delivery

Public sector customer service measures up to private

Partnership imperative

Q and A with Art Stevenson, Institute for Citizen-Centred Service

Canadian service delivery a model for U.K.

Refining customer service

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