In Search of Margin for Business Networks:: The European Patent Office

Often-mentioned features of a business network are a strong inter-organizational design and an interactive and dynamic set of relationships acting in concert with one another for a common goal, bringing together core capabilities of different organizations to accomplish business improvements. One of the benefits of a business network is the increased flexibility of linking actors together. This provides a more agile arrangement for the network to produce from actual customer requirements as a starting point, and not on the basis of assumed or forecasted customer needs. However, organizations are facing difficulties in assessing the value of investments in their business network. There is no valid method to execute an assessment of margin. In this article an assessment method and tool are developed to assess margin in business networks. A method is required that can give a more detailed assessment on a variety of criteria, or key performance indicators: (1) cost reduction, (2) revenue generation, and (3) increased flexibility. Therefore, a 14-step research method was developed, together with a related decision support system (DSS), named the Business Network Navigator. The research method was tested in a real-life situation i.e. redesigning the business network of the European Patent Office (EPO). The results of the analysis and lessons learned are presented. Conclusions with regard to the usability and validity of the assessment method and tool are formulated.