Excursion 14

BSTs in the IT sector

In business models, boundary spanning transactions are where the action is. Boundary-spanning transactions (BSTs) connect the organization to customers, partners, competitors, and any other organizations or individuals outside the firm.

In the IT sector, BSTs are the sine qua non for how value is created, often because the value is entirely bound up in how information flows across boundaries. In “Place to Space: Migrating to e-Business Models”, Peter Weill and Michael Vitale identified underlying components of business models for organizations operating mostly or entirely within the e-business realm (today we might say “virtually” or “on the internet”). They define and “e-business model” as “a description of the roles and relationships among a firm’s consumers, customers, allies, and suppliers that identifies the major flows of product, information, and money, and the major benefits to participants.” (p.34) In other words, many IT and e-businesses are almost entirely defined by boundary-spanning transactions. Two examples from their book are shown below. If your business operates entirely online, or functions based primarily via information flows, then the tools in “Place to Space” might be a good resource for your business model analysis.