The Value Proposition is a complex of components like products, services, resources, channels, stakeholder profiles, etc. with which organizations offer their proposition to their stakeholders and create value, both for their stakeholders and themselves. The Value Proposition is extremely important because in one way it defines the Value Creation on a high conceptual level, and in the other way it defines the Proposition Model.
While the creation of value is established by business processes and the development of Knowledge Assets - which also represent value - the concept of value creation is in how the organization thinks to create value for their stakeholders through their proposition. So value creation in processes is second level value creation. If the organization doesn't know how to create value through their proposition it will fail - at least in becoming excellent.
The other part of the Value Proposition is the Proposition Model. Again this is a very important concept because, when implemented correctly and at the right level of detail, it delivers flexibility and agility for the complete organization. This is why the Proposition Model is also used to structure the Business Function Model or BFM.
Because of the structure of the BFM Business Functions can be intuitively found to reuse, update and enrich the Business Functions. The BFM is defined in five different levels:
- The most generic level in which business functions are maintained applicable for all other levels
The LoB or Line of Business area in which the generic business functions for the LoB (for example the financial sector) are maintained
The Sector BFM where a further specialization of business functions is based on the specific sector, for example sectors as Banks, Insurance Companies, Pension Funds, etc.
- Another specialization level in which BFMs distinguish business functions for Retail, Wholesale, Investment Banks, etc.
- Finally the BFM for the individual organization,
The Generic Enterprise Function Framework, or GEFF, describes the highest structure of the highest level BFM. See the GEFF page for more details.
The BFM is also used for our Triple A Knowledge Asset Management in which Architectural, Augmented, and Actionable Knowledge Assets (hence Triple A) are managed and maintained. For more information on Triple A Knowledge Asset Management see A3 KAM.