Business Model Canvas of Zimmerman Associates

Zimmerman Associates Incorporated is an information management company based in Fairfax, Virginia. It was founded in 1978. The company operates business processing centers of federal, state and local government agencies by employing efficient information technology (IT) solutions. ZAI develops capture teams to assess opportunities and to research if pursuing an opportunity will be favorable for its client company or not. The invocations made by Zimmerman Associates Incorporated are unique in containing a statement of work that provides a rough draft of all the services provided by ZAI and the cost that will be incurred in providing the services. Upon successful allocation of the project, ZAI’s human resource office selects candidates to provide further reporting information Business Model Canvas.

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Business Model Canvas:

ZAI’s business model canvas is based upon 9 key building blocks postulated by Osterwalder and Pigneur (2010). These are

  1. Key Partnership – ZAI has built relationships with certain protégé companies in order to enhance its reputation in the industry. These companies include various federal government agencies, state and local government agencies, Stafford county public schools and other companies in the private sector, association for information and image management (AIIM), ARMA International (Records Management), Project Management Professional (PMP) Institute, AMAZON, Fujitsu, government contractors association, National Contract Management Association, and National Association of Government Contract
  2. Key Activities – ZAI runs its business in several areas. These areas include managing records and libraries, contact centers and call centers, distribution Centers, web and data services, geographic information systems, development and integration, data center operations, program management, financial management, systems engineering and integrated logistics support
  3. Key Resources – ZAI uses special tools for its ongoing operations. These include business development tools e.g., social media, proposal writing, personal affiliations and marketing. A human resource office is a key tool that screens and selects best candidates for providing reporting information. ZAI also uses online web portal.
  4. Value Propositions – ZAI has business credentials which better position the company for opportunities. These credentials include Lean Kaizen Six Sigma Methodologies. Certification from ISO 9001:2008, evaluation at CMMI Level 3. ZAI is involved in joint business ventures with patron companies in order to increase its competence.
  5. Customer Relationships – ZAI invests in some activities like incentive programs, tuition reimbursement programs, training assistance programs and scheduling monthly, quarterly and annual meetings with the customer in order to gain high customer retention rates.
  6. Channels – ZAI employs strategic contract vehicles to pursue business opportunities and also to gain new ones. The eight different contract vehicles allow patron companies to take multiple approaches while releasing invocations. Apart from these contract vehicles, ZAI uses recruiting tools e.g., Monster.com and government contracting associations.
  7. Customer Segments – These are the tools that ZAI uses to obtain information regarding federal business opportunities from customers. These include Fed Biz Operations and government win opportunity operations. The information is also communicated by word of mouth.
  8. Cost Structure – These are the areas involved with accounts payables. They include facilities, insurance, taxes and public company expenses, R & D project costs, legal, consultants and travel costs, Stock-based compensation, depreciation and amortization, Personnel costs, Marketing Costs, Licensing and Partnership Fees and technology costs.
  9. Revenue Streams – These are the resources from company revenue and include fees collected from customers e.g., fixed price contracts, time and material contracts, firm fixed price plus fee.

Theoretical/Behavioral trends in Business Model Canvas

Based on above mentioned 9 key building blocks, ZAI’s business model canvas also exhibits some unique patterns, designs and strategies. This section attempts to find out theoretical/behavioral trends in the business model of Zimmerman Associates Incorporated by elaborating these patterns, designs and strategies.

ZAI increases its product value by smoothing the interactions between business development wing and human resource office, which suggests that ZAI works as a multi-sided platform (Osterwalder & Pigneur, 2010). Zimmerman Associates Incorporated performs joint ventures with its protégés in order to increase its business potential. The company gains profit by integrating external and internal ideas and gains. Thus, ZAI has as an open business model.

ZAI partners with its customers in order to identify their needs. This customer insight technique adds to the good will of ZAI. The company uses several approaches to grab business opportunities. One technique is using ‘what if approach’ and ‘doing homework’ about the information systems required by its potential customers. The other technique is ‘prototyping’ in which the company tests several cost proposals before solicitation, in order to figure out the best cost proposal for a given company (Vial, 2016).

ZAI’s behavior is mainly influenced by its business model environment. ZAI strives to work in accordance with its environment. This environment includes certain industry forces like contractors, stakeholders and market contenders, prevailing regulatory and technology trends and macro environment factors like global market conditions and economic infrastructure (Osterwalder, 2013).    

In the process of evaluating the overall effectiveness of the business model, SWOT analysis is a must. SWOT refers to strengths, weaknesses, opportunities and threats to an organization. Using SWOT technique, ZAI evaluates its value proposition, cost/revenue, infrastructure and customer interface.  All the value propositions depicted in ZAI business model canvas are well connected with customer needs and have a strong network effect.  The revenue streams like fixed price contracts, time and material contracts and firm fixed price plus fee are sustainable. ZAI charges for what customers are willing to pay for.

ZAI deploys channels like eight different contract vehicles which allow customers to take multiple approaches when releasing solicitations for bid and recruiting tools like Monster.com, Indeed, etc. These resources and the main activities of ZAI e.g., integrated logistics support and geographic information systems are difficult to be imitated by competitors. ZAI has subtle operational associations with partner protégés.

ZAI strengthens its relationships with customers by offering competitive rates on fees and by scheduling monthly, quarterly and annual meetings with corporate officers and customers at each client site. Thus, the company’s customer relationships are effective and are well matched with customer segments.

Discussion of Appropriate Theories, Metaphors, and Frames:

ZAI is an information management company whose techno-structure is composed of technology as well as the employees who work on planning and marketing. The proficient staff and management are involved in doing complex judgments. The goals of ZAI are aligned with the primary goals of a techno-structure contended by Porras (1980). These goals involve safeguarding the autonomy of company while working in collaboration with customer companies, mitigating security risks and augmenting the resources and goodwill of the company. The core responsibility of ZAI’s survival and growth lies on managers.

ZAI’s business model has been viewed in the four frames i.e., structural, human resource, and symbolic. Human resource is one of the key resources of ZAI, as it screens and selects the best candidates to give the reporting information thus maintaining a pool of potential staff. If viewed in structural frame, ZAI deploys strategies to implement the best solicitation. The cause-and-effect relations are well tacit in the organization’s operations, and there is little uncertainty. ZAI has an established structure with clear goals, roles, policies, and strategies. ZAI has abundant resources and clear goals. Thus, there is very less ambiguity (Friedman, 1994).

The most suitable frames for ZAI are structural and human resource. This is because ZAI is an information management company, in which designs and strategies have primary importance. Nonetheless, other important business tasks like screening and selecting potential candidates to give reporting information are done by the human resource department.

Morgan has used metaphors to depict organizations in an ingenious way. These metaphors help in comprehending one element of organizational practice in terms of another. Morgan used several metaphors to describe organizations. Nonetheless, an organization can be described using more than one metaphor. A number of metaphors can be used to generate harmonizing and contending insights about an organization. When a metaphor is preferred over others in describing an organization, then the organization is thought to be running in that specific mode of action pointed by that metaphor. However, the vision of multiple metaphors often helps in each other’s sustenance (Burrell & Morgan, 1979).

Efficient human resource management is an important part of ZAI’s business model canvas. Thus, the company believes in having good personnel relationships with the human resource to keep the flow of organization smooth. This depicts ZAI as a family. ZAI schedules monthly, quarterly and annual meetings with corporate officers to keep good corporate interface. Its culture is strong, and there are aspects of rituals and stories in the organizational culture. These characteristics portray ZAI as a theatre. Furthermore, ZAI can be considered as an organism that grows and adapts according to its environment. It works in partnerships with organizations in the external environment and is dependent on the environment for its survival.

In the context of the business model canvas, the metaphor best describing ZAI is an organism. This is because ZAI adapts and grows according to its environment, and emphasizes on environmental relations (Hamburger & Yitzchayak, 1998). This metaphor draws special attention towards ZAI’s survival and its relationship to the environment. These factors contribute towards the overall effectiveness of an organization.

The environment includes relations of employees both inside and outside ZAI. ZAI’s survival is dependent on the key business activities that it performs. The fundamental requirement of ZAI’s existence is to successfully meet the demands of the environment.  ZAI schedules regular meetings with its customers and provides a corporate interface. More meetings reduce the level of hierarchy as meetings are used to swap information and to spot problems so that the work could be coordinated without always going through the formal hierarchy (Cox, 2006).

The organism metaphor also accounts for the innovative technology used by ZAI as the main emphasis of this metaphor is the survival and adaptation. ZAI has to employ novel technologies in order to keep pace with its customers’ growing needs. Thus, it has to adapt change in its culture as required by prevalent circumstances (Jacobs, 2006).

The chief aim of organism metaphor is to develop an understanding of the relation between ZAI and its environment. But this does not mean that ZAI offers all accord and handy unity. Unlike a material organism, ZAI is very fragile and timid as it mainly constitutes human subjects and is a product of vision, values, norms and beliefs. This adds to the uniqueness of ZAI which is the main strength of this organization.

Evaluation and Diagnosis of the Business Model: If ZAI’s business model is viewed in the traditional organizational development model proposed by Leavitt (2005)then ZAI emerges as a multifold system with different significant variables. These variables are structure, players, technology and goals. The structure of ZAI refers to its management, authority, communication between its employee and employer and work relations. Key players of ZAI are its employees. Technology has a significant position in ZAI’s business as it is mainly an information management business. The last and perhaps the most important variable is the goal of ZAI which backs its operations and existence. The author speculated that there is strong interdependence between these variables that means if ZAI attempts to modify any of the above stated variables, the rest three are also affected.

Human resource office is a key strength of ZAI’s business model, as ZAI develops capture teams to pursue ongoing opportunities and to gain new ones. Also, detailed reporting information is provided by selected candidates. On the other hand, being an information management company, ZAI has to incorporate the latest technology into its operations to satisfy customer needs. J. Leavitt’s model suggests that if ZAI attempts to modify technology, then its structure, players and goals will also be affected. Thus, an appropriate organizational development plan is needed to minimize the resistance offered by ZAI’s employees (players), communication between the employees and employers (structure) and functioning (goals).

The managers at ZAI have to deal with personal issues such as interpersonal relations, communication and self-analysis as well as organizational issues such as deadlines, duties and responsibilities, rules and procedures, and especially inter-organizational and group relations. Thus, they fit into the category of vertical groups as defined by Frankel (1984).

Another important area to consider in business model canvas is building effective teams within the organization in order to build a competent workforce. Organizational culture plays a significant role in this process because the shared norms, beliefs and values of the organization are crucial in gluing employees together.

To implement organizational changes in ZAI, the appreciative inquiry model suggested by Bright, Cooperrider, & Galloway (2006) can be used. This model uses a positive approach to organizational change. This model is rooted in social constructionist theory, which is a sociological theory that outlines the foundation for shared assumptions about reality by inspecting the expansion of mutually created understandings of the world. Appreciative inquiry model utilizes narrative organizational development approaches e.g. storytelling to implement new ideas and theories in an organization. In the process of doing so, the model tends to acknowledge and praise the existing capabilities of the organization in order to pave the way for even better ideas. The theory also assumes that employ act in ways that formulate their expectations into reality. Positive expectations about the organization can develop eagerness in employees that directs their behavior towards making their expectations a reality. When employees believe that every change the organization makes is in the best interest of the organization and will also benefit them, then resistance to change is minimal. It is further based on the argument that the most important force for change is new ideas, and that traditional action research model does not generate such ideas. The appreciative inquiry method is a collective discovery process into the best of what is, what might be, what should be, and what can be.

The appreciative inquiry model consists of four stages i.e. discovery, dream phase, design stage and delivery or destiny stage. Considering ZAI’s business model and the technological changes that the company wishes to make, the discovery stage will involve making an inquiry into the subject of change and using employee’s reflections related to the change. The management can do so by doing a poll on whether the existing technology is efficient or does it lack something. The dream phase follows the discovery stage and involves employees visualizing ZAI in an ideal state in relation to the innovative technologies the company wants to adopt. Usually, an attempt is made to identify and symbolize the common aspirations/dreams of organization members. In the third stage called design stage, employees will develop concrete proposals for the new state of ZAI and will coerce possibility/design statements to bridge the gap between the current best practices and the ideal future state of the ZAI. At the final stage, the delivery or destiny stage, employees will take actions in line with the design statements, assess the results of their actions, and make the necessary readjustment moves ZAI towards the vision state in order to achieve maximum potential.

Recommendations: ZAI has already built its goodwill in the market and has a pool of potential candidates who serve to capture new opportunities for the company. However, adopting change always incurs some amount of resistance. Although ZAI can implement technological changes by employing appreciative inquiry model, yet employees can also be made receptive to the change by a number of other methods. It includes proper guidance of management of employees and increased accountability. This can be done by building a conduit of experienced and skilled leaders/managers (Romme, 2010). The other technique is a proper addressing of career development needs of the workforce. ZAI can strategically communicate its priorities to its employees in order to engage and retain a diverse workforce. While implementing change, the company should pay special attention to its remote employees as they cannot be accessed and be briefed directly (Garger, 2008). Although ZAI has sufficient resources, yet it should minimize costs incurred on salaries and personnel costs in order to adopt latest technologies. The cost can also be reduced by enforcing significant top-down changes which may include downsizing. ZAI should conduct workshops and seminars on how to accept leadership succession and should employ person-organization fit theories in order to retain potential employees. Talent development workshops should also be organized.

One of the unique characteristics of ZAI’s business model is that its employees actively communicate with its patrons in order to identify their needs. Thus, instead of selecting candidates merely on the basis of having strong expertise in information management field, the company should also scrutinize communication skills of candidates in order to attain a higher level of productivity.
Analysis of Business Model-Discussing Patterns, Designs, and Strategies

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