BMC: what Osterwalder meant — and what it actually becomes in the Mittelstand
To the point: In the established Mittelstand, the Business Model Canvas is not an invention tool. It is a diagnostic and documentation tool that makes implicit knowledge explicit — and therefore selectable for an ERP decision in the first place. Anyone who has not made the nine building blocks explicit beforehand buys a system that supports the wrong processes.
In more than 1,200 ERP projects I have observed one constant: when a selection process fails, what is missing is not the requirements specification. What is missing is an explicit business model. That is exactly where the Business Model Canvas sits — the tool sold in textbooks as a founder's instrument. In my experience it is the sharpest instrument a managing director in the Mittelstand can hold in their hand before a system decision.
Alexander Osterwalder and Yves Pigneur published Business Model Generation in 2010 — what almost every MBA candidate knows today. The foundation was Osterwalder's 2004 dissertation The Business Model Ontology. On one page, founders were to make their entire business model visible: nine fields, one hour, done. Strategyzer maintains the original template today under CC BY-SA 3.0.
“A business model is the story that explains how an enterprise works.” — Joan Magretta, Why Business Models Matter (HBR 2002)
So much for the textbook. The DACH Mittelstand reality looks different. The clients we work with almost always have a functioning business model. What they are missing is the explicit description of that model. They know how they make money. They simply do not know it in a form that works as the basis for selecting an ERP system.
Our take: In the established Mittelstand the BMC is not an invention tool. It is a diagnostic tool that makes implicit knowledge explicit. Across more than 30 years of advisory work we have almost never used the canvas in a start-up situation, almost always in the re-architecture phase of an existing business.
The nine building blocks — readable in under ten minutes
To the point: The nine building blocks have been unchanged since 2010. What we add is the strict ERP reading order: customer and value proposition first, costs last. This order prevents the most common mistake — choosing a system based on the controlling module.
We skip the usual textbook order here and arrange the building blocks the way they are addressed in sequence during an ERP pre-project. That saves time in the workshop.
- 1. Customer segments. Which buyer groups do we actually serve? B2B wholesale and end customer in the same system? That is the first architecture question.
- 2. Value proposition. What do we really sell? A product, a solution, a subscription, a service package? The revenue module depends on it.
- 3. Channels. Direct sales, retail, e-commerce, marketplace? This is where you decide whether you need a PIM and an OMS.
- 4. Customer relationships. Transactional, project-based, self-service, subscription? That defines the CRM requirements.
- 5. Revenue streams. One-off sale, subscription, usage-based, service hours? The billing model depends on it.
- 6. Key resources. Machines, brands, data, people, licences? That is the master-data side.
- 7. Key activities. Production, engineering, logistics, consulting? The process skeleton depends on it.
- 8. Key partnerships. Suppliers, platforms, service providers? The integration question.
- 9. Cost structure. Fixed, variable, project-driven, asset-driven? The controlling module.
Our take: Anyone starting with building block nine optimises accounting and misses the architecture. The order is not academic — it is the difference between a strategy decision and a module decision.
BMC as the ERP selection anchor: why every system choice starts with the business model
To the point: ERP selection does not start with the requirements specification. A specification describes demands on functions. Functions follow from processes. Processes follow from the business model. Anyone who skips step one optimises the wrong layer.
The Bitkom study Digitalisation of the Economy 2025 shows: 95 percent of firms operate an ERP system, yet 53 percent report they cannot steer their digitalisation. From our perspective that gap is a symptom of the missing business-model anchor. Without a BMC there is no shared language between executive team, departments, and IT.
We start every selection mandate with a two-day BMC workshop, before the first requirements document is written. The rule of thumb: if not all nine fields can be described in under 30 words per field, the business model is not ready for a system decision. This reading is consistent with our ERP selection approach in the Mittelstand.
Our take: ERP selection without an upstream BMC is requirements-specification theatre. The system does not solve a strategy question. It only fixes that question in software — correctly or incorrectly.
Practical example: kitchen manufacturer with a 1,500-unit hotel order
To the point: The same south German kitchen manufacturer (€80M revenue, 320 employees) we describe in our process analysis entry won a hotel-chain order for 1,500 kitchens. The BMC revealed in two workshop days that this order is a separate business model — and does not fit into the existing ERP.
The manufacturer had a clear model for years: fitted kitchens for the German specialist trade, individual orders, project-based configuration through the trade partner. The hotel-chain order shifted five of the nine building blocks at once.
Customer segments — new was the international object customer with its own project management, not buying through the trade. Value proposition — no longer “individual fitted kitchen” but “1,500 identical modules with a five-year service SLA”. Channels — direct relationship instead of trade stage. Revenue streams — a mix of one-off delivery, staggered payment, and recurring service. Key activities — central project steering and roll-out logistics, neither previously modelled as a process.
Without the BMC the firm would have run this order through the existing ERP — with three Excel side-files for project steering, service tracking, and condition management. With the BMC, the executive team and CFO recognised within two days that this was a separate selection question: either add a project module, set up a separate client mandate, or rethink the whole capabilities set. They chose the middle option, with a clearly defined extension package.
Our take: The value of the BMC sits not in the finished canvas but in the question it forces: “Is this new business segment a sub-model or a separate model?” — without the BMC that question never gets asked early enough.
Capabilities mapping: from BMC to the ERP modules
To the point: BMC → capabilities → modules is the only bridge that has remained robust across more than 30 years of advisory work. Anyone jumping straight from the BMC into the requirements specification skips the capability layer — and ends up buying whatever the vendor demos best.
The BMC is the beginning, not the end. In the next step we translate each building block into business capabilities — abilities the firm must master independent of organisation, processes, or tools. Gartner describes business capability modelling as a representation of the business model independent of today's setup.
Concretely: from the BMC field key activities at a machinery manufacturer, the capability becomes “variant manufacturing with configuration-dependent bill of materials”. This capability maps onto concrete ERP modules: variant configurator, BOM management, production planning. Our process management in the Mittelstand approach supplies the methodology.
The bridge from business model to software is deterministic — when set up cleanly. In detail we use the Business Process Owner model, which assigns a named owner from the line to each capability cluster, and an iterative PDCA approach for validation. The process analysis runs along the capabilities, not along the departments.
Our take: Anyone jumping from BMC straight into the requirements specification has a strategy slide and a module list — but nothing in between. The capability layer is exactly where the decision is made whether the system carries the value chain or merely administers it.
BMC vs. Lean Canvas vs. Value Proposition Canvas — which tool, when
To the point: A short decision aid you can apply in ten minutes. In the Mittelstand the BMC is almost always the right tool — Lean Canvas and Value Proposition Canvas are special cases, not alternatives.
- Business Model Canvas. When an established business model needs to be made explicit and documented for an ERP or architecture decision. Standard in the Mittelstand.
- Lean Canvas (Ash Maurya 2010). When a new product, market, or business model needs to be validated against hypotheses. Replaces two BMC fields with problem and solution. Rare in the Mittelstand, frequent in innovation spin-offs.
- Value Proposition Canvas (Strategyzer 2014). When the value proposition needs deeper elaboration because customer jobs, pains, and gains are unclear. Often used as a deepening of BMC field 2.
Our take: Analysing a 40-year-old business with Lean Canvas treats it like a pitch. Working a pre-seed model with the BMC documents hypotheses as facts. The tool must match the maturity level — anything else is methodological folklore.
Sources for further reading
Five Tier-A sources anchor the argument:
- Strategyzer — Business Model Canvas (original template, Osterwalder/Pigneur)
- Joan Magretta — Why Business Models Matter (HBR 2002)
- Gartner — Business Capability Modeling
- Bitkom — Digitalisation of the Economy 2025
- IfM Bonn — SME definition
Frequently Asked Questions
That is the most common question, and the answer is a clear yes. Established firms need the BMC even more urgently than founders, because their business model has grown over years without ever being explicitly documented. In the Mittelstand we use the BMC before every ERP selection, every reorganisation, and every major digitalisation decision. It makes implicit knowledge explicit and creates the shared language between executive team, departments, and IT that any strategic architecture decision requires. Anyone starting an ERP selection without a BMC has no shared reference point — and ends up with a module choice rather than a strategy decision.
From over 30 years of project work we recommend two full workshop days with a core team of managing director, CFO, sales lead, production or service lead, and IT lead. Day one focuses on the customer and value-proposition side (blocks 1 to 4); day two on the infrastructure and cost side (blocks 5 to 9). At least a week between the days, so the team can back open points with data. Anyone pulling it through in three hours produces a wall poster, not a working document. Anyone taking longer than three weeks has the wrong people around the table or the wrong mandate from the executive team — both warning signals for the follow-on projects.
In an ERP context the BMC is not an end in itself but a precursor to capabilities mapping. Each block is translated into concrete business capabilities, and each capability is mapped to concrete ERP modules. Strategy work stops at “what do we want to do”; the BMC in an ERP context goes two steps further and answers “which capabilities do we need” and “which modules support those capabilities”. From my experience that bridge is exactly the difference between a selection decision that still holds in five years and one that gets recognised as wrong after two. A pure strategy slide without capability and module translation produces no robust system selection.
Next steps
The BMC is a tool, not a result. It only unfolds its value when embedded in the architecture work. If you want to use the BMC in your own selection, begin with an honest stocktake: can your business model be described on one page in under 30 words per block? If not, the preparation is the first step — before any requirements specification, before any demo, before any vendor contact. We accompany the initial mapping in two workshop days and then hand over to the capabilities phase. The first conversation is free and leads to an honest assessment — not to a proposal weighed down with method overhead.
