Wardley map is a business strategy method named after Simon Wardley, who created this method in the period 2005-2010 and gradually improved it into its current form. Wardley map determines the business landscape containing a value chain, where the position of each component is determined by two criteria: by the level of the component's evolution, and by its visibility to the user. As the components of the Wardley map form a value-adding process, in this short paper the authors would like to explore the hypothesis how does Wardley map match the REA ontology, and whether using them together could lead to additional insights about the business and to a more complete business model.
A Wardley map [
Compared to traditional techniques such as a business plan or SWOT diagram [
It has been reported by Leading Edge Forum [
Central element of the Wardley map modeling framework is a value chain, illustrated in Fig 1. The value chain can be used to derive other elements of Wardley Mapping framework, such as customer journey, doctrine, and company purpose. Wardley map in Fig. 1 can be read as follows. Like a topographical map is oriented towards the North at the top, Wardley map is oriented towards the Customer, user, or other stakeholder at the top. Below the customer are the customer needs that the company tries to meet: Online image manipulation, Online photo storage, Print and Web site. Below are the components that are required to meet these needs and are under company control: CRM, Platform, Computer, Data Center and Electric Power. The position of components in the y-axis illustrates visibility to the user, the components lower down the map are less visible to the user. Position of the components in the x-axis represents the stage of evolution of the component, from the genesis phase, i.e. the rare newly discovered components, to the commodities on the right hand of the spectrum, i.e. highly standardized products and utilities that fit specific purposes.
The evolution dimension (the x-axis) determines additional characteristics of these
components, also described in Chapter 2 of Wardley Maps [
The evolution stage of the component also determines the optimal organizational structure. Wardley maps divide people into three groups, based on their mindsets and skills: Pioneers (they like experimenting), Settlers (can turn a prototype into a product) and Town Planners (understand the economies of scale): Pioneers best contribute to the components in the Genesis phase, Settlers to the Custom build and product phases, while Town Planners best work with commodities.
The evolution stage also determines the methodological approach for development of
these components: Agile methods (embracing change) fit best to the components in
the Genesis phase, Lean (focusing on improving value and reducing waste) fits to
Custom Build and Product phase, while 6-sigma (data driven, reducing deviations) is
best applicable to commodities, where stability, efficiency and price are most
important. In Wardley maps it would be a mistake to form a team that is responsible
for the components in different stages of evolution, as they require different
approaches and people with very different mindsets.
Semantics of the components on Wardley Map is not formally specified. Simon
Wardley writes the components represent activities, practices, data and knowledge,
other authors, such as Ben Mosior [
In authors’ current understanding, Wardley Map only describes conversion processes, and does not describe exchange processes. Although many existing Wardley Maps include Payment capability, this capability is understood as service allowing the customer to pay for the provided services. Likewise, Wardley maps for a financial institution include needs of financial flows, but the focus of the map will be on components enabling these financial flows, rather than monitoring what has been exchanged for what. Nevertheless, Wardley map distinguishes between users and customers, that is, the company provides products and services to the users, but often a different stakeholder, the customer, pays for these products and services. Suggested mapping between the REA concepts and Wardley map is illustrated in Table 1. User, customer, and other stakeholders at the top of Wardley map correspond to the economic agents in the REA ontology. The need relationship in Wardley map can be described by the REA conversion process, where the elements at the lower end of the relationship are the economic resources used or consumed in order to produce the economic resource at the higher end of the relationship. We can also see that the Enterprise provides the Compute capability in order to receive CRM, see Fig 3. «need» «economic resource»
CRM «produce» «economic event» Use Compute
Resource
«use» «economic resource»
Compute «receive» «provide» «economic agent»
Enterprise
Fig. 3. Need relationship (left) and corresponding REA model (right)
Biccheri and Ferrario [
Users are at the top of a Wardley Map. The components linked to the User are called “user needs”, however, these components often represent products or services, and the actual user needs are implied. It brings focus of the map to the user and to substitutions of the services and products, essential in understanding and adapting business strategy. For example, cable TV can be substituted by streaming TV services, while the user need, the home entertainment, is implied.
The value chain described using a Wardley Map can be described by sequences of conversion processes in the REA ontology. Applying the axioms and consistency rules of the REA ontology will lead to the discovery of additional components in the value chain, and consequently to better understanding of the business landscape. The REA axioms will also help creating of Wardley map consistent from the economic point of view, not only relying on the business instinct and experience of the map creator.
A typical Wardley map is drawn from the perspective of a single company, i.e. from the “trading partner” perspective. The REA ontology can provide a model from the perspective of an independent observer, thus modeling a business ecosystem of customers, vendors, partners, and competitors. There might be a potential benefit for Wardley map to produce maps for business ecosystems, for example, when the customer has several needs that must be met simultaneously, and they are met by different companies.
As creating the REA model from Wardley map is straightforward and could be easily automated, the resulting REA model can be used as a system specification of a software application for planning, monitoring, and control of the business processes described by the Wardley map. As there are published Wardley maps both for various business scenarios, company processes and even industries, they can serve as templates for the REA models for these business scenarios, company processes and industries. 5
Authors would like to thank the reviewer Iván S. Razo-Zapata of Vrije Universiteit Amsterdam for valuable feedback and for the references to publications on ontological analysis of needs and on related topics.