Is value generation the key to digitization?

Written by on August 13, 2015 in Guest Blog with 0 Comments

business plan on wallI have read quite a lot about the pros and cons of digitization, how to adapt, the need for changing business models etc. Lots of the content seems to have the flare of ‘same thing different date and wrapping.’

What I mean by that is that the traditional technology-driven functional requirements, Technology Execution-based Project Management approach and methodologies are the same. Most arguments and discussions are general and do not distinguish between business types.

All in all, it is as if everyone bases their arguments on the same slide presentation and bullet points coming from the last keynote speaker.

Personally, and please feel free to disagree, I think some distinctions need to be made.

Before I proceed, let me say that this blog post is mainly targeting the communications industry, however some of it may be relevant to other industries as well.

Firstly, let’s assume there are three types of business:

  • Infrastructure business
  • Product Innovation business
  • Customer Centric business

All the business types have three very strong forces:

  • Economical
  • Market Conditions
  • Culture

To make it really interesting, these forces are very different within each business type.  In larger corporations such as a full service CSP (Communications Service Provider), all these business types may exist, however they become conflicting and generate political bickering and destroy value generation.

Value Generation

An organization is made up of (high level):

  • Physical elements
    • Buildings
    • Equipment
    • People
  • Logical
    • Brand
    • Processes
    • Software

Plus external:

  • Regulatories
  • Suppliers

Collectively all these elements forms an organization’s ecosystem. For the ecosystem to generate maximum value that benefits your customer, your corporation and employees, all these elements need to interact optimally.

Back to my point of project management, and technological execution: Most projects, particularly OSS/BSS, value generation are viewed as being generated vertically, as such solution become part of sub-optimization in the long run. – Why do CSP have lots of rating, provisioning, billing systems. To mention just a very few. Does this help generate value across the ecosystem?

Board and senior management tend to look at generating value across the entire business, and that is as much horizontal.

And then, my point about business types:

It is quite common for traditional CSP that has invested billions in upgrading their network to i.e. 4G to embark on a major campaign making sure the public get to know about the features and coverage, with the sole aim at generating traffic. Hence, most CSPs are Infrastructure business. Their (high level):

  • Economical drivers are based on very high investments, and scale traffic.
  • Their market condition are based on very few competitors each with relatively high market share
  • Their Culture are engineering

Are the same CSPs capable of investing equally to become customer centric?

  • Economical driver are based on high customer acquisition cost. Sales staff with target customer segment knowledge and ability to position against value propositions.
  • Have very sophisticated Customer Experience measures
  • Culture that is account management and becoming strategic partner or preferred supplier as goals and very result oriented

And then telling their powerful engineering group that their power is going to be diminished and equal to front end functions. The latter is probably more challenging than the investment.

In summary, my point is that to be competitive in this digital age it would benefit an organization, their employees and above all their customers to take an approach that documents what constitute VALUE GENERATION and how should the elements in the business architecture interact and stay dynamic to new ecosystem elements that will need to be adopted in the future.

To achieve this we need new approach and methodologies. This DOES NOT mean we cannot benefit from existing best practices and expand on them.

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Cato Rasmussen

About the Author

About the Author: Cato is an industry veteran and Subject Matter Expert bridging Business Architecture and Support Architecture with more than two decades hands on leadership and management experience performing complex Business Solutions project. Cato also regularly speaks at industry events. He has experience from working with vendors, service providers, management-for-hire and consulting. .

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