Platt Perspective on Business and Technology

Interoperability, third party provider support and first mover advantage – 2

Posted in business and convergent technologies, outsourcing and globalization by Timothy Platt on February 17, 2012

This is my second installment in a series on unique value propositions and sources of unique value in individual businesses, with a focus on businesses as they function in supply chains and larger value chains, and in complex business and economic ecosystems. In Part 1 of this series I outlined how these sources of unique value can arise and develop throughout the organization and not just in the qualities and features of its products and services as offered to end-users in its marketplace.

Unique value propositions can arise and offer a business real marketplace strength anywhere in its operations or practices too, where they impact on the marketplace and on customer experience there. And a core concept that I noted in Part 1 is that most businesses, in general, do not even know where their sources of unique value reside in their systems, or what a complete inventory of these sources of value would include. I find myself thinking back to my experience working with retail operations as I write that, and the way they tend to view their most successful rainmaker salespeople as sources of success mystery, rather than examining their best practices as sources of replicable value that others could be trained to convey too, through improvements in their customer relations and sales best practices (see, for example, Rainmaker Myths and Traps, and Rainmakers as a Source of Shared Best Practices.)

• As I stated in Part 1 of this series, a business should retain and maintain in-house its true sources of unique value and its unique core strengths, limiting any cost-savings outsourcing that it engages in to parts of its operations and operational processes to non-core areas.

As an immediate corollary to that I would state that:

• A business cannot effectively function, and certainly long-term in supply chains and complex business ecosystems to the extent that it fails to identify and act upon its real sources of unique value proposition. It is not even going to know where it might be giving away its sources of uniqueness in its marketplaces and to its customers and end-users.

And this brings me to a key question. Businesses increasingly operate in global contexts, and both with respect to the marketplaces they reach out to, and with respect to the partner businesses they rely upon in successfully reaching those markets. How is a business supposed to identify what makes it unique, and of that what offers it true value as opposed to simply representing difference per se?

• Ultimately, this cannot be answered through internal-to-the-business analysis and review alone. This depends on a detailed and nuanced understanding of business practices as actually practiced – not just as discussed in principle, in the industries that business operates in.
• I add here that “unique” in this context means absent from its competition and in others it would potentially compete with, and that primarily within its industry.
• And looking at this from a somewhat different perspective, this means unique as viewed by its customers and end-users, and for their expectations for the types of products and services that this business provides.

Broad based in-house experience can offer real value here but this insight can, in and of itself, be obtained from the outside and from networking and from crowd sourcing. And in an increasingly interconnected and globally reaching business context, cultivating and developing outside sources of fresh insight of this sort are essential.

As a final thought here for this posting:

• If in doubt as to the uniqueness and centrality of a process, step or approach in your business and its operations, a more conservative approach would be to retain it in-house rather than risk sharing it and losing it as a source of unique value.

With that and noting that I now write in apparent repudiation of a point already stated, you may still see overriding benefits to outsourcing an apparent source of unique value anyway and perhaps even when that means risking your seeing your direct competitors benefiting from it too. That brings me to the topic of my next series installment where I will discuss issues of transient and short-term, and sustaining and long-term value, and the calculus of tradeoffs that balancing them demands.

You can find this posting and series at Ubiquitous Computing and Communications – everywhere all the time and at Outsourcing and Globalization as the supply chain and value chain business ecosystems that are discussed here are increasingly global in reach and participation. You can also find related postings at Business Strategy and Operations and its continuation page, Business Strategy and Operations – 2.

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