Platt Perspective on Business and Technology

Rethinking vertical integration for the 21st century context 1

Posted in business and convergent technologies, strategy and planning by Timothy Platt on November 2, 2015

I have written a lot in this blog, about how important it is that a well-run business focus its resources and effort in support of its core business goals and priorities. And I have written in as much detail and at as much length here, on the importance of pursuing a competitive edge, building the business to more effectively provide what is at least locally for its marketplace, a unique source of value for its participating consumers. I have, to be more specific in this, written on an ongoing basis about building lean and agile, with a focus on what for the specific business would be its best, most appropriate operational essentials and just them.

At the same time and coordinately with that, I have written about supply chain and related collaborative systems, and about how business-to-business collaborations can create and sustain value synergies, where each participating business contributes its particular core functional, and product and service strengths to its partner businesses, in exchange for competitively valuable support from them where they are stronger. Each of these businesses focuses on its own strategy and operations and on what it individually can do best, and on what is most essential for it to do if it is going to be able to cost-effectively and profitably offer its particular core products or services as efficiently as possible. Each, more particularly for this context, offers what it does best to its partner businesses, fulfilling for them what are their more secondary but still necessary functional needs, where third party specialist support would be more cost-effective than trying to do everything entirely in-house. Put in terms of the above paragraph and its points made:

• This means that each of a group of businesses that primarily work in different business sectors from each other,
• Systematically, strategically working together to make all of those businesses stronger as a result, by making it possible for them all to be that much leaner and more agile in what they do.

My goal for this posting is to at least begin to explore what is becoming an increasingly important contextual detail of business strategy and planning: the manner in which ubiquitous communications and information sharing, and always-on everywhere-to-everywhere connectedness are reshaping what is possible. And thinking ahead in this series, that means:

• Addressing how our modern communications and collaborative information developing and sharing systems are changing, and will continue to change
• What cost-effective, and lean and agile even mean for a business,
• And both as it seeks to operate alone, and as it would enter into business-to-business collaborations in order to benefit from synergies collectively created.

This is the first installment to what I expect to develop as a relatively brief and specialized, but still significant series. And my goal for this first installment is to at least informally define and begin to explore a core concept that informs some key areas of my overall business development and management approach: the value creation footprint.

• In essence, a business’ value creation footprint is the complete ensemble of operational processes as executed and maintained in ongoing practice,
• And the system of resources that are necessary in order to maintain and carry through on them. This second, infrastructure base is the supporting infrastructure footprint.

Note that this organizing model does not necessarily mean lean and agile. Less efficient businesses that are replete with systems duplications, and that seek to support what for them are irrelevant functions and services have value creation footprints too, and infrastructure footprints, and even what might be considered morbidly obese ones. Attempts to operate competitively while allowing the continuation of gaps in the operational systems that should be in place do not necessarily make a business’ value creation or infrastructure footprint any smaller either, and particularly when that enterprise finds itself attempting to compensate for its lacks with operational workarounds and patchwork fixes. Gaps in what is in place and in what should be there in an effectively lean and agile organization can in fact cause bloat proliferation in its footprints, and more rapidly and perniciously than just about anything else. And in fact when you see bloat there, one of the most important points to look for is where the gaps are in what should be a business’ essentials, that it is trying to work around in order to keep its doors open.

• This series is about these footprints, and both as concepts and as diagnostic and prescriptional tools.
• And it is about how our rapidly emerging, always online and everywhere-to-everywhere connected context is changing the business’ overall combined footprint that emerges as a combination of these two elements,
• And both for what goes into it and how,
• And for what would constitute a lean and agile ideal for that enterprise: a combined footprint that is complete as-is for the here and now, and that is due diligence-buffered by carefully considered added capacity to allow for change and the unexpected too.

I am going to expand upon what the value creation footprint is, in my next series installment and will then turn to consider how this defines what would go into an effectively optimized infrastructure footprint. And after discussing these as concepts and tools, I will begin a discussion of how they are shaped by context, building upon the points that I have just begun developing here in this Part 1. Meanwhile, you can find this and related postings at Business Strategy and Operations – 3, and at Page 1 and Page 2 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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