Now remembering of course that the purpose of business is to deliver value to customers, then it would suggest that your I.T should be adding value to your customers using the microcurrency of data. Obviously the data value your are delivering to your customers may not be the only form of value delivery, but it is an important part of the overall package value. For example Amazon.com delivers value in terms of convenience and data (user recommendations etc..) as part of any physical product it ships. Amazon ensures that it’s I.T delivers maximum value to it’s customers and that is how it makes decisions about what I.T to employ. It is also fair to say that different businesses offer different levels of data value to their customers, but it is also key to note that in any given market those maximising the data delivery components of the package are likely to provide greater value to their customers. With the obvious benefits that is likely to bring in terms of competitive advantage.

It is important to consider what information technology one employs or implements when focusing on customer value delivery. Historically much software has been built on the cost model rather than the value add model. Luckily that model is changing and I.T. is now moving towards service provision rather than software licensing. This is important as a focus on service provision is aligned with measured value delivery rather than some mythical ROI estimate that the vendor has conjured. When the service providers and internal value delivery network (formely I.T dept) are aligned on the common goal of customer value creation and or maximization, the business execution becomes economically focused, amplified and agile. The I.T performance can actually be measured, monitored, tweeaked and optimised to gain the maximum benefit for the customer and hence one’s strategic advantage.

Simplistic Delivery model

Data_delivered = IT_strategic + Data_input

and

Service = Human Capital + IT_utility

Thus :-

Customer value delivered = Data + Service + Product ,

= IT_strategic + Data_input + Human Capital + IT_utility +Product

Where product may be omitted in pure service organisations.

I would also suggest that strategic I.T be implemented as a combination of service provision and customization to provide strategic difference, enhancement and advantage. The types of strategic I.T service provision will vary but I would imagine some core services will include collaborative and communication tools alongside a new generation of analytical and even intelligent agents. Strategic I.T also favours multiple sources and customisation rather than single source, as that is how maximum value can be derived, unlike utility I.T where single source provision is likely to remain the norm. One other interesting point to those responsible for strategic I.T, you are likely to be sourcing your service providers much closer to those at the bleeding edge, you are in fact taking part in early adoption which is a very different position to your utilitarian counterparts. Further do not expect these service providers to supply R.O.I collateral like their utility brethren. Your focus must instead be on tacit knowledge capture and sharing, data transformation and leveraging as well as data discovery, these are good candidates for strategic data value advantage.

Innovation and trust will play critical and symbiotic roles for strategic service partners, so expect them to provide creative tooling on top of data standardisation and offer provisions upon scalable and trusted networks. In otherwords, expect these providers to supply innovative tools, yet have their operations running on proven trustworthy facilities or networks, then you get the best of both worlds. Also expect them to offer the flexibility to stage the provisions internally, collaboratively and externally in a seamless fashion. These providers should bend like the wind to your strategic requirements, but also operate symbiotically with trusted infrastructure providers.

As we peer into Information Technology’s crystal ball I see great opportunities for businesses focused on value delivery, greater value for customers and a golden period of I.T innovation around data as a microcurrency. I expect this to be fueled by a heady mix of entrepreneurs and developers, we really do live in interesting times.

Notes – Product itself may also have some indirect I.T component which could be indirectly expressed as : Product = Raw materials + Service

But I have omitted that for brevity, as I have also omitted the recursive nature of value add in service (service_out = service_factored + service_added)

*Note this post was originally posted here

So lets talk about money, once upon a time money was made out of stuff that had real value like gold and silver. When successful folks (todays equivalent of business folks) got lots of it they developed a security problem. Keeping their real money value safe was a job they had to achieve through physical means, like hiding it away in what they considered secure places in their establishments or even on their person. Unfortunately this was a risky business and many of these folks were often fleeced both personally and via their establishments. Some saw this issue as an opportunity and started services to safeguard folks wealth on their behalf. These innovative entrepreneurs of their time created secure buildings to house folks valuables under lock and key, charging for the privilege of securing their goodies. Soon these entrepreneurs thought of even better ways to provide their security services, they would use the funds secured in their premises to create new value which they could loan to other entrepreneurs that had great ideas or big projects requiring investment.

In case you haven’t worked out what I’m talking about yet, the securing establishments were of course what we now know of as banks, the techniques they begun to employ were ‘leveraging’ making more value out of entrusted value, money in this case. So why the hell am I talking about banks and money, this is meant to be an educational cloud computing post no? Which brings me to my point, there is actually a very important connection between that period and now regarding value and trust. You see decades before this time if you had suggested to the well to do business folk of the era that they let someone else look after their money, they would have laughed you off their land, probably waving a large pointy stick for effect. But of course things change, folks get used to such innovative ideas and get over their irrational fears.

Well it turns out right now that business data (another form of value) is rather similar to where money was all those years ago. Innovative cloud computing entrepreneurs are suggesting that maybe they would be better looking after the businesses data than the businesses themselves, in many cases they have good reasons to do so. They can specialise in securing such data better than any individual business because they are in the ‘looking after data’ business. Many businesses are however waving pointed words at the evangelists representing the new Data vaults, chasing them away as fast as they approach. This will of course change and many businesses are already seeing through the thin veneer of change to reap the operational benefits of concentrating on their business instead. Indeed the more entrepreneurial Data Vaults are also now playing the leverage card whereby data entrusted with them is being leveraged to create further and greater value enabling them to offer lower cost (even free) data services.

So what I am suggesting here? data = money? Not quite, but your data is valuable just like money, I would also suggest that just like the money which you entrust your bank with, is very similar to how you should treat your data. That is come to terms with the fact that the right third party is likely to do a better job of securing or leveraging that data than you could ever expect to. So the question for yourself is really just who you trust with it and under what terms would you feel comfortable. What you should not do is chase those that have already had the vision to see this with sharp pointey sticks, instead do your self a favour and engage them in conversation and confront your fears..

*Note this post was originally posted here