Here is a scenario, someone inside your organisation (Alice) has a great new idea for a widget, but doesn’t know how to implement the processes or systems to produce, package and deliver the widget. At the moment the widget is just an idea, not an actual product, so first Alice needs to talk to the early adopters support department (ASD) to refine the product idea. So who are the ASD folks? they are of course the elite task force members of the same department as I.T Alice’s customers. So Alice collaborates with ASD, establishes that it’s a go product and refines the widget requirements. She then hands over the widget reqs to the buying department (BD).

The members of BD actually have two roles, the first is to coordinate the just-in-time (JIT) manufacture and supply of widgets. Their second role is of course as the I.T department for a number of Widget manufacturers. Because Alice’s widget has never been made before a few of the BD folk are acting as the JIT supplier’s ASD task force. After collaborating with the JIT suppliers via your I.T systems a widget solution emerges to meet the costs and quality targets established by Alice’s ASD task force.

Alice is now happy to move forward with widget production and delivery, so she engages with the marketing and communications department (MCD). Who are the MCD? well the MCD are the same department as the I.T. department, her customers of course. What Alice needs to do is collaborate and engage with her customers in order to help them understand the new widget. She is hoping that they will like the new widget as much as the ASD folks. Of course the ASD folks are also members of the MCD themselves and collaborate with other members of the MCD by engaging in conversations around the new widget, assisted by Alice and here colleagues. But Alice has been here before and knows this is no time for sitting on your laurels, there is still much to do. So she listens to the MCD and tweeks the widgets to help them slip through the MCDs more quickly and in growing numbers, the widget becomes more and more refined and more and more slippy until one day Alice realises she has a hit. But she doesn’t go all Britney Spears about it, because she knows it wasn’t her achievement, she recognises she was just helping to Teflon coat the tubes, so she makes sure that all of the departments know how insanely great they were with this widget. Just as she is doing this one of her colleagues engaged with an MCD, notices they are doing something different with the widget and suddenly has this brilliant new idea….

Examples of customer I.T : Blogs, getsatisifaction, twitter, wiki’s, social networks, VRM and lots more coming…..

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