by Philip Boxer
Charlie, Referring to your last blog on responding to diversity in value models, you are of course right that it is not possible to consider the supply-side without at least implying a particular relationship to the demand-side. What is interesting is the supply-side logic that governs the way in which the supply-side looks at the demand-side. Thus a car manufacturer ‘projects’ onto the demand-side all kinds of assumptions about what it is interested in. In asking whether it is useful “to look at the demand-side variation independently of the supply-side”, I was asking under what circumstances the demand-side logics governing use could be considered independently of supply-side logics… arguably any market where there is a significant degree of standardisation and commodification is one where this separation of logics is taking place. Thus managing mobility separates from the choice of automobile or airline, and managing connectivity separates from the choice of particular digital platform (qua iPod, mobile, handheld etc).
It was for this reason that Richard and I tried to separate out the three asymmetries in the Governance paper. Clearly the dilemmas and trade-offs you raise dominate when dealing with the first asymmetry (the technology is not the product) – as you graphically illustrate with the example of the SUV. This is also true when dealing with the second asymmetry (the business model is not the customer’s solution), but to a lesser extent. Thus with the second asymmetry, the low fares/low cost business model established an alternative solution to that offered by United, American etc, confronting those airlines with the necessity of using a varying business process model depending on the characteristics of the market segment being addressed. It is managing this second asymmetry that has dominated much of the flattening/restructuring/ outsourcing of businesses in the last 25 years or so (and perhaps the remarkable increases in the productivity of US businesses).
And you are right to point out that the equilibrium established in relation to any given asymmetry reflects the economies of scale and scope that limit how much diversity can be spanned – modified of course by the constraints placed on competition. It is managing this constraint that your paper addresses so well, and which ultimately necessitates the dominance of supply-side logic.
But it is with the third asymmetry (the customer’s demand is not the customer’s experience) that something new happens. Thus the customer’s demand may be necessarily dynamic (the way they use ICT in support of their business), or necessarily emergent (the way the patient’s chronic condition develops over time), or just idiosyncratic (each client wants their investments managed in a way uniquely suited to their family situation). In each case, there is a need to orchestrate available commoditised services and products and add a new level of interoperation through the way they are composed with the experience/life/situation of the client-customer in a way that is particular to both the time and the relationship – adding a new level of business model that itself becomes real-time (real-time business). This presents a new challenge, particularly in the way the role of software architecture needs to be understood, because from the point of view of any one service or product, these new uses are emergent.
The metaphor I like is that of heart transplants – however well the transplant operation is conducted, and however good the nursing, if the immunological response of the host body is not managed in a way that is particular to that body, the transplant will fail. In the same way, managing the first two asymmetries is necessary but not sufficient for managing the third asymmetry…
It won’t surprise you to know that our work involves supporting the needs of real-time business – defining the strategies, identifying and mitigating the risks, creating the governance. But it is a difficult terrain to distinguish. How are we doing!
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by Philip Boxer