Value creation technology

1. Value creation technology Changing the focus to the group

2. Objective • The sources of value • What are the focused dimensions for releasing IT potential? • Value Patterns

3. Value creation defined • Anything that someone might consider useful, important, or desirable. • Economic value: wealth, resources • Physical value: well-being, comfort • Emotional value: security, excitement • Social value: effective relationships among people • Cognitive value: knowledge, wisdom • Political value: power, control, influence

4. Sources of Value (I) Novelty Value Efficiency Lock-in Complementarities

5. Sources of Value (II) • Complementarities • Between products and services for customers(vertical vs. horizontal) • Between on-line and off-line assets • Between technologies • Between activities • Novelty • New transaction structures • New transactional content • New participants, etc.

6. Sources of Value (III) • Efficiency • Search costs • Selection range • Symmetric information • Simplicity • Speed • Scale economies, etc. • Lock-in • Switching costs • Loyalty programs • Dominant design • Trust • Customization, etc. • Positive Network externalities • Direct • indirect

7. Value creation efforts • Methodology (reasoning process) • Potential intellectual bandwidth with two complementary parts • Degree of information assimilation (make sense of something) • Degree of collaboration (a suitable pattern of attention dynamics)

8. The information focus • Data infrastructure (IT capacity) • Find—store—retrieve—transform—display • Communication infrastructure (collaborative activities) • Talk—send—gesture—show—share Knowing is not the same as doing. Doing is not the same as sense making.

9. Sense making process • From tacit to tacit (socialization/mentorship) • From tacit to explicit (externalization/publication) • From explicit to explicit (combination/communication) • From explicit to tacit (internalization/assimilation)

10. Attention dynamics focus • Forms of organization in teamwork • Collective effort: as the sprinters • Coordinated effort: as the relay • Concerted effort: as the crew • Patterns of attention dynamics • (diverge—converge)—(organize—deconstruct)—understand—(elaborate—abstract)—(analyze—synthesize)—(consensus—agree) Some facilitated managerial mechanisms are needed.

11. Schematic of Thompson’s technology classification Sequential interdependence for long-linked technology Output Input Pooled interdependence for mediating technology Input Output Reciprocal interdependence for intensive technology Input Output

12. Coordination patterns for different technological interdependence • Reciprocal dependence—mutual adjustment • Value resulted from intensive interactions, e.g., R&D • Cross-function teams, face-to-face, unscheduled meeting, full-time integrators, standardized recruiting, required professionals • Sequential dependence—planning • Value resulted from standardized outputs and seamless combinations of which, e.g., manufacturing • Scheduled meeting, task force, vertical communication by supervisors • Pooled dependence—standardization • Value resulted from training, standardized skill & process, and resource sharing, e.g., sales & marketing • Rules, plans, procedures, interfaces High interdependence Low

13. The potential intellectual bandwidth • Information assimilation × attention collaboration Info assimilation Automated sense making potential intellectual bandwidth Database query Manual search collaboration Collective Coordinated Concerted Individual

14. Methodology • Ontology (Perspective、Standpoint、Focus) • Epistemology (assumption、argument、hypothesis, model) • Method (operation/analysis skills)

15. Work methodology focus • A repeated work process, an accepted working norm, a ubiquitous processing paradigm • Reason • Understand the problem—develop alternatives—evaluate alternatives—choose alternatives—plan for action • Act • Execute—coordinate—track—adjust—control Anything existed should be allowed for challenges. Core competences may be turned into core rigidities. Keep the expertise personnel flow in some degree.

16. Implications • IT metrics must be value based(contributed to information or collaboration) • IT/IS development will evolve into organizational structuring (communication channel/interaction mode) • All technology will be collaborative • Shift to sense making (not only symptom alerting but also value oriented innovation) • Moving to mass configuration rather than mass customization (the dynamics of relationship could be redefined)

17. Extending readings • Stabell, C.B. and O.D. Fjeldstad (1998), “Configuring Value for Competitive Advantage: On Chains, Shops, and Networks,”Strategic Management Journal, Vol. 19, pp. 413-437. • Nonaka, Ikujiro and Hirataka Takeuchi (1995), “Theory of Organizational Knowledge Creation,” in The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation, Oxford University Press, New York.