A Solutions Triptych, Panel III: Value Proposition Redefined

The virtualization-to-realization continuum introduced in Solutions Triptych, Panel II portrays two different sets of activities on either side of a portal through which identified opportunities for solutions are met by packaged and delivered solutions. The graphic below expands on this concept by highlighting adjoined, three-dimensional “conversational spaces” representing virtualization and realization separated by a porous “communications grid.” The portal acts as a conduit between them directing the flow of conversations taking place on either side and through the grid.

The forums and agendas within these two conversation spaces are highly interdependent. While the virtualization characteristics (intuitive – intelligent – integrated) and realization characteristics (cost – quality – schedule) are certainly different, they are of mutual interest to the customer and the solution provider. Both strive for improvements in cost, quality, and schedule and both see the direct benefit in terms of better realization performance from wider adoption of virtualization characteristics.

The forums and agendas for solutions-focused conversations and the subsequent flow of solutions through portals are also shaped by the type of solution considered. The diagram below illustrates the three solution types introduced in Panel II – product, system, and total – positioned in the conversational spaces. Also captured in each type are the order and distance between the “point of virtualization” (PV) and “point of realization” (PR). These relationships have a direct bearing on the way in which conversations are conducted and their results.

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A customer’s negotiation with competitive businesses in the selection of a product solution is not the same negotiation when choosing a system solution or total solution. In other words, the value propositions are not the same requiring different formulas to reach a decision. The defining factor for a value proposition is who is doing the integration and why.

In product solutions, the customer is the integrator. The customer is the only one who knows the context in which the product solution being proposed fits. As a result, the customer is in control of the integration of multiple product solutions into more complete and comprehensive system and total solutions.

In the opposite case, a business playing the role of integrator delivers a total solution to the customer. The business is in control of the integration. This assumes three conditions are met: the business understands the context in which the customer operates; second, the business is capable of delivering a better, more cost effective total solution to the customer than the customer could have done alone; and third, the customer has viable options for spending time and energy other than doing integration. Missing any of these three conditions and the value proposition crumbles resulting in unmet expectations for all concerned.

As is often the case, the truth rests in the middle as with the center graphic where the customer and business share integration responsibilities and co-manage expectations. This middle ground produces opportunities for businesses to check contextual understanding and for customers to play with integrative alternatives. The resulting value proposition grants businesses the latitude to “virtualize” an array of system solutions before building inventories of realized product solutions that may or may not be sold and turned. Meanwhile, customers are able to experience system solution alternatives in virtual space before making a buying commitment to a set of product solutions that may or may not integrate effectively or truly be responsive to actual needs and wants given the context.

This suggests that customers and businesses give strong consideration to three sets of questions within the conversational spaces separating them as their negotiations begin:

Business: What is the customer’s context and how do I describe it so the customer knows I know?

Customer: What is the scorecard I follow that lets me know a business truly understands my realities?

Business: What can I do to make the customer’s virtual experience with solution alternatives more intuitive, intelligent, and integrated?

Customer: What can I do to make the real experience fit within the cost – quality – schedule parameters I have?

Business: What alternatives can I offer that capture the interest, curiosity, and commitment of the customer in lieu of doing integration?

Customer: What are the unrealized opportunities I can pursue if I had the time, energy, and capacity to do so?

These question sets constitute new agendas for businesses and customers to use in their conversations with one another as they BOTH learn to adapt to rapid changes in information and communication technologies. In fact, this learning about, with, and from one another – business and customer – is an essential feature of the shift gradual, but inexorable, shift to total solutions. Then again, isn’t learning the point behind whatever we are doing, or if it’s not, shouldn’t it be?

Originally posted to New Media Explorer by Steve Bosserman on Friday, October 7, 2005 and updated on Saturday, October 8, 2005

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