Tag: transaction

A Solutions Triptych, Panel I: The Portal

In business, the term “solutions” has a particular meaning. It refers to the results of conversational transactions wherein the needs and wants of a customer are identified and appropriate responses are made through a business (or multiple businesses) that satisfies those needs and wants for which the business is compensated. These appropriate responses are “solutions” in that in the moment they solve the problems of previously unmet needs and wants.

Conversational transactions between customers and business are conducted through a portal that connects “someone” having needs and wants with “something” that constitutes a solution. This concept of a portal is characterized in the diagram below as the overlap between what something and someone are not and what something and someone are. The relationships of solutions to customers are rarely anything to anyone. Instead, they are specific. While it is helpful to know what is not a viable solution and who is not a likely customer, at some point a match between someone and something must happen or the transactions will not be fruitful.

As a result, it is in the best interest of a business to know the needs and wants to which it will respond with solutions. To know them is to know the customer and to know the customer is to know the market. As we all know, businesses whose compensation is less than the cost of providing the solution are not in business for very long barring subsidization. Knowing what a solution costs is critical to business success. Along with this is the need to know what type of solution portfolio best fits a business given its culture.

Needs and wants are met by solutions of different types. For instance, if a person wants to improve the quality of their sound system they can upgrade their speakers with a new set and are satisfied with the difference they hear. In this case they are interested in a component solution. However, a person may want to make an even more substantial improvement in the sound quality by replacing all components with more advanced, integrated alternatives. In this instance, they are more interested in an equipment system solution. Some circumstances lead to an even more comprehensive approach. In building upon this example of a home entertainment system, a person may be designing and building a new home at which point it is no longer just a matter of the equipment system alone, but the layout of the space in which that system will be installed. In other words, their interests move toward a total solution.

Solutions are fractal in that depending upon the starting point, the continuum of component – system – total solution can be indexed along a scale of increasing complexity. Determining where on this complexity scale a company wants to be is critical for its strategy and organization design. As the diagram indicates, the connections through the portal vary in size depending on choice. A tendency toward component solutions places more focus on a portfolio of specific and relatively independent products and services that flow through a narrow, well-traveled pathway in the portal. The trade-off is a higher degree of similarity / commonality with the offerings of competitors; the portfolio is commoditized and competitive environment is head-to-head. A tendency toward total solutions opens the portfolio to include customized packages of integrated products and services. The pipeline between customer and business is enlarged with more opportunities. Attention must be given to the performance of the whole, which invites an entirely different type of challenge. But the pay-off comes in differentiation from competitors, which certainly carries an advantage in many circumstances.

Originally posted to New Media Explorer by Steve Bosserman on Monday, September 26, 2005

A Philosophy of Solutions

There are myriad ways in which we humans understand ourselves and our needs and wants within our experiences of the world around us. Self-awareness coupled with the dissatisfaction resulting from unmet needs and wants motivate us to influence circumstances in an effort to have a more favorable experience—to find a solution. Contentment, if ever achieved, is fleeting. The viability of a solution just found crumbles in the face of curiosity, “antsiness,” or ennui as further needs and wants rush in to renew the cycle. While this predicament may appear to be a routine fueled by frustration, the continual search for solutions is the creative impetus that advances every aspect of human civilization.

Solutions exist at multiple levels. The one most familiar to us, personally, is at the mind level. Despite our immediate circumstances we can always dream about a reality quite different from our current condition. In the realm of the imagination all realities are possible. Even though I may not have the details, the mental world in which my solution is envisioned is different than what I experience in the physical world; and it is preferable. This reality envisioned is a powerful construct, that when acted upon externally has the potential to bring a solution into existence at other levels.

Solutions stated are externalized. Whether verbalized, graphically represented, or physically demonstrated, the act of moving a solution from the mind to the surrounding world externalizes the solution. It becomes an agenda item in a forum outside myself and initiates conversation with others. Those in my family or community or workplace react to it by doing nothing or something, but react they must.

Solutions experienced externally are virtual or material. For instance, I can play soccer on a real field in a real stadium with real teammates and a real opposing team or I can play soccer on a virtual field in a virtual stadium with virtual teammates and a virtual opposing team. In the first case I am required to be somewhere at a specific time with the proper equipment and be prepared to expend a great deal of physical and mental energy for the duration of the game and run considerable risk of getting exhausted or injured. In the second case, I have an avatar who responds as I dictate within a virtual space wherein my teammates and the opposing team are similar representations. The game can start whenever and be played by whoever shows up online or I can make up my own players and have my own game independent of others. Fatigue and injury are still possible. However, eye fatigue from staring at the screen too long and injury to fingers and wrists due to excessive rapid maneuvering of the joystick are of a different nature!

The cost of designing and developing the material solution dictates the use of a virtual solution. When the cost of the material solution is quite high and testing is essential to manage risks, modeling that solution virtually at the outset carries significant value. Buildings, equipment, vehicles, appliances, even construction and manufacturing systems are likely candidates for designing and developing the virtual solution first to prove the concept before converting it into the much more expensive material solution.

Virtual and material solutions are transactional. Once solutions are expressed in the external world by whatever means other people experience those solutions and have conversations about them. Our desire to see our solutions be successful defines needs and wants for information, resources, and authority beyond what we can muster by ourselves to fulfill our solutions in the virtual or material realm. These needs and wants lead us to conduct conversations with others in transactional patterns to gain their understanding of, agreement with, and commitment to or permission for our solution to advance. Many times the world easily accommodates our efforts to advance our solutions and the transactions required to carry them out are minimal. Other times, though, the social and natural systems are perturbed by our solutions such that we are compelled to engage in numerous transactions to move forward with our solutions.

Transactions are economic. I need or want information, resources, or authority that others have and I must negotiate with others to get it. Either they give it to me through some altruistic motivation or we come to an agreement where I get it in exchange for something I give them. The nature and type of transactions I conduct to get what I need and want are directly related to the importance and urgency I have for my solution to be successful. As a result, transactions are governed by social convention, ethical and moral frameworks, conversational skill and savvy, and immediate personal circumstances. Transactions constitute the medium of exchange within an economic system by which solutions are externalized within the political and business arenas.

Originally posted to New Media Explorer by Steve Bosserman on Sunday, September 18, 2005 and updated on Saturday, September 24, 2005