In my last Monday post I brought up the topic of Business Technology, BT, as the name for the new generation of web based technology, as opposed to IT and PC based technology, ending by posting the question. ‘What is the Business Architecture that would gain value from Business Technology?’
This post is based on collecting, and collating, a wide variety of views and is my attempt in one quick post to provide an ‘ah ha’ moment that may help others. I believe there are three key elements that are delivered by Business Technology, BT, and it’s the first two that create the reason for the third being the break through that is already starting to drive business models, and therefore will lead to technology architecture.
The first is the ‘Long Tail’, the ability to use the globalisation of Internet connectivity with the specialisation of addressing a market comprised on limited numbers of individuals that have very unique demands. The whole developing Web 2.0 world has shown countless examples of how to make ‘social’ groups of shared interests into viable ‘long tail’ market places, an effect which I have described on several occasions as ‘Globalisation meets the Long Tail’, but in reality perhaps it is better thought of as ‘Personalisation’.
That leads to the second element, that of ‘Collaboration’ where by the flexibility of people leads to changes in the way a business can be administered, but without disturbing the existing IT procedures. In a Long Tail business model the one size fits all procedures of existing IT clearly won’t work in terms of the engagement model with the resulting numerous external markets. Here Web 2.0 technology can provide capabilities to link ‘events’ with ‘people and expertise’ to provide answers that can then lead to an action, that hopefully finally leads to a sale which can be recorded in the existing IT systems.
What both of these illustrate is the third element; ‘Interaction’ between people, and between processes. This leads me to suggest that the Business Model, Business Architecture and the Technology architecture are all based on shifting to an ‘interaction’ based environment. In terms of the Business Model we currently understand the terms ‘proactive’ and ‘reactive’ in respect of choosing when to change our offerings, but in respect of a largely static environment. The launch of a new offering is assumed to be the beginning of another period of stability during which the new offering will maintain a competitive position in the market.
Our choice is whether to ‘proactively’ drive the market change for everyone; Apple iPod as an example, or ‘reactively’ catch up with an MP3 player under our own brand, such as Samsung. However, in Long Tail markets the key seems to be to ‘interact’ with the potential customers to decide together how to come up with an ‘optimal’ deal for both parties. Think low cost airlines for choosing flight times, costs or destinations, or since I used the music industry, Radiohead with its offer to allow its fans to choose how much they paid to download its latest album. This same principle shows up time and time again in a wide variety of markets.
Now if that is the value proposition for Business Technology, BT, in terms of creating new markets, new revenues, even new products, then it needs the Business and Technology architecture models has to support this. And that’s a really big topic! Actually it’s the topic for my new white paper that I am planning to write over the next six weeks when business life is a little less hectic here in Europe! So any contributions and thoughts on this are welcomed!