Principles and Practices for Orchestrating Digital Value Chains

Imtech is an example of a (Dutch) Tier 3 supplier which has been successful in closing several considerable IT deals (e.g. deal of 124 million euro). One of their success factors in my opinion is their diversification strategy. They are not only strong in IT, but also in engineering disciplines like Mechanical and Electronics. This has three benefits: Delivering engineering services to for example companies active in the automotive industry ensures Imtech has solid knowledge of that vertical, which can be leveraged on by the IT discipline. The disciplines Mechanical Engineering, Electronics and IT are fusing increasingly together within many types of industry, requiring cross functional knowledge to deliver maximum added value as a company (or partner with other suppliers). Having a contract with a company to provide electronic systems to control the chemical processes of a company, ensures there is an existing relationship the account managers of the other disciples can b...

A side effect of globalization and informed customers is a shorter lifecycle of products and services. The competitive pressures introduced by globalization and buying behavior of customers in combination with the fast past of technological advances, shorten the payback time of investments in R&D and new production facilities. This requires organizations to become increasingly flexible and agile in order to quickly adjust production volumes and product mix. The increasing complexity of services and products in combination with the ever higher investments required to improve quality, lower cost and renew the product and service portfolio, increase the entry barrier for new players. Within the banking and insurance industry several new players have gained considerable market share over the last couple of years by leveraging technological advances and the desire of customers for a bigger bang for a buck. Think of web-based brokers which allow consumers to trade stock, derivatives ...

Outsourcing IT to improve the capabilities of the IT to innovate and improve speed-to-market looks at first a contradiction. Typically outsourcing is used to reduce IT cost, with standardization and less responsiveness regarding new business demand as a side effect. However, outsourcing can actually help an IT organization to improve their speed-to-market and ability to deliver new services that add value to the business. A business that wants to grow again after a period of economic downturn and expects IT to act accordingly. There are two basic keys to achieving this goal. First key The first part is understanding that the dynamics to manage on speed-to-market and innovation is fundamentally different from delivering reliable (standard) solutions at high availability levels. The first type of service requires agility, flexibility and a general focus on benefits. The second type focuses on reducing the change of an operational risk materializing. In other words: solid build, tes...

This blog is a follow up on this piece in which I wrote on some of my experiences with IT shared services in the government sector. Here I want to write about two solutions which would improve the success rate of a shared service center. Practical example The organization is a grouping of local government agencies which have a long history of semi independence. Policy is partially dictated from a ministry and national politics, but there is also room for local decision making. To align, the governors of the local agencies gather on a yearly basis to agree on long term policy and cooperation. One of the decision was starting an IT-shared service center some ten years ago, because the processes of the agencies showed considerable similarities. However, these similarities turned out to be far fewer than expected and every local agency had a list with arguments why its deviations had to stay. The result was IT systems which had more custom code than common code. The SCC was in ...

To execute innovation for low cost and ‘lean customization’ more successful than next doors competitor, one shared ingredient is necessary: information dominance . Where achieving air dominance is crucial to decide a military conflict in your favor, will gaining information dominance be central in doing business in the years to come. It can be simple like soccer team AC Milan using a mathematical model to predict the chance players will get struck by an injury. Google uses self-learning algorithms to improve search results and present advertisements while the success of retailers Wal-Mart and Ahold is derived from knowing more of consumers and suppliers than their competitors. These organization have been able to get a grip on the massive data amounts and can predict to a high degree what an individual customer will buy next. Smart technology alone is however not enough as all relevant information was available on the terrorist who boarded the flight between Amsterdam and Detroit in ...

One of the effects of the recent economic meltdown is American and Western European consumers looking for cheaper products. Many are shaken and struggle to pay off existing loans, let alone feel comfortable to engage new ones. At the same time are billions of consumers in Asia, South America and in a lesser extent Africa, entering the middle class. But a middle class which can only afford cheap products. Companies react to these developments by producing cheaper products and services, like the one Lac (2,000 dollar) car from Tata. In the Harvard Business Review article ‘Innovation’s Holy Grail’, C.K. Prahalad and R.A. Mashelkar argue that this change in demand requires companies to think differently about innovation. Where traditional innovation is built on the assumption of abundance in capital, knowledge and other resources, will future innovation be driven by the need to build more products with fewer resources. According to the authors, companies should focus on ‘affordability ...

Getting outsourcing contracts to comply with Solvency II is not rocket science, but requires a certain amount of attention. Here are some practical guidelines. Where within banks the Basel II implementation projects come to an end, are insurers burning the midnight oil to get Solvency II implemented before the end of 2012. The Solvency II legislation is aimed at improving risk management practices within insurance companies and providing better protection for policyholders. For this purpose, the legislation demands: the insurer to hold enough capital to survive a period of economic hardship (pillar 1), adequate quality of internal controls and governance (Pillar 2) and greater transparency in communication with the regulator and market (Pillar 3). These three topics have been translated into clauses that must be complied with. If the insurer has not outsourced any IT or business processes, it is sufficient for the insurer to translate the legislation into internal ...