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Business Value Generation is the New Bottleneck

Business Value Generation is the New Bottleneck

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“Creating value is an inherently cooperative process, capturing value is inherently competitive.” -- Barry J. Nalebuff

I remember back in the day when prototyping solutions was the biggest bottleneck.   It could easily take many months to prototype a working solution that would address the key concerns in a viable way.

In fact, in one particularly painful example, I remember a team had spent more than six months on their prototype.  They were trying to find the right combination of authentication and authorization patterns to support a suite of line-of-business applications.  They got lost in all of the possible combinations and permutations, and they ended up going down a bunch of different rabbit holes. 

Worse, they ended up with a bunch of dead ends that would never work in the target environment.

This example really stuck out in my mind, because when this particular customer met with our little security SWAT team on the Microsoft patterns & practices team, we figured out a workable solution within 30 minutes, and had concrete plans for three specific prototypes just to play out the possibilities.

30 Minutes vs. Six Months is a Big Deal

Of course, we had several things on our side that helped us reduce six months down to 30 minutes:

  1. We had been looking across customer scenarios so we were familiar with all the various patterns
  2. We knew the technology stack, the viable options, the obvious limitations, the design intent, and in most cases, the actual source code
  3. We had an “algorithm” for designing authentication and authorization solutions

Here’s the algorithm we used for solving every authentication and authorization challenge:

  1. Identify resources
  2. Choose an authorization strategy
  3. Choose the identities used for resource access
  4. Consider identity flow
  5. Choose an authentication approach
  6. Decide how to flow identity

Obviously, there’s a lot of details behind each step, but the high-level sequence was the key to success.

The reason why this approach was so effective is that we worked backwards from the end in mind.  In many cases, solution architects and developers were so focused on the authentication piece, that they lost sight of the spectrum of resources they would need to access, and which identities would need to be authorized, etc.

A Proven Practice, a Shared Language, and Mental Models Really Speed Things Up

This authentication and authorization design process also worked really well because we had a shared language and mental models for each of the parts.  For example, when we identified resources, we looked at Web server resources, database resources, and network resources.   When we chose an authorization strategy, we evaluated role-based vs. resource-based (claims wasn’t on the scene at that time.)  When we chose identities, we evaluated the original caller’s identity, the process identity, service accounts, and custom identities.  When we evaluated different authentication approaches, we would use terms like the trusted subsystem model and the impersonation/delegation model.

My big insight at the time was how a little knowledge and a proven practice for designing authentication and authorization solutions could effectively “flatten” time.  In which case, now the bottleneck gets pushed around.  If it no longer took a team six months to prototype a solution, then what would be the next obvious big bottleneck?  If you’re into Theory of Constraints (TOC), you’ll especially appreciate this dilemma.

What’s the Next Big Bottleneck?

Let’s fast forward to today’s emerging landscape.   With today’s tools, people, and processes, prototyping no longer takes a six month epic journey. 

It’s no longer the big bottleneck.

In a world where we are moving towards “IT as a service”, what does become the next biggest bottleneck?

You could just say that it’s the absorption rate, or the adoption rate, or the consumption rate, and you’d be in good company.  In fact, a book that explains this bottleneck in detail is Consumption Economics: The New Rules of Tech.

But, there is another bottleneck.  

It’s one that I was exposed to thanks to a few incubation teams where we got to see what happens when a customer goes Cloud and re-imagines their business.   Suddenly, they have a lot more capability at their fingertips, as well as agility, and the ability to innovate.

Business Value Generation is the New Bottleneck

The new bottleneck is business value generation.

Precisely, it’s the challenge of finding, creating, capturing, and accelerating business value – which is the key to the future.

It’s like a switch is suddenly flipped, and it’s a race to figure out how to create new value.

I like how Charlie Bess describes this new landscape when writing about HP Discover 2013:

“The IT industry behavior is definitely changing. We’re moving from a focus on cost savings and RFP driven engagements between companies and suppliers into an environment that is more consumption-based. Where nearly anything in IT can be purchased “as-a-service”. This allows for a much more business-led approach, focused on business value generation, yet with a demand for a relatively short return on investment. This leads to many asking for advice on what they should do or just a level-set on what is actually happening and what others are doing.”

The Pace of Change Changes Everything

With the pace of change, the ability to innovate, and the ability to execute, the bottleneck really comes down to how to generate new business value (and, related, how to accelerate that business value.)

It’s a loop, too as value goes from productized to service-ized, to commoditized.

And, it’s a continuously changing game as value moves up the stack, where things that were once “above the line” are now “below the line.”

What’s Possible When it Comes to Business Value Generation?

Remember that example of six months vs. 30 minutes?   Amazing things are possible when you have proven practices, a shared language, and mental models.

I’ll share more on this in a future post, but for now, let me give just a brief example to hopefully illuminate what’s possible …

A colleague and I were brainstorming on potential scenarios on how social computing could change the Enterprise as we know it.   We knew we could use scenarios as a way to rapidly envision future capability visions, and then use storyboards to play out future possibilities.

When we were operating from a blank slate, we didn’t get very far.   In fact, it was pretty abstract, and not very effective.  

Then we switched gears.

We pulled up a topology map of business capabilities and started to heat map capabilities that we could light up with social computing scenarios.   Suddenly, we were on fire.   For example, externally, if you had more insights into your customer’s pains and needs from social computing, could you design more targeted offers?   Or, if you had better connection with your customers in the marketplace through social computing, could you better shape your customer loyalty and perception in the market?  Or, internally, through social computing capabilities, could you improve collaboration and more rapidly share tribal knowledge among your teams?

Behind the scenes, we used a rapid way of checking for potential business value, and quickly validating whether the scenario would be a meaningful and significant chunk of organizational change.

Long story short, we quickly walked away with tens of future scenarios for the Enterprise in under an hour.

What I learned from this exercise is three key things:

  1. Business value generation is the new bottleneck
  2. Many businesses will fail if they don’t master this (and this is growing opportunity for business transformation artists)
  3. Information technology is the key to the future, but only when it helps drive new business value

Your ability to generate new business value will be the key to making the most of big technology trends, including Cloud, Mobile, Social, and Big Data, and re-imagining your business in a digital economy, while crossing the chasm to the Cloud, in a globally connected, always-on, ultra-competitive, ever-changing world.

Innovation, instead of being the exception, is the new norm.

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