Value creation technology Changing the focus to the group

Objective The sources of value What are the focused dimensions for releasing IT potential? Value Patterns

Value creation defined Anything that someone might consider useful, important, or desirable. Economic value: wealth, resources Physical value: well-being, comfort Emotional value: security, excitement Social value: effective relationships among people Cognitive value: knowledge, wisdom Political value: power, control, influence

Sources of Value (I) Novelty Complementarities Lock-inEfficiency Value

Sources of Value (II) Novelty New transaction structures New transactional content New participants, etc. ä Complementarities ä Between products and services for customers(vertical vs. horizontal) ä Between on-line and off-line assets ä Between technologies ä Between activities

Sources of Value (III) ä Lock-in ä Switching costs ä Loyalty programs ä Dominant design ä Trust ä Customization, etc. ä Positive Network externalities ä Direct ä indirect ä Efficiency ä Search costs ä Selection range ä Symmetric information ä Simplicity ä Speed ä Scale economies, etc.

Value creation efforts Methodology (reasoning process) Potential intellectual bandwidth with two complementary parts Degree of information assimilation (make sense of something) Degree of collaboration (a suitable pattern of attention dynamics)

The information focus Data infrastructure (IT capacity) Find — store — retrieve — transform — display Communication infrastructure (collaborative activities) Talk — send — gesture — show — share Knowing is not the same as doing. Doing is not the same as sense making.

Sense making process From tacit to tacit (socialization/mentorship) From tacit to explicit (externalization/publication) From explicit to explicit (combination/communication) From explicit to tacit (internalization/assimilation)

Attention dynamics focus Forms of organization in teamwork Collective effort: as the sprinters Coordinated effort: as the relay Concerted effort: as the crew Patterns of attention dynamics (diverge — converge) — (organize — deconstruct) — understand — (elaborate — abstract) — (analyze — synthesize) — (consensus — agree) Some facilitated managerial mechanisms are needed.

Schematic of Thompson ’ s technology classification Sequential interdependence for long-linked technology Pooled interdependence for mediating technology Reciprocal interdependence for intensive technology Input Output InputOutput InputOutput

Coordination patterns for different technological interdependence Reciprocal dependence — mutual adjustment Value resulted from intensive interactions, e.g., R&D Cross-function teams, face-to-face, unscheduled meeting, full-time integrators, standardized recruiting, required professionals Sequential dependence — planning Value resulted from standardized outputs and seamless combinations of which, e.g., manufacturing Scheduled meeting, task force, vertical communication by supervisors Pooled dependence — standardization Value resulted from training, standardized skill & process, and resource sharing, e.g., sales & marketing Rules, plans, procedures, interfaces interdependence Low High

The potential intellectual bandwidth Information assimilation × attention collaboration collaboration Info assimilation potential intellectual bandwidth Individual CollectiveCoordinatedConcerted Manual search Database query Automated sense making

Methodology Ontology (Perspective 、 Standpoint 、 Focus) Epistemology (assumption 、 argument 、 hypothesis, model) Method (operation/analysis skills)

Work methodology focus A repeated work process, an accepted working norm, a ubiquitous processing paradigm Reason Understand the problem — develop alternatives — evaluate alternatives — choose alternatives — plan for action Act Execute — coordinate — track — adjust — control Anything existed should be allowed for challenges. Core competences may be turned into core rigidities. Keep the expertise personnel flow in some degree.

Implications IT metrics must be value based (contributed to information or collaboration) IT/IS development will evolve into organizational structuring (communication channel/interaction mode) All technology will be collaborative Shift to sense making (not only symptom alerting but also value oriented innovation) Moving to mass configuration rather than mass customization (the dynamics of relationship could be redefined)

Extending readings Stabell, C.B. and O.D. Fjeldstad (1998), “ Configuring Value for Competitive Advantage: On Chains, Shops, and Networks, ” Strategic Management Journal, Vol. 19, pp Nonaka, Ikujiro and Hirataka Takeuchi (1995), “ Theory of Organizational Knowledge Creation, ” in The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation, Oxford University Press, New York.