The power to connect
Stephen Munden
Business Keys Ltd.
Energistics Standards Summit
23 October 2008
“The landscape is complex; there are many paths to innovation.
Business requires greater clarity and a more connected approach”
UK Technology Strategy Board Strategic Plan 2008 - 2011
“It is the function of the creative man to perceive and connect
the seemingly unconnected”
William Plomer, 1903 – 1973 English Writer
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agenda
Introduction
Standards
• paradigm
• power
Standardization
• innovation
• impact
Strategy
• leadership
• value
• process
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Business Keys Limited
unlocking business value…
Survival
Growth
LEADERSHIP
ZONE
Master complexity
Create your future
…helping organisations create a confident future
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results
strategy
– roadmaps providing clarity of direction
for business & technologies
management systems – a framework that ensures consistent delivery
of excellent customer results
solutions -
• compliance – getting done what must be done
• cost reduction – higher productivity, lower operating costs
• growth – access to new markets and opportunities
• innovation – agility and flexibility with lower risks
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driving forces
Business is driven by
• governments
• dynamic markets
• standards
New Strategies:
• knowledge as a strategic focus for business
• open innovation and collaboration accepted as key to prosperity
• network effects, network economy
everything/ everybody connected
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disruptive events
Missed opportunities?
• Kodak – ‘pictures by phone’
• OilCo – Enhanced Oil Recovery through 3-D fluid injection*
Disruptive technologies
• Kodak – digital photography
• OilCo – hydrogen, bio, other?
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* US patent 6,158.517
Standards I
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an agreed way to do something
Munden’s Law
standards are what they do
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what are ‘business keys’?
Commercially-sensitive strategic levers within a value chain/ network
standards - act as business keys to unlock business value
Types include:
• Access
• Change
• Communication
• Differentiation
• Identification
• Leverage
• Solution
• Strategic
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Standards connect your business to its customers
all successful, sustainable organisations
are underpinned by a matrix of
standards and business systems
that coordinate its activities and
connect it to its markets and customers.
A framework by which an individual company or industry can
develop technology and do business in any market in the world
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the power of standards
COMPONENT
KNOWLEDGE – competencies, capabilities, assets
BUSINESS VALUE
RELATIONSHIPS
BRAND – market position & focus
CUSTOMER VALUE
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PERFORMANCE
OPERATIONS – systems/process
ORGANIZATIONAL VALUE
the power to connect
NETWORKS
INTEROPERABILITY
MODULES
PLATFORMS
….all types of components
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component, product
…or something else?
Component: contributing to the composition of the whole
VALUE NETWORK or Business ecosystem
Innovator
Technology
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Component
Integrator
Users
Systems
Adoption
Component
Complements
Component rival
Complement
provider
Source: Joel West
mastering complexity
Underlying complexity is a small set of simple rules – e.g. modularity
• Product – set of components linked together to form a function for a user
• Module – component of a system
• Interface – standard that defines how modules will interact with each other
• System – set of interrelated components
• Architecture – set of interfaces (standards) that make up a system
Control of the standards defining the architecture
…….provides competitive advantage
The architecture lays down the rules for a new industry
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Standardization I
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a dynamic process for getting
more people to value what you offer
innovation with standardization
Source: G M Peter Swann, 2000
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standards impact
Key Industry Drivers
Standards Impact
Energy source depletion - reserves
Leading edge technology integration
Production optimisation
Agility and flexibility
Operational efficiency
Cost reduction, waste reduction
Safety assurance
Measurement/ assurance to staff/ stakeholders
Legal & regulatory compliance
‘License to trade’
Key Business Drivers
Volatile energy prices
Increased yield/ new yields - market stability
Security of supply
Increased self-sufficiency
Regulations driven by climate change/ public policy
Business-friendly regulation, easier implementation
EOR technologies
Standardize patented technologies
New energy technologies
Facilitate market penetration of alternatives
Demand & sourcing from developing countries
Transaction cost reduction
Rising energy demands
Implementation of climate change measures
Industry process issues – bottlenecks in supply
Process improvements
Formation of the ‘rules of the game’ by others, e.g.
China
Standards creating the framework for global
business
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Strategy I
Good leaders are the ones who set acceptable
standards that can be emulated by others
Mahatma Gandhi
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leadership
= sets the standards for the company
• brand
• systems/ structure
• functions/operations
– all working in complementary fashion
to achieve the specific aim of the organisation
Company
objectives
Strategic
business
planning
Technology
planning
Product
planning
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unlocking business value
Customers
Markets
Compete on – service
‘Customer Intimacy’
Brand standards
Knowledge/ Capabilities
Compete on – quality
‘Product Leadership’
Technology/ Product standards
Cash
Where is the
value in your
business?
STRATEGY
• Industry assumptions
• Strategic focus
• Customers
• Assets & capabilities
• Product/ service offerings
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$
Process standards
Compete on – price
‘Operational Excellence’
Operations
Source: Business Keys Limited©
strategic standardization
Use of standardized products, processes, procedures & policies
to gain competitive advantage, or avoid competitive disadvantage,
thereby facilitating the attainment of business objectives
Level
Role
Standardization
responsibility
Frame of
reference
Examples
Strategic
Director/ leader
Set standards
Roadmap
Business Plan,
Brand standards
Management
Manager/
supervisor
Manage
performance
Framework
Systems,
architecture,
processes
Operations
Staff/
functional
Follow/ comply
Tactical plan
Technical
Specification
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strategy development process
External Stakeholders
BUSINESS BOUNDARIES
- Vision, Mission, Values
BUSINESS OBJECTIVES
(or Goals)
INTERNAL ANALYSIS
Strengths &
Weaknesses
EXTERNAL ANALYSIS
ALTERNATIVE STRATEGIC
DIRECTIONS
EVALUATE & SELECT
STRATEGY
IMPLEMENT
MONITOR & CONTROL
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Opportunities
& Threats
standardization strategy
- regenerative medicine example
• Regulatory framework
• Collaborative strategy
• Stability/ certainty
• Fragmented/ embryonic markets
• Investor confidence
• Public perception/ media coverage
• Unproven science/ technology
• Uncertain future markets/ business risks
• Process and production methods
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Technology Leadership Process
Opportunities
Activity
Products
Opportunity
&
Value
Mapping
Technology
Vision
Business
Impact
Technology
Roadmap
Strategy
Development
Standardization
Strategy
Strategic
Choice
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Standards
Architecture
•Information
•Implementation
•Influence
•Innovation
standards management
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Influence
market structures
technology direction
product acceptance
Information
business intelligence
technology tracking
best practice/ next practice
Implementation
compliance/ assurance
cost/ risk reduction
market interconnectivity
Innovation
 faster product introduction
new competitive space
new industry boundaries
Questions?
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