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Download Chapter 9 of Living Networks on the Flow of Services

Every chapter of Living Networks is being released on this blog as a free download, together with commentary and updated perspectives since its original publication in 2002.

For the full Table of Contents and free chapter downloads see the Living Networks website or the Book Launch/ Preface to the Anniversary Edition.

Living Networks – Chapter 9: The Flow of Services
Reframing Digital and Professional Services

OVERVIEW: Digital connectivity and integration are dramatically shifting the role of services in the economy. Software is being provided as a service, business processes are readily outsourced, and the functions of the firm can be broken down into defined modules. Professional services now range across a spectrum of business models ranging from digital services to traditional face-to-face delivery. The same drivers are resulting in the rise of professional networks as viable competitors to established firms.

Chapter 9 of Living Networks – Commentary and updated perspectives

This chapter brings together two aspects of services in the connected economy: online software and professional services. The first of these has progressed rapidly, while the professional services market is earlier in its transformation.

The jargon in online software has changed over the last years. IT executives now refers to SOA (Service Oriented Architecture) rather than web services, while online delivery of software is usually called SaaS (Software as a Service) instead of the ASP (Application Service Provider) model. However the principles remain the same.

In the chapter I write about ‘The new modular world of business’ and its implications, a theme I’ve developed a lot further over the last years. One of the best ways of understanding how the global economy is shifting is the move to modular products and services. Business processes are being broken down into smaller and smaller elements and being recombined across organizational boundaries. The whole Web 2.0 world exemplifies this, and the rest of the economy is following suit.

Professional services has long been dealing with the impact of a connected world, with one of the primary issues a powerful drive to commoditization of many previously profitable services. However there are many effective responses, as I have described also in my Seven MegaTrends of Professional Services and Service Delivery Innovation white papers.

The chapter concludes by looking at professional networks. The trend to professionals working together in networks rather than formal organizations continues to be strong. My organizations Advanced Human Technologies and Future Exploration Network implement the principles described in the chapter on how to do this effectively.

ComScore has just released global Twitter usage figures for March, showing a 95% growth in the month to 19.1 million visitors. Using the same methodology as my At current growth rates everyone in the US will have a Twitter account by August 22 2009! blog post from last week (extrapolating current exponential growth rates)…

Everyone in the world will have a Twitter account by December 21 2009! (which will be a nice Christmas present for the Twitter founders)

US users currently comprise 48.6% of global visitors. It’s interesting that US growth is 131% compared to global growth at 95%. If these growth rates continue the US will again have the majority of global users, after having started as a mainly US application and then gained significant traction internationally. Undoubtedly by later this year global growth rates will pick up relative to the US (especially since everyone in the US will be on Twitter by August 22!)

For a recent boardroom presentation to a group of CEOs of large organizations I prepared ten ‘dos and donts’ on my topic of organizational change.

Enterprise 2.0 Implementation Framework

I drew on the core ideas in our Implementing Enterprise 2.0 report and framework (as above). Enterprise 2.0 is ultimately far more about organizational change than technology, though it happens to be driven by web technologies. As such much of my focus today is on how to change organizations, to literally create the next version of the enterprise. Far more details on how to put the ideas below into practice are in the Implementing Enterprise 2.0 report.

My list got an extremely positive response from the audience, so I thought I’d share it here.

DOS

1. Create a vision
The most important aspect of your vision is that it must be compelling. Unless people are drawn to it and want to help create it, it is useless. This means it needs to be focused on the benefits to everyone in the organization.

2. Set and communicate policies
Policies provide parameters in which people can freely play. Without guidelines staff will either be reluctant to try things for fear of going too far, or will do inappropriate things because they haven’t been told otherwise. Simple, clear policies are a powerful enabler of positive change.

3. Select and discover pilots
Pilots are the instrument of experimentation, of trying new things within safe boundaries. Choose what new things you want to try and how to go about it, so you find out what works and how to scale it across the organization. However the most valuable experiments are probably already happening, so you need to discover and nurture them.

4. Identify and support champions
Every organization that has rapidly and successfully changed has depended on champions that have provided a lead for others. In many cases they are informal champions, driving change through their enthusiasm and energy. Don’t manage them, but find them and support them.

5. Iterate!
We are living in what I call “The Heuristic Age,” in which everything is driven by trial and error. Grand plans will never succeed (as planned) in a complex world. The key driver of change must be trying things, learning from them about what does and doesn’t work in your unique organization, and trying again being a little bit wiser.

DON’TS

1. Ignore concerns
Everyone – from corporate directors through entry-level staff – will be worried about change. Do not ignore these concerns but address them. If they are unjustified, show why. If they are justified, assess real risks and rewards and act to swing the balance to the rewards.

2. Start with technologies
Many people are excited by the plethora of awesome technologies we now have available. It is a mistake to start with a technology and try to make it useful. That approach usually fails. Instead start with business issues and see what technologies can help them.

3. Create a master plan
While you need a vision, you shouldn’t create a fixed master plan of how you’ll get there. It’s a delicate balance, as you do need a roadmap of where you think you’re going. However the temptation can be to get too detailed and too prescriptive. Any plan must allow for development, learning, iteration, and change.

4. Let pilots run indefinitely
Pilots are a tool of finding what works. That means you need to clearly distinguish between what is working and what isn’t. If things aren’t working, either close them down or change them dramatically. It is easy to set up pilots. It is harder, but just as important, to close them down if they are not creating value.

5. Try to do everything
With so many opportunities for positive change in organizations, it is tempting to try to do it all, to truly transform the organization into a far more effective machine. The chances of success are minimal, and the risk is failure means everything stays at the status quo. Contain your ambitions and move by steps rather than leaps, at least initially.