Hi -



Thought this may interest you. Carol Rozwell is a value network exponent and
active in the value network community and clusters.



A very cost-efficient way to introduce and immerse yourself in value
networks and social network analysis is to join the SoCal Cluster 22 Feb at
LAX. See:



http://kmblogs.com/public/item/158651



In the ascension of value networks this event marks a turning point and
highlights deeply practical nature and proven advantages of value networks
and value network analysis. You will interact with value network enterprise
customers like Cisco Systems. Hear from Verna Allee how major institutions
and firms like Boeing and the European Commission are adopting value
networks broadly. You will also see a preview of GenIsis: The Value Network
Browser. Learn how complex environments like NASA use social network
analysis to discover and optimize organizational knowledge pathways.



http://www.vncluster.com/LAX.htm







Cordially,



-j



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January/February 2007






Daily Updates


Traditional networks are integral to management



Value networking is a method for examining the relationships among a group
of related organizations or individuals to understand and categorize the
value each gains from the relationship, according to Gartner vice president
and distinguished analyst Carol Rozwell.





By Bert Latamore
Computerworld (US online)
Updated: Feb 13, 2007 12:14 AM

Value networking, says Gartner vice president and distinguished analyst
Carol Rozwell, is a method for examining the relationships among a group of
related organizations or individuals to understand and categorize the value
each gains from the relationship.



While this is not an exact measurement system, it has implications that
range from the business management level (Does the enterprise have the right
business partners to succeed, and if not what is missing?) down through the
project level (What partnerships with which entities or individuals will
best ensure the project's success?) to network infrastructure design, since
the network provides the infrastructure that makes those relationships
possible.



"I first encountered the value relationship concepts in 1998-'99, when
e-commerce was the rage," Rozwell says. "At that time, many brick-and-mortar
entities were concerned that new Internet-based competitors would disrupt
their businesses. Value network mapping was an attempt to identify all their
complex sets of relationships and identify the economic value drivers of the
network.



Concept is catching on

"As the awareness of the importance of partnerships has increased, the value
network concept has seen a gradual uptake," she says. "It is being used by
companies that are receptive to techniques that seem a little squishy at
first."



She has charted the life sciences value network, mapping pharmaceutical and
biotech companies to other entities such as contract manufacturers and
hospitals. In the process, she coded each organization according to its main
business strength known as its value discipline:



- Operational excellence,

- Customer intimacy,

- Product leadership, or

- Brand mastery (a category added to the list by Gartner.)



"For instance, if you are a traditional pharmaceutical manufacturer, your
major corporate focus most likely will be product leadership," she says. "So
in your value network, you want partners with complementary value
disciplines such as customer intimacy and branding." These might include
Internet services such as WebMD or blogs as well as contract sales and
marketing organizations. So at a corporate management level, value
networking helps companies plan better business strategy and select the best
partners to maximize success.



The value network map can be used to examine existing relationships to see
whether the enterprise is allied to business partners that have
complementary rather than competitive strengths and to identify potential
new partners with complementary strengths. "So instead of starting with a
blank sheet of paper, you have a methodology for understanding the tangible
and intangible assets that flow from organization to organization."



By putting the customer, rather than the modeler's enterprise, at the center
of the network, management can examine the value of each relationship and
entity in the network to the customer. This can lead to valuable insights
into customer needs and reactions that can result in improved business
strategies. Most companies have a problem seeing beyond their own products
and marketing. This exercise can help management understand what the
customer wants and how the customer sees the enterprise and its products.
For instance, it can help a pharmaceutical company see how it contributes to
the care patients receive and how it can improve that care. It can help
management identify gaps and redundancies and develop an approach that helps
rather than confusing the customer.



On the project level, an academic research organization may discover a new
molecule and may partner with a pharmaceutical company to bring a new
product to market. The pharmaceutical will further research the compound and
take it through the clinical study process, which demands excellence in
complex operations.



Once the FDA approves the drug, the pharmaceutical company may partner with
a contract manufacturer to make it in large quantities and with a sales and
marketing specialist to furnish doctors with the information they need to
prescribe it to patients. The pharmaceutical company may also want help in
establishing a strong brand presence for the new drug against existing
competition. The value network analysis helps the pharmaceutical company
understand which potential partners have the right qualities to provide the
best chance of success at each stage in the product development life-cycle.



Network design

One approach to measuring the value of each relationship in a network is to
quantify the number and kinds of interactions among the members of the
network. This can be refined by identifying the characteristics and value of
each interaction. This has implications at multiple levels of the
organization, including network design, security and access. Obviously the
network needs to be designed to support expected data flows, and routine
interactions need to be automated so that business partners have access to
the internal staff members and data they need while restricting their access
to only that data.



When deciding where to support the interactions with technology, the network
designers might want to give higher priority to interactions that have a
higher value and occur frequently. And, Rozwell says, not all interactions
should be automated with technology. "It may make more sense to handle
occasional or low frequency interactions manually, as one-offs," she says.



This does not mean these occasional interactions are low value. For
instance, the CFO of an important client may only need to exchange data with
the enterprise CFO a few times a year, but those exchanges may be critical
to the business relationship. The value network can help network staff
identify and prepare for potential important -- but low frequency --
interactions so that they do not create ultimately embarrassing emergencies
when they occur.



In contrast to the old concept of the supply chain, which Rozwell dislikes
because of its implied linear rigidity, the value network shows a more
complicated set of two-way relationships. "Life and business don't work as a
series of sequential handoffs from A to B to C," she says. Rather, multiple
participants interact simultaneously in complex ways. "Back in 2003 I was
working with a bio-pharma. I put up the value network picture and they
gasped at the complexity --- nearly 20 different entities. They had never
really examined their company' relationships with all the other players, so
they found the value network map to be very enlightening."



Mapping these relationships among multiple individuals or entities as value
networks provides a much more realistic view for understanding complex
interrelationships that can lead to insights that can change the business
and improve its chance to prosper in a complicated, fast-evolving
environment.



For more information on value networks, Rozwell suggests the entry for
"value network" in Wikipedia and the writings of Verna Allee on the subject.
And, of course, Rozwell can be reached through Gartner.



Bert Latamore is a journalist with 10 years' experience in daily newspapers
and 25 in the computer industry. He has written for several computer
industry and consumer publications. He lives in Linden, Va., with his wife,
two parrots and a cat.



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