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intangible value. In a service economy, it is the time that is being commoditized, not prices or
places or things—this also leads to a transition from P&L to market cap as the base metric of
success (see Chapter 15, Section 15.4.1 “Time Value of Customers and Shareholder Value”); what
the customer is really purchasing is the
access for use
rather than
ownership
of a material good.
Since the 1990s, goods are becoming more information intensive and interactive, are continually
upgraded, and are essentially evolving into services. Products are rapidly being equated as cost
of doing business rather than as sales items; they are becoming more in the nature of
containers
or
platforms
for all sorts of upgrades and value-added services (see Section 1.2.2.1.6 “Customer
Service Management”). Giving away products is increasingly being used as a marketing strategy
to capture the attention of the potential customers. But with the advent of electronic commerce,
feedback, and workflow mechanisms, services are being further transformed into multifaceted
relationships between the service providers and customers, and technology is becoming more of a
medium of relationships. In the
servicized
economy, defined by shortened product life cycles and
an ever-expanding flow of competitive goods and services, it is the customer's attention rather than
the resources that is becoming scarce.
The true significance of a customer's attention can be understood the moment one
realizes that time is often used as a proxy for attention. Like time, attention is limited
and cannot be inventoried or reused. In the current economy, attention is the real
currency of business, and, to be successful, enterprises must be adept in getting sig-
nificant and sustained mindshare or attention of their prospects or customers. As with any
other scarce and valuable resource, markets for attention exist both within and outside the
enterprise. For extracting optimum value, the real-time and intelligent enterprises must
impart optimal attention to the wealth of operational and management information avail-
able within the enterprise. This fact alone should automatically put a bar on overzealous re-
engineering and downsizing efforts (although re-engineering and other cost-cutting tactics
are necessary, it is essential to ascertain if undertaking such tactics will contribute to the
delivery of superior or at least
on par
value to the customers). This is the fundamental vision
underlying the emergence of outsourcing strategies (see Section 1.3.7 “The Virtual
Enterprise”, Chapter 2, Section 2.5 “Electronic CRM”, Chapter 14, Section 14.7 “Appli-
cations Outsourcing”, and Chapter 4, Section 4.5.1.2.2, “Applications as Web Services”).
One major result of this trend toward the importance of experience has been the blurring of
lines between the content (the message) and container (the medium) in the market, which we
describe in the next section (see Figure 1.5).
1.2.1.2 Convergence: From Marketplaces to Market Spaces
Traditional capitalism considered market share as the prime determinant of profits. Market share
was a classic example of the zero sum game, where increase of market share by one company was
typically at the expense of corresponding loss by other(s). Market share, which is a lagging indica-
tor, does not distinguish in favor of valuable, satisfied, or repeat customers. On the other hand,
market spaces are defined with reference to a customer's perception of the delivered value, and the
resulting market size may be essentially limitless. Market spaces typically emerge because of the
convergence across disparate or differing industries. For instance, the convergence of computers,
