Database Reference
In-Depth Information
transactions being undertaken by a vertically integrated enterprise. Mass production or
offering-based enterprises are more amenable to
cooperative partnerships
that are oriented
toward long-term, steady-state, and continuous relationships. Typically, a customer will have
a limited number of cooperative partnerships because while it ensures the customer a con-
sistent and reliable supply of know-how and offerings, it also ensures a steady business for
the provider. However, customer-responsive enterprises, rather than limiting the number of
partners, lay more emphasis on developing a large network of providers (each having their
own special core competency) to increase the range of capabilities that they can access to
meet their customer's needs. Instead of emphasizing steady-state relationships, customer-
responsive enterprises focus more on obtaining a greater diversity of capabilities by enabling
ready access to a broader network of solution-delivering units (i.e., resources) that are avail-
able for assigning on as-needed basis at any instant, at a lower cost, seamlessly, and with
minimal friction.
Please also see Section 1.2.2.2.3 “Economics of Customer Responsiveness.”
1.2.2.1.5 Resource Interface Management
Interface management is not unlike channel management whose prime objective is to minimize
the number of interfaces and to continuously optimize the performance of the existing interfaces
in line with the business objectives and strategies of the enterprise. The more diverse are the final
customer needs, the broader is the network necessary to provide access to more core competen-
cies (i.e., capabilities); the greater is the variation in capacity needs, the greater is the depth of the
network required to ensure the capacity required for each core competency. For enterprises to be
flexible, they need access and the ability to integrate, assign, and coordinate the delivered solution
at a very low cost. Whereas efficient network interface management enables network members
to actually become additional solution-delivering units for the response-based enterprise just as
in-house delivery units do, inefficient interface management forces the enterprises to integrate
vertically, thus limiting its options for access solely to the capabilities (i.e., core competencies) of
its in-house delivery units.
With successful interface management, an enterprise has advantages
◾
Virtually, all enterprises can become part of the delivery network
◾
Thus, the enterprise has virtually unlimited capability and capacity at its disposal to serve
the needs of its customers
◾
Thus, the enterprise can focus on meeting the needs of the customer unfettered by the need
to find a revenue-generating use of the existing unused in-house capacity
1.2.2.1.6 Customer Service Management
As discussed in Section 1.2.1.1 “From Products to Services to Experiences,” 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. This allows the
enterprise to initiate and maintain a long-term relationship with the customer. By this reason,
platforms are often sold at cost, or even being given away free, in the expectation of selling even
more lucrative services to the customer over the lifetime of the product or, rather, more correctly,
the lifetime of the customer!
