Thursday, April 14, 2005

Straight-Through Processing 2

A couple of good posts on disintermediation ...
... prompt me to post an expansion on my previous post: Straight-Through Processing
(thanks to Stefan Tilkov for kind remarks)

Straight-through processing (STP) generally makes the following assumptions:
  • There is a collaboration between several service providers
  • The purpose of the collaboration is to expedite some customer transaction
  • The service providers have a common view of this transaction
  • The customer transaction belongs within some domain, in which all the service providers participate.
The concept of STP is especially popular in the financial sector.
But in my view, STP is a strategic error, because it invites disintermediation.

From this perspective, mediation and reintermediation can look pretty naive. For example, here's a blog posting by Luke (April 2005), who is planning to bundle and brand online services from UPS, USPS, FedEx, and DHL together in a single interface. What possible value-add is he offering? Er, federated identity? How is he going to create a serious brand? I wish him well, but he's got an uphill struggle ahead.

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