Wednesday, March 25, 2009

Straight-Through Processing 3

Where have all the agents gone? asks Seth Godin. He is talking about travel agents, stock brokers, real estate, and so on.

"The problem with being a helpful, efficient but largely anonymous middleman is pretty obvious. Someone can come along who is cheaper, faster and more efficient. And that someone might be the customer aided by a computer."

Straight-through processing - sometimes seen as one of the potential sources of value from service-oriented architecture - is a mixed blessing, as I've pointed out before. There is always a danger of disintermediation, especially if the added value provided by the middleman appears trivial or easy to replicate. As Seth Godin points out, if you are just providing an anonymous human approximation of Google, don't bother - Google does it better.

In some industries, the middleman had become lazy - taking a cut for not doing very much. My local travel agent never gave me any useful information or advice, merely handed out brochures from the travel companies and struggled with the complexities of the booking system; so I stopped using them. And in the financial markets there are still companies that think they deserve a percentage of your pension fund in return for pressing a few buttons now and again.

In the past companies like these have often been able to take advantage of a strategic position in some larger process, extracting "rent" but without creating value. And there are doubtless still many niches in the system ecosystem that can be exploited in this way.

However, service ecosystem niches that allow companies to draw rent without creating value are going to be short-lived, and rightly so. In hard times, the percentage should only go to companies that are providing genuine value. (Actually the same principle applies all the time, but people are more motivated to follow this principle now than they have ever been before.) And ecosystem SOA should help us to make sure of this.

Then business strategy in a dynamic service ecosystem should not be based on finding and maintaining positional advantage, but on creating and maintaining genuinely productive relationships.

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1 comment:

Ian Macdonald said...

I suppose that any enthusiastic user of the web becomes his own ecosystem and leaves agents to shrivel and die in the undergrowth - and pretty much cuts SOA out of the picture too (I don't think a lot about my personal architecture).
I suspect that those looking for strategic market opportunities that might enable them to act as intermediaries would do well to look for the presence of the traditional FUD factor. Wherever there is fear, uncertainty and doubt then there are potential customers cowering in a corner somewhere.
Despite my web confidence it works like that for me when it comes to managing pension fund investments. A key part of that is the presence of too much choice and the certainty that most of the choices are poor. An enthusiastic and knowledgeable middleman dampens down the trauma in dealing with that level of complexity.
Time is another key element. Doing it yourself, either personally or as a business, demands time and requires you to become adequately knowledgeable about the topic. When this is outside your core business or interest then again there is an opportunity for an intermediary. Hell, if people can earn a living as 'personal shoppers' there must still be unexplored business to be done in the interstices of the digital universe.
Perhaps the CBDI Forum can establish a Dragon's Den" to assess ideas?