The business unit

A business unit is simply a bundle of assets meant to create value for customers in the form of goods and services (Figure 3.9). Customer s pay for the value they receive, which ensures that the business unit maintains an adequate return on assets. The relationship is good as long as the customer receives value and the business unit recovers costs and receives some form of compensation or profit.

Figure 3.9 Business units are coordinated goal-driven collections of assets

The business unit’s capabilities coordinate, control, and deploy its resource s to create value. Value is always defined in the context of customers. Some services simply increase the resources available to the customer. For example, a storage service may assure that a customer’s business system s can achieve a particular level of throughput in transaction processing with the availability of adequate, error -free and secure storage of transaction data. The storage service simply increases the capacity of the system, although one might argue that it actually enables the capability of high-volume transaction processing. Other services increase the performance of customer’s management, organization, people and processes. For example, a news-feed service provides real-time market data to be used by traders to make better and quicker decisions on trades.

The relationship with customers becomes strong when there is a balance between value created and returns generated. The catalogue of goods and services amplifies the effect and strengthens the capabilities and resources of the business unit. Better returns or cost recovery allow for greater investments in capabilities and resources. The resources and capabilities complement each other.

The business unit could be part of an organization in the public or private sectors. Instead of revenue from sales there could be revenue from taxes collected. Instead of profits there could be surpluses. The customers of the business unit could be internal or external to the organization.

Understanding the customer’s business

Back at the office

Pick a customer and carefully analyse their business to understand the ecosystem in which they operate. What conditions make the customer’s business grow? How do your services create or sustain such conditions? What challenges and opportunities does their business face? How do your services help your customer address them?

Suggestion: Visualize the ecosystem diagram with the various boxes and connectors that constitute the closed-loop system for creating and sustaining value.

Дата добавления: 2015-11-14