Demystifying the term ‘Maturity’ – [level 2] System-driven

At level 2, system-driven, the technology is under control. It’s either the result of internal production, or – when outsourced – it is delivered by specialized companies that act at level 1 of the Value Maturity Model. The provider can make coherent systems available. The provider is reasonably in control of its own activities, but the routines are focused on the systems, not on the customer. A (central) hotline handles the failures. By using an automated administration system, the provider has insight into the status, repair and response times, or any other performance characteristic related to these systems. In development and maintenance, the organization focuses on efficiency by using standardized, documented, and preferably automated routines. The quality of these routine gets more and more attention as it serves the efficiency of the provider, and therefore it relates to the organization’s profitability.

They sell systems

The stuff they sell can be seen as a system: a functioning whole of several components, providing an emerging functionality that can deliver benefits to the user. Think of a computer system (laptop, desktop, server), a telephony system (smartphone), a car, a dishwasher, a sprinkler installation.

The provider has a fair idea of how this system is used, so they can optimize the functioning of the system for that specific goal. However, they have no relationship to what the customer really does with the system: a refrigerator can be used in a household but also as a facility to store goods the user sells to their own customers. It can be used to store vegetables, but also for liquor or any other product that requires cooling. Whether the customer makes money in the use of the refrigerator or applies it internally: the provider doesn’t have a clue.

There is no formal relationship with the customer’s business.

Example. Dell and Apple are known as very capable providers of computing and telephony systems. In a Capability Maturity Model, these providers would probably score a 5. In the Value Maturity Model, they don’t score more than a 2.

The strategy

These providers tend to follow an Operational Excellence strategy, just like the providers at level 1: they aim at delivering the very best product, at the very best price, in the shortest possible delivery times, etc.

Just like with the technology-driven provider of level 1, there’s nothing wrong with providers at level 2. We also need them. Without these providers, we can’t build services and we can’t create value by delivering the right services that suit the customer’s business - maybe even taking responsibility for their business results.

But they simply don’t have an explicit relationship with your business results, and, therefore, they are at the lower regions of the Value Maturity Model.

Providers at this level 2 can make a lot of money – for themselves: that is their prime interest. But they have no direct relationship with the business of their customers. So, if they claim to be ‘customer-driven’, the best thing they can claim is that they are ‘customer-friendly’ – which is a very different piece of cake.

At level 2, they will not earn a seat at the table of the Board of the customer.

?Agreements

Just like the providers of level 1, the agreements of these providers are loaded with technological specifications. They specify the functionality of their systems in terms of what it can do, the functioning of the systems in terms of how well it performs that functionality. This typically reflects the knowledge and the interest of the provider. Again, a clear symptom of an internal focus, where we find so many of the traditional, technology-focused SLAs, applied to the lower levels of maturity.

Running example: WhiteBox Unlimited

The household trading company of level 1 has now either mastered the level of technology-driven maturity, or it has outsourced this. WhiteBox Unlimited now focuses at the systems that are built with that technology: they sell the coffee machine and they probably also offer the water filters, they sell the washing machine and probably also the water pump if it breaks down, they sell the dishwasher but probably also the tablets you need for it,?they sell the air conditioner but probably also the hoses if they need to be replaced, they sell the central heating system and probably also the pipes you need to install it.

They advertise with the best functionality, the best functioning, the best price, and the shortest delivery times, and shipped for free! They offer brands of reputed companies like Bosch, Electrolux and GE, but they also offer their own brand as an economic alternative. But they still only offer the systems themselves – not the guaranteed service it can deliver. That would turn them into a level 3 provider.

In next week’s post , I’ll discuss the providers at level 3: Service-driven.

Links to: the opening post: the model , and [level 1] the technology driven level .