The Value Proposition: B2B Industry Facing Challenges
What is the essence of a "value proposition" within the domain of B2B engagements? How does an organization codify its value proposition to align with customer perception?
In the competitive landscape of the B2B industry, many organizations are redefining there business goals and objectives to better align with improving customer experience. In the rise of digital transformation, the significance behind understanding customer needs cannot be overstated. As the scope and scale of customer activity continuously shift, so do tides of the sociopolitical landscape that drive our global economy.
In the B2B world, the effects of digital transformation are on the front-line of a vendor-customer partnership. In order for successful value delivery, organizations must not only be very clear about their business goals and objectives, but align strategically with the proposed value contribution a vendor offers. The strategic alignment process is continuous, because as customer needs change B2B organizations must make strategic decisions on whether or not these changes are trade-offs, opportunities, or threats.
In the age of digital transformation, decisions have to be made with agility, causing many B2B organizations to take a significant hit on technical debt payoffs. If a sudden decision is made to expand geographically, organizations must find creative and effective ways of communication to penetrate new markets, and improve operational effectiveness to achieve economies of scale. If an organization decides to increase its product line, awareness on core competencies and leverage-able capabilities must be in place to attain economies of scope.
If we delve into the core of a B2B organization we will review its core motivation behind its value proposition. Beyond all its products and services, you will see its people, culture, and the qualities that drive value activities throughout the organization. These value activities will ultimately align with core values an organization embodies.
Core values are what drive motivations throughout the organization, and effective communication is critical in order for the culture to reflect these values in everyday activity. As activities unfold, organizations must continue to ensure people are doing the "right" thing so that everyone is contributing to the overall mission. This is especially critical in B2B organizations where their primary value activities such as providing cloud infrastructure management or procurement services are inextricably linked to the value delivered to their target customers. Strategic B2B organizations, use effective data management solutions to produce both qualitative and quantitative performance metrics that help monitor and control mission critical value activities.
When we examine the 3Ps of people, process, and product, success is achieved through the strategic alignment of the 3Vs which are core values, value activities and the value delivery. The problem many organizations face is maintaining visibility and trace-ability of alignment between core values, primary value activities, and value delivery. The digital transformation age is now forcing companies to be more cognizant of cost allocation in relation to their value proposition and the advantages they maintain in a highly competitive landscape in the digital economy. The ability to monitor and control procurement and IT spend is a critical component to ensuring investment capital and operating expenses are targeted towards customer value delivery improvements. When customer value delivery is improved, so is the B2B reference-ability further solidified between vendor and customer.
In order to stay above the fray, B2B organizations must continuously look inward to self assess core values, while aligning with suppliers for open innovation to improve upon customer experience, value perception, and economic value delivery. In addition, companies must have a continuous voice of customer stream that feeds qualitative insight into ever-changing customer needs. The remaining challenge is how to codify and establish real tangible and quantifiable metrics on discreet value activities that align core values with value delivery. Even Gottfried Wilhelm Leibniz's envisioned:
It is obvious that if we could find characters or signs suited for expressing all our thoughts as clearly and as exactly as arithmetic expresses numbers or geometry expresses lines, we could do in all matters insofar as they are subject to reasoning all that we can do in arithmetic and geometry. For all investigations which depend on reasoning would be carried out by transposing these characters and by a species of calculus.
Gottfried's statement suggests that complex thought processes can be further represented in the form of tangible and actionable data that can be further quantified and, under analysis, used to drive reasonable action. As the information age evolves, we see his vision unfold in real-time! With the loud voice of customers pressuring B2B organizations to improve upon data analytics, Gottfried's statement saliently points to the digital evolution.
Moreover, as digitization becomes more of a driver in customer needs, the value proposition of B2B organizations will need to be more measurable and quantifiable as it relates to customer experience and perceived value. To ward off evolutionary extinction, B2B organizations must sustain and maintain economic value for the organizations and communities the they serve.
About the author: Sidney Jones is a Value Systems Architect with a key focus on creating value for customers who are strategically focused on improving value delivery to their target customers. While leading a pipeline of initiatives, Sidney dedicates his time and effort on implementing value creation solutions that leverage modern technology, combined with proven process improvement methodologies that together increase business performance and economic value for organizations throughout the mid-west and abroad. Sidney's mission is to improve the value delivery system of the technology industry and reshape the competitive landscape of the digital economy.