The Trust Channel

Title

The Postal Service can continue to evolve and operate more like a private-sector business.” ~ Megan J. Brennan, New Postmaster’s Goal: Act Like Private Sector, WSJ.com

Trust – Postal Service’s Greatest Asset

For centuries postal services in every country across the globe have aimed to serve the people by being the trusted guardians of the written word. From innocent sentiments of a child for Santa in North Pole to private, legally binding documents of multi-billion dollar conglomerates, the Postal Service has dutifully transported and delivered messages.

Although times have changed, our need for a trusted channel to communicate has not.

In fact, the need for Trust Channel has only multiplied as new technological methods of communications like Twitter, Gmail, Facebook and even LinkedIn have come into existence. These multi-billion dollar giants of communications are trusted by people from all walks of life, each one attempting to demonstrate their worth, originality, ideas, thoughts and, on occasion, dissatisfaction… all things that make us human.

These channels play on our fundamental need “To Belong” within a virtual world that attempts to expound voices of billions of people. Nothing wrong with this at all except when more than one person speaks at the same time, it becomes extremely noisy in real-time digital communication.

Inter-human communications, as we all know, is far more complex than the latest trending topic on many social media networks.

Now more than ever, there is a fundamental need to be ‘heard’ …not by the mass of invisible crowds but by the few you would like to address, privately without third party monitoring of your communications for monetary gains.

And the only entity that can still fulfill this need for private and trusted communications between people and businesses is the Postal Service.

Conflict – To make Money or Serve the People

Neither the need for a trusted, private communication channel; nor the benefits of advanced technological communications can be fundamentally denied. They are both equally important to modern communications.

Yet these two concepts remain mortal enemies in today’s digital world.

Why?

One problem is ‘Data’. Data, it seems, is the source of golden nuggets that must be mined for intelligence to make money. And, there is nothing wrong with this at all. Twitter, Gmail, Hotmail, Facebook, LinkedIn and many other communication entities attempt to gather data, buy and sell data, mine data, add to data, statistically manipulate data, react to data or otherwise use it to make money. Without data, social media networks would not be worth billions.

So what can reconcile the delicate balance between the need for private, trusted communications between people and the need to use technological communications to make/save money?

Only an entity that does not have a required obligation of pleasing its investors and at the same time serve the fundamental need for private and trusted communications between citizens can fulfill this need.

This balance can only be achieved if an entity is mandated to serve the people first and the market needs second while sustaining the strength of people’s trust.

Can the answer to this paradox still be Postal Services?

Opportunity – Industries that Serve People

Need for private and trusted communications that is not intervened by third party monitoring is paramount in today’s technologically advanced world. Electronic communications is no longer private in any form. The only security measures holding back intervention in individual communications is the sheer volume of data available and, of course, whether the information gleaned from the data is really worth any money. Sometimes the effort is worth it but in most cases finding the golden nugget has been extremely costly.

But this is no guarantee of privacy or trust in electronic communications. It seems to be more luck of the draw than secure, trusted communication channel.

So where in the marketplace is private and trusted channel of communication still required:

Financial Services

Banks and its customers (business and consumers) require a means to communicate highly private and secure information on a daily basis in real-time. From discussion about which account number to use to what amount of money needs to be transacted to which billing account number to debit…are all highly sensitive information that require private, trusted and secure communication channel.

Medical Services

Individual medical records are private and should be private between physician and the patient. Only a secure and private communication channel can ensure that this remain such.

Legal Services

Legal records are also private unless they are legally required to be disclosed. Once again a need for private exchange of information is necessary to ensure that trust is reinforced between the legal system and the people.

Identity Services

The records of your existence are private and trust-bound. These records should remain yours and any communications associated with these records should remain within the control of the holder of identity—you.

For the longest time Postal Services have handled these documents and records within the security of its Trusted Channel. And the practice still continues worldwide.

Evolution – Innovation in Trust

Imagine the Evolution of The Trust Channel.

What if it was no longer necessary to worry about privacy and security when instructing your financial advisor about your decision on financial management through a secure email?

What if you could view your medical records online with absolute knowledge that no one but you and your doctor knows your medical conditions? What if you know which doctor has access to your records and you own the ability to block them if you don’t trust them or their judgment?

What if you and your lawyer can discuss your pending legal matter without worrying about privacy?

What if you and your government have a private and trusted channel to communicate about your passport renewal?

What if….

Fact is that there is absolutely no other entity out there today that can own and manage The Trust Channel other than an evolved Postal Service without compromising itself on the alter of privacy invasion for the purpose of making money. Only a service with a clear mandate to first serve the people and not the money can do this job.

Even if a new innovative, entrepreneurial company builds a super secure and private communications technology to be used for Trust Communications, it will eventually become part of a private enterprise that wants to make money from your private information. Case in point, PasswordBox being acquired by Intel’s Safe Identity Organization. PasswordBox was a great company with approximately 14 million downloads and as Intel evolves the technology to integrate it into its own solutions, it would be interesting to see how data is used.

Actions – Re-Modelling the Business of Postal Services

Postal Services are no strangers to innovation and risk-taking as they have been addressing the issue of shipping and delivery for centuries. Well before Amazon’s drone delivery services, Postal Service was experimenting with human-powered drone services. Here is a picture of Autogyro from 1930s piloted by John Miller demonstrating shuttle mail delivery to Washington D.C.

Autogyro

Source: Library of Congress

Perhaps, it is time to rejuvenate the spirit of innovation once more and re-consider how Postal Service business model should serve the people and businesses. The opportunity does not solely include mail delivery and parcels, it spans into meeting the need for trusted, private and secure communications for foundational businesses and people across the globe.

As USPS has already demonstrated, Postal Services should partner with the private sector, enable new communication technologies, address the problems of modern retailers, and rebuild the foundation of The Trust Channel once again.

Private sector technology and government entities should not be enemies.

We are not enemies, but friends. We must not be enemies. Though passion may have strained, it must not break bonds of affection. The mystic chords of memory will swell when again touched, as surely they will be, by the better angels of our nature.
~ Abraham Lincoln

There is no perfect business model or solution for modernization of Postal Services but it is worth searching for one to keep the trust of the people.

The answer may be found in balancing two extreme principles that at first seem to be mortal enemies in digital world:

making profits vs. serving the people.

End

 

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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by applying strategy to tech solutions, building plans that create value and sharing knowledge that drives innovation.

openwrxconsulting.com

 

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Innovation vs. Automation: Digital Business Model

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It’s not enough to make a difference on product quality or delivery readiness or production scale. It’s important to innovate in areas where our competition does not act. ~ CEO, IBM Global CEO Report

Innovation in Business Models

Innovation in business model drives the creation of new markets and/or increases existing ones. Companies like Apple, Gillette and Priceline have expanded their markets by changing their business models to include new markets, selling products in pieces or creating new opportunity through closer relationships with their suppliers.

The truth of the matter is that there is no one single formula that can be used to innovate a digital business model.

In fact, there is no single definition or framework in existence today that can guarantee executives a path to success when it comes to business models. Even the definition of business model itself is disputed by academics and managers.

Regardless of this ambiguity, managers know that innovating business model delivers gains that are unprecedented. And they also know that technology has made it possible to deliver results faster and with far less investment than was previously possible.

Apple Xpansion

Source: Creating Value Business Model Innovation, MIT

Stop Thinking Automation

Many businesses are spending significant amount of dollars to transform physical components of their businesses to digital ones. As they digitize, they are simply taking products or services they already have and automating them for digital channels like mobile, web and phone. Unfortunately, status quo product and service automation will not be enough to drive a meaningful change in their business for the long term. And here is why:

  • Automation is easily replicated by competitors and works to decrease switching costs for customers.
  • Automation creates another layer of complexity on top of existing systems rather than attempts to build a new core digital business that creates new markets.
  • More technological complexity in the infrastructure means higher security risk over time. As technology advances so do the threats and vulnerabilities for the old technology that still remain the foundation of an automated digital business.

Start Thinking Digital Innovation

Digital innovation is not about executing a roadmap made up of series of projects that lay out a layer of new technologies on top of old. It is about creating new markets and expanding the existing business by investment in new technological solutions. This means that managers have to push the boundaries of ‘business as usual’ and work to radicalize their way of thinking.

Here is one suggested path you can take to innovate your digital business model.

Begin with Core Principles

Digital business model innovation should begin with a thorough understanding of the core economic principles upon which the business is built. And where can these principles be found? They are stated in the mission and vision statements for your business.

A mission or vision statement is the first step in understanding what your company believes is at the very core of the business. These core statements are generally created with great care and intensity by senior managers of the company. To start here would be to understand the heart of what is most important.

Of course, what is at the heart of a business can vary from company to company. Some companies are concentrating on products, others are passionate about customer relationships and still others emphasize process. Regardless of what the core principles of your business is, digital business model innovation can take the core to the next level of expansion.

From this centre, the work on digital innovation can move to other domains, markets, technologies, etc. as you explore both external and internal possibilities of expanding your business.

Here you are limited by only two things: i) your imagination and ii) what you can build.

I. Play with Imagination

Design

Developing many possibilities or scenarios based on imagination is the necessary first step. This is the design phase of your innovative digital business model. This is an opportunity for you to thoroughly explore the possibilities without restrictions. Don’t let practicalities hold you back at this stage of game. Doing so may be exercising the circular reasoning of self-defeat.

Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.” ~ Albert Einstein

It is important to create a safe environment for this exercise. The naysayers are a necessary part of the process and they help check the realities of ideas but not during the design stage. Fact is that the imagination can easily be quashed by reality and yet it is imagination that can open up new opportunities for the business that would never have been considered before.

Design phase is the one place where everyone can make mistakes and get away with it. The leader for this effort should ensure that the rules of exercising innovation sessions are well-understood.

Here are some high level examples of how financial services can imagine their digital business models:

Models that centre on Situations

situational

Models that centre on Segments

segment

Disclaimer: Above are only preliminary ideas and require further regulatory and technological due diligence to be functional.

II. Plan to Win

Planning is an important part of defining how the innovative business models should work to increase the pie. The process of planning is systematic and will help think through how customers will be served, how revenue will be generated, what will the costs be. Business Model Canvas is a great place to start thinking through a detailed plan for your new business models. Below is a brief video that explains the Business Model Canvas and here is a downloadable doc that gives even more details on the process.

In addition to Business Model Canvas, there is a great compilation of different types of digital business models currently operating documented by Professor Michael Rappa from University of North Carolina. This resource can also help in the Designing phase to kick-start discussions of innovative business ideas. The categories of different digital business models described on the site can provide a foundation for what type of business innovation makes sense for your business. Or even generate a new economy or disruptor.

Create Innovation Mindset

To create innovation mindset in the technology communities of your enterprise, there has to be a deliberate and purposeful effort to drive opportunities for innovation thinking. You might consider the use of a facilitator/consultant who can help accomplish this safe environment for imaginative discussions.

I have facilitated many sessions, from process mapping workshops to developing game plans for digital channels. In every case, the participants are more than willing and able to discuss a new future for their companies. I find that individuals who work in technology selected this career path because they believe in a better future filled with new innovative technologies that solve problems.

Additional Resources

Digital Disruptors: Models of Digital Operations, Part 2/3 Digital Business Transformation
This is a good summary of various aspects of digital business model.

How Kodak Failed
A great article in Forbes that provides a view into decision making process that led to the demise of Kodak, the inventors of digital photography. A ‘what not to do’ guide.

What can a CIO do to drive Digital Transformation?
HBR Digital Innovation and Transformation blog site where there are many searchable blogs about different aspects of Digital Business Models and Digital Transformation.

Defining the Business Model in the New World of Digital Business
An academic index on all the different ways a business model can be defined. It is a great summary and an attempt to define the concept of Business Model.

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Update: October 14, 2014

A great presentation by Didier Bonnet from Capgemini on the need for Digital Business Model Innovation at Oracle OpenWorld keynote:

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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by sharing information and generating ideas.

While my passion is business strategy and technology, my work spans a number of corporate disciplines including product development, process design, marketing and financial analysis. I was a Consultant at CIBC and Sr. Consultant at Innovapost where I had the pleasure of working with clients at Canada Post and Purolator. I also worked as a Digital Strategist for NBA, Kraft, Samsung and Travelex. My experience spans from start-ups to Fortune 500 companies.

openwrxconsulting.com

Service Level Agreements: Building Long Term Partnerships

Image“Business partners are the second most significant source of new innovation for enterprises.” ~ IBM Survey, 2006

Problem

Service Level Agreements in technology can often lead to a contentious relationship between a company that needs the service and the one that provides it.

In one of my engagements I found myself in a situation where there was much anxiety between a Fortune 500 company and one of its technology partners.  Neither party was clear on how to proceed with an agreement that required management of hundreds of unique deliverables, quality of  technical service, and ongoing service level management meant to support a newly implemented system.

Nonetheless a relationship had to be forged where both parties could give and take while keeping their minds on what was best for their companies.

Effort – The Service Levels

Given the situation, I realized that I had to find a win-win solution that enabled both parties to repair their relationship and ultimately meet the needs of their individual customers. Following is an account of the approach I took to defined SLAs based on Fortune 500 companies’ business needs:

1. Defined Business Objectives: The most important piece of work I undertook was defining business objectives for this relationship.  If there was one thing that both parties (even lawyers) could agree on was that they both wanted to be successful in this long-term relationship. So business objectives for this relationship provided common grounds both parties could agree to and accept as a foundation for the relationship.

2. Collected and prioritized list of deliverables: I collected and prioritized list of hundreds of business deliverables including reports, statistical business intelligence, tools, real-time vs. batch updates, timed queries, customized features, etc. that needed to be part of the agreement. I also took time to review the importance of each individual item to ensure that it was actually necessary from a business perspective. To have a partner report on items that no one will use for business decisions is a waste of time and effort for both parties.

3. Outlined architectural service requirements: These are services required by most technology systems but they may vary based on what type of architecture is in place or the  technical service that is being provided:

Service Requirement

Definition

Examples

Availability Amount of time the service  is available for use. 99.5 % availability required between the hours of 7 am and 7pm annually, and lower availability required during remainder of the time.E-commerce operations typically have extremely aggressive SLAs at all times; 99.999% availability is common requirement for a site that generates millions of dollars of revenue an hour.
Reliability Comparison of actual availability to planned availability. Reliability is measured in Mean Time To Failure (MTTF) in days. Minimum 40 Days of reliability is required by the site per quarter.
Scheduled Downtime Expected times when service is withdrawn for maintenance or upgrade purposes. Maximum of 15 hours per month, Saturdays 12am to 3am per week
Scalability Ability to increase resources as service needs change over time (i.e. increase in volume of users) Expected increase in volume of users by 25% annually.
Performance Time it takes to load a User Interface for any system or website within a given timeframe. CRM system user interface load time is expected to be minimum 2 seconds between the times of 6am to 8pm, thereafter it is expected to be minimum 5 seconds.
Defect Rate Number or percentages of errors in deliverables or changes to the system. Production failures should be no more than 5 annually. Production failures can include automated backups, restores, coding errors/rework

4. Defined expectations for Service Level Management: This section rounded out the SLA development process to allow business managers to manage metrics on an ongoing basis. This section includes:

i.         Change Management Process for managing major changes that take more than 2-3 days to complete.

ii.         Support Ticket Process for managing any errors or user problems with the system. Note that in a newly implemented system, always expect the number of defects to be higher than after normalization of system during business as usual.

iii.         Incident Management Process ensures that if there are significant issues like unscheduled downtime, there is a clear understanding of who should be notified, what actions need to be taken to address the downtime, what resources are available during off business hours to solve the problem, etc.

iv.         Reporting Process allows business managers of the system to manage their SLAs in a systematic way. Example would be schedule of monthly meetings to review exception reports where only breaches of metrics are reviewed.

5. Align business objectives with defined SLAs to ensure business needs are being met: It is essential that all SLAs are directly related to outlined business objectives. Without this step it is possible that you will ask and pay for service you don’t need or worse not have enough services to meet the customer’s needs.

Image

Process – The Agreement

After completing service levels, I went on to create a contract with the terms to enable these levels of service.  The agreement in this case needed to ensure that both parties clearly understood why the service metrics were important. It is a fact that if Fortune 500 company was to continue to provide the service necessary to serve its customers, the technology partner must ensure that they can provide it and continue to improve it as the need changes. But if the technology company failed to provide the service necessary, there would be financial consequences.

For each service level metric breach, a percent reduction in support costs charged by technology company was negotiated. These percentages were between 2% to 5% based on the importance of the service to the business. The technology partner needed to improve their service based on the needs of the business of their client, the Fortune 500 company. And the Fortune 500 company could concentrate on serving their customers rather than rigorously managing service providers.

IMPORTANT!

The financial reductions were not meant to cripple the service provider but ensure that the service behavior remains consistent. It was therefore not necessary to stage hardball negotiations, but rather reach an agreement where the partner is gently reminded of their responsibilities.

My ultimate goal here was to set up a long-term relationship where two partners could work together to grow each other’s business. A win-win partnership for the long-term.

Deliverables

  • Business objectives of the company that requires the service
  • Service levels defined based on business objectives including direct deliverables, architectural requirement and service level management processes
  • Agreement negotiated based on importance of each service level that enabled a business objective
  • A long term partnership that is set to enable new innovations

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Kiran Sohi’s career has focused on leading companies to success by enabling effective decision-making. While her passion is strategy and technology, her work spans a number of corporate strategy disciplines including product development, process design, marketing and financial forecasting.

Prior to finding OPEN WRX Consulting, Kiran was a business consultant at CIBC and Innovapost, where her clients included Canada Post and Purolator. She also had the pleasure of working as a strategist for NBA, Kraft, Samsung and Travelex. Visit openwrxconsulting.com for more info.