Distinguish Commodity Solutions from Business Solutions



But how should we draw up the list of required Solutions?

The Baker is at a loss faced with the list of Solutions to chose from to cover all the functional domains of his activities.

One particularly structural classification consists in distinguishing between Commodity Solutions (those that are standard and identical for all enterprises) and Business Solutions (which enable us to differentiate ourselves).

The baker asks that, from now on, his Operation Model be presented in 2 categories. He is starting to see things more clearly.

  1. What is a Solution?

    A Solution is one part of the Operation Model modeled by the same Transformation team: it covers one or several Processes, sometimes simply Functions of a Process (e.g., pricing Solution or security Solution or Word-processing Solution).
    A Solution composes both the procedural Model for Human-Actors and the software Model for IT-Actors. This is why we prefer the term Solution to the traditional term of Application, which is limited to software and does not include the human procedures.

  2. Well-interfaced Solutions

    The main quality of a Solution is the absence of redundancy.
    The functional coverage must be clear: a given Function is only provided by one Solution.
    As an example, if a Solution manages Customer Information, all the other Solutions should feed into it or reuse the Functions it provides to update the Customer.
    Each Solution therefore provides a list of interfaces, which are reusable by the other Solutions.

  3. Many simple Solutions or a few large-scale Solutions?

    We can use a multitude of small Solutions: each Solution is easy to pick and use, but interfaces are numerous and create a complex system, hard to upgrade.
    We cannot recommend enough using a small number of key Solutions: each one is more complex because it uses part of the aforementioned interfaces, but the links between Solutions are far simpler. The possibility of integrating a complex system in two stages, first within the Solution and then between Solutions, means we gain in terms of testing, robustness and modularity.

    Choose between many small Solutions or few large Solutions
  4. Functional Domains

    We can classify the Operational Solutions in different domains:

    • Production of the Product be it a Good, Information, or a Service
    • Distribution of the Product Offer
    • Usage of the Product (for Goods and Information)
    • Product development and maintenance
    • Resource management: to manage Human Resources, IT Resources, Financial Resources, premises...
    • Managing the Enterprise
  5. Commodity Solutions and Business Solutions

    Business Solutions, sometimes called "Vertical Solutions", are the Distribution and Production Solutions.
    Commodity Solutions, sometimes called "Horizontal Solutions" are so called as they are the same, whatever the business: payroll or accounts are Commodity Solutions reused by Enterprises with different Businesses.
    At any given time, among the Business Solutions, some are differentiating, others are not. For example, insurance companies consider that managing claims is today commonplace. However, the day when they transform the current reimbursement processes into new Services, these Claims Solutions will become differentiating.

    So as not to complicate this presentation, we will keep the term "Business Solutions" for the competitive Business Solutions.

    Business and Commodity Solutions
  6. Keep the responsibility of Business Solutions

    The Business Solutions are the ones that enable us to differentiate ourselves. It is therefore important to control the Model and its execution.
    Controlling the Model is more important than controlling its execution.
    Thus Apple built its Product Model but has these Products Produced by Chinese enterprises for competitiveness reasons in compliance with a production Model, the essential of which has been defined by Apple.

    In the same way, Apple does not produce the Weather Information or iTunes music: it contents itself with building a Usability Model with this Information, which is the real competitive advantage.

    Regarding Distribution, Apple built a Distribution Model for its Apple stores, but it also leaves its partners the task of Distributing according to their own Model.

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The story of George the Baker is made available under the terms of the
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