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Great reading on business model change

If you’re suffering from the heat in the office and are looking for some telco-related reading material to take down to the lake or beach, we can recommend the following two articles go straight to your printer.

John Hagel revisits his 1999 Harvard Business Review article on “Unbundling the Corporation” at his blog, Edge Perspectives. (If you didn’t know before that it makes sense to read blogs, you do now.) Some choice quotes:

Like the stock buybacks that I discussed in an earlier posting, these initiatives may reflect a more serious shortcoming: an institutional inability to internally generate profitable sources of growth. In fact, these initiatives may significantly distract executive (and investor) attention from the pressing need to restructure enterprises to create sustainable growth platforms.

When you compare R&D expenses of telcos against Internet players, they look very paltry; yet we’re assured that IMS will be deployed to deliver advanced integrated services for which the operators themselves (as opposed to brand or technology partners) will capture significant revenue. What gives? He continues…

In a nutshell, the article argued that most enterprises today are an unnatural bundle of three very different kinds of businesses - infrastructure management businesses, product innovation and commercialization businesses and customer relationship businesses. By trying to manage the inherently conflicting demands of these three businesses within a single enterprise, executives undermine the potential for profitable growth.

This completely aligns with our message here at Telco 2.0 and our manifesto, where we describe the likely layered model we believe the industry is going to be forced to adopt over time.

In a somewhat self-referential circle, TelecomVistas describes in some detail what that unbundling might look like, giving Nokia as an example of a master player of the game of anticipating industry modularisation. The same article glowingly refers back to our manifesto, which if you haven’t read it yet probably means you’ve just earned yourself another printout and 30 extra minutes down by the poolside.

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