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 <title>The IT Skeptic - Comments for &quot;Invalid claim that value networks supercede or trump value chains&quot;</title>
 <link>http://www.itskeptic.org/node/257</link>
 <description>Comments for &quot;Invalid claim that value networks supercede or trump value chains&quot;</description>
 <language>en</language>
<item>
 <title>Value Network Vs Value Chain</title>
 <link>http://www.itskeptic.org/node/257#comment-5835</link>
 <description>&lt;p&gt;Agreed - Value networks complements (absoultely not supersedes) value systems (not just value chains) - building value exchanges (tangible and intangible) complementing value driven processes.&lt;/p&gt;
&lt;p&gt;New book - The IT Value Network, Wiley, author Tony J Read&lt;/p&gt;
</description>
 <pubDate>Sat, 31 Oct 2009 18:33:19 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 5835 at http://www.itskeptic.org</guid>
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<item>
 <title>A quick qualification of &#039;they&#039;</title>
 <link>http://www.itskeptic.org/node/257#comment-1585</link>
 <description>&lt;p&gt;Hi everyone - seems my unguarded comment about what I am presenting on at the conference may be misintepreted as a slight against the conference commitee (!).   I would like to say this was a &#039;tongue in cheek&#039; comment as I am &#039;infamous&#039; for my ITIL specific presentations that are designed to decipher and ensure that those considering ITIL get MAXIMUM value out of their investment.  We have always colored our presentations with that caveat - &#039;to help protect an investment in ITIL&#039;. &lt;/p&gt;
&lt;p&gt;This year&#039;s conference is bar none the best agenda anywhere on service management and a testament to the volunteer efforts of the Committee.  I&#039;m pleased for the chance to present on something new, other than ITIL.  I should have said that!  That comment will cost me another round of cold ones for Committee and track leaders!&lt;/p&gt;
</description>
 <pubDate>Tue, 04 Sep 2007 03:09:45 +0000</pubDate>
 <dc:creator>Ian Clayton</dc:creator>
 <guid isPermaLink="false">comment 1585 at http://www.itskeptic.org</guid>
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<item>
 <title>When and where was Value Chain analysis standardized?</title>
 <link>http://www.itskeptic.org/node/257#comment-1584</link>
 <description>&lt;p&gt;The most important issue in this debate is that apparently I don&#039;t know what Value Chain analysis is at all. Key question for both of us perhaps is yours: &quot;Then where did all these industries go wrong in their readings?&quot;&lt;/p&gt;
&lt;p&gt;I have been laboring under the seeming mis-apprehension that Value Chain analysis is defined in Porter&#039;s Competitive Advantage book. I note that Competitive Advantage is not at all mathematical; there is not one equation in the book. There is no place for example where &quot;first-order derivatives&quot; or any similar concept is specified.&lt;/p&gt;
&lt;p&gt;As one who has built a fair number of models of varying types, all I see in Competitive Advantage is high level, notional guidance, open to a myriad of analytic modeling interpretations. &lt;/p&gt;
&lt;p&gt;Did Porter go further and define a rigorous modeling approach somewhere? Or was that the work of others? If so, who? And if it was the work of others, did Porter specifically endorse their flawed, linear assumptions? In particular, given that the discipline of Systems Dynamics was well established at the time Porter wrote Competitive Advantage, how could anyone building &quot;value chain&quot; models have overlooked its insights? &lt;/p&gt;
&lt;p&gt;Note: &lt;a href=&#039;http://www.value-chain.org/&#039; rel=&quot;nofollow&quot;&gt;VCOR&lt;/a&gt;&#039;s work is too recent to count in this debate I think. But is their IP now outdated? Seems a shame, having only been standardized in 2004; surely they must have seen something this fundamental coming...?&lt;/p&gt;
&lt;p&gt;My use of Value Chain may be more limited than you apparently realize. The (non-ordered and iterative) steps I follow upon engaging with a completely unknown process landscape would be: &lt;/p&gt;
&lt;p&gt;- Define the highest level outcomes/objectives of the processes - what constitutes a value-added result?&lt;br /&gt;
- Define a high-level conceptual sequence of activities necessary to achieve the result&lt;br /&gt;
- Clarify which activities are primary versus secondary&lt;/p&gt;
&lt;p&gt;At that point, I am satisfied with the value chain and would not carry the work further. (Bear in mind as an enterprise architect I then go on to a conceptual information model and a logical systems model, with cross-referencing in between each model.) If I was continuing the process analysis, I might move deeper into process analytics, including the sort of automated process simulation capable of identifying bottlenecks and other unexpected emergent behavior. I don&#039;t think chain versus network really matters at that level; there is no question that the more robust BPA tools can handle multiple event sources which I think gives the network dynamics you are seeking. Some initial skimming of the IEEE professional journals (I used the keywords &quot;discrete event simulation&quot;) in this problem area indicates to me that optimizing value networks  at scale might encounter computational intractability problems... is it possible that 20 years ago that such analysis was completely infeasible?&lt;/p&gt;
&lt;p&gt;&lt;a href=&#039;http://www.systemdynamics.org/conferences/1999/PAPERS/PARA78.PDF&#039; rel=&quot;nofollow&quot;&gt;This is an interesting paper.&lt;/a&gt; What is your opinion on the relationship between discrete event simulation and systems dynamics? &lt;/p&gt;
&lt;p&gt;Your point of view might be convincing to me if you could write an article entitled &quot;IT Value Chain Considered Harmful.&quot; I would welcome a detailed critique of my efforts here. But please bear in mind that Forrester-level system dynamics, and/or discrete event simulation, to me at least, appears to be a more detailed analysis phase, one that would be dependent on initial conceptual process definition work. I only use the Value Chain as a conceptual model, not a logical model which is how I would classify SD/DES efforts. One needs to bootstrap and scope the problem somehow. I don&#039;t see anything nearly as detailed as Porter available for this purpose in the Value Network world, yet.&lt;/p&gt;
&lt;p&gt;The issue of primary versus supporting processes is one you&#039;ve been avoiding. Stabell and Fjeldstad call for their concept of &quot;value networks&quot; to include that key distinction. Verna Allee does not seem to recognize this distinction. What is your opinion, and wouldn&#039;t it be accurate to say that this is a significant divergence in Value Network theory? Are we already seeing the emergence of competing schools of thought?&lt;/p&gt;
&lt;p&gt;Finally - another key issue for me is whether the value chain primary stream segments are activities or participants. The ITIL critique on page 49, consistent with much of the other VN literature, casts them as &lt;em&gt;participants&lt;/em&gt;. The business process community, for better or worse, sees the value chain as a set of &lt;em&gt;activities&lt;/em&gt;. The more I think about it, the more I believe that this is a highly significant semantic disconnect in interpretations. If one reduces the value chain to its participants, then the value network critique is compelling. If one sees VC as activities, then VN to my mind is less revolutionary, because the VC activities can be instantiated by multiple players. &lt;/p&gt;
&lt;p&gt;This is why I call for an ontological/metamodeling approach, which I hardly think is polemic. We are arguing about high level abstractions where &lt;em&gt;we haven&#039;t even agreed upon what the base meanings are&lt;/em&gt;. To ask, &quot;why do we need this now when we didn&#039;t 20 years ago?&quot; is reactive and also not in the spirit of the collaborative search for understanding.  &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Tue, 04 Sep 2007 02:15:37 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1584 at http://www.itskeptic.org</guid>
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<item>
 <title>- “The reason this all</title>
 <link>http://www.itskeptic.org/node/257#comment-1581</link>
 <description>&lt;p&gt;- “The reason this all started for me was not pure business analysis, but IT (as a business) analysis. Who has done a &quot;value network&quot; for IT? &lt;/p&gt;
&lt;p&gt;Doesn’t it strike you as odd that SAP and Oracle, as well as HP and IBM, have adopted Value Network language?  I suggest taking a closer look at their recent tools, products as well as customers, and their internal IT organisations.  Because you haven’t encountered it, doesn’t mean it does not exist.   &lt;/p&gt;
&lt;p&gt;- “Re: bullwhip effect. How on earth one incorporates that into the simple Value Chain chevron is beyond me.”&lt;/p&gt;
&lt;p&gt;This is trivial to do.  As called out earlier, it’s been done for years.  That&#039;s what makes it so annoying, it shows up in real life as predicted. &lt;/p&gt;
&lt;p&gt;-  “This BPTrends article discusses bullwhip effects in the context of business process modeling and simulation - note that the author does not use the term &quot;value network.&quot;&lt;/p&gt;
&lt;p&gt;Did you see the screen shots?  Structurally similar to VN analysis.  The key difference between system dynamic loops and a basic VN loop is math.  The former applies first-order derivatives to quantify the relationship.  &lt;/p&gt;
&lt;p&gt;- “There&#039;s been an ongoing implication in this debate that BPR is discredited, therefore BPM is discredited, therefore &quot;process&quot; is discredited and we need this mythical new paradigm - to solve problems well-recognized by the BPM community!”&lt;/p&gt;
&lt;p&gt;VN does not imply that process is discredited or that it changes fundamental process thinking.  The fundamental change is linear to non-linear structures, as echoed by ITIL and the lifecycle.&lt;/p&gt;
&lt;p&gt;BPR has been discredited as these projects are consistently characterized, as a 1998 study by D.K. Rigby showed, by &quot;unexpected long-term side effects such as declining morale, loss of motivation, erosion of trust and weakened teamwork.&quot; &lt;/p&gt;
&lt;p&gt;Detailed case studies conclude that BPR wreaks irreversible and damaging change on productivity.   Is BPM the right successor?  It remains to be proven.  But, BPM projects are, thus far, not performing much better.&lt;/p&gt;
&lt;p&gt;- “Value chain for me is a simpler, higher level abstract construct that helps to make sense out of what might otherwise be a competing set of functional silos.”&lt;/p&gt;
&lt;p&gt;It may be simpler but that doesn’t make it correct.  I find it difficult to disregard the work of Forrester, a potential Nobel Prize candidate.  Nor could ITIL, apparently.&lt;/p&gt;
&lt;p&gt;- &quot;Value Chain, in my reading of Porter&#039;s Competitive Advantage, does *not* mean naive, sequential process definition and analysis at the more detailed levels of the problem&quot;&lt;/p&gt;
&lt;p&gt;Then where did all these industries go wrong in their readings?  For 20 years, the analysis and implementation of value chains have followed Porter&#039;s academic description of horizontal sequencing as the specific basis for value creation.&lt;/p&gt;
&lt;p&gt;- “I review pages 368-372 in Competitive Advantage, he talks specifically about complex patterns of interrelationships and the need to understand them comprehensively.”&lt;/p&gt;
&lt;p&gt;Yes, he does.  He then proceeds to break them into analyzable clusters and lining them up sequentially in what he calls a “horizontal” strategy.&lt;/p&gt;
&lt;p&gt;For some reason, this does seem to be an emotionally-charged debate rather than earnest search for understanding.  Industry momentum as well as prior research is too compelling to fall into polemics on semantics or metamodels.      Niether were required when VC were in favour.  Why are they  essential now?   I think I’ll take the aforementioned advice and bark up a different tree.  Cheers.&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 18:13:49 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1581 at http://www.itskeptic.org</guid>
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<item>
 <title>Where is the IT Value Network? </title>
 <link>http://www.itskeptic.org/node/257#comment-1580</link>
 <description>&lt;p&gt;The reason this all started for me was not pure business analysis, but IT (as a business) analysis. Who has done a &quot;value network&quot; for IT? The ITIL Service Lifecycle is a clearly ordered value chain. I would fault it however for not distinguishing between primary and supporting processes. &lt;/p&gt;
&lt;p&gt;As I&#039;ve &lt;a href=&#039;http://erp4it.typepad.com/erp4it/2007/06/more-on-value-c.html&#039; rel=&quot;nofollow&quot;&gt;noted elsewhere&lt;/a&gt;, there are various interpretations of Value Network; Stabell &amp;amp; Fjeldstad clearly state that their concept accomodates primary versus supporting processes. Others seem to think that distinguishing primary versus supporting is inadvisable. So, there is not even any unanimity as to what constitutes a Value Network. The poster above also talks about the &quot;structure of the Value Chain.&quot; What is that structure? All I know is the matrix chevron; certain semantic assumptions can be made concerning it, but those to my knowledge have not been standardized - probably the root of the issue here. In order for the term to have any analytical meaning for me, reference metamodels would need to be constructed. Then perhaps the debate might be useful.  &lt;/p&gt;
&lt;p&gt;Re: bullwhip effect. How on earth one incorporates that into the simple Value Chain chevron is beyond me. I also do not see how it is inherently supported by Value Networks, if page 52 on Service Strategy is supposed to be a representative example. By the time one is at that level of detail, the discussion has moved into the domain of what I would call business process analysis, which is where we have the modeling and simulation technology to identify emergent dynamics - see for example &lt;a href=&#039;http://www.intalio.com&#039; rel=&quot;nofollow&quot;&gt;Intalio&lt;/a&gt;, or &lt;a href=&#039;http://www.capi.net/method.htm&#039; rel=&quot;nofollow&quot;&gt;Greg Hansen&lt;/a&gt;, who actually references Systems Dynamics. These efforts - which require specific, not abstract, conceptual frameworks and very detailed and rigorous method - have gone forth under the rubric of process engineering, simulation, and related terms, not &quot;value network engineering and simulation&quot; or some such. &lt;a href=&#039;http://www.bptrends.com/publicationfiles/11-03%20WP%20Mod%20Simulation%20of%20BPM%20-%20Barnett-1.pdf&#039; rel=&quot;nofollow&quot;&gt;This BPTrends article&lt;/a&gt; discusses bullwhip effects in the context of business process modeling and simulation - note that the author does not use the term &quot;value network.&quot; &lt;/p&gt;
&lt;p&gt;There&#039;s been an ongoing implication in this debate that BPR is discredited, therefore BPM is discredited, therefore &quot;process&quot; is discredited and we need this mythical new paradigm - to solve problems well-recognized by the BPM community! I still think that the Service Strategy authors would have been well advised to consult more broadly before writing section 3.4. &lt;/p&gt;
&lt;p&gt;Value chain for me is a simpler, higher level abstract construct that helps to make sense out of what might otherwise be a competing set of functional silos. It operates at 50,000 feet. Fine tuning supply chain flow (to where you might want to purchase an Intalio) is more at 25,000 feet. Value Chain, in my reading of Porter&#039;s Competitive Advantage, does *not* mean naive, sequential process definition and analysis at the more detailed levels of the problem - I am really not sure where that assumption has crept into the debate. (Again, what are the semantics of the Value Chain matrix chevron?) That is the straw man continually being set up and knocked down here, to little point. Porter does not talk about the specifics of process modeling and analysis, as far as I have seen - and as I review pages 368-372 in Competitive Advantage, he talks specifically about complex patterns of interrelationships and the need to understand them comprehensively. &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 13:35:22 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1580 at http://www.itskeptic.org</guid>
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<item>
 <title>See what I mean?  I&#039;m sure</title>
 <link>http://www.itskeptic.org/node/257#comment-1579</link>
 <description>&lt;p&gt;See what I mean?  I&#039;m sure you were similarly impressed with the bptrends article as well as the follow on carping.&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 12:22:47 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1579 at http://www.itskeptic.org</guid>
</item>
<item>
 <title>Cold one at the conference from me</title>
 <link>http://www.itskeptic.org/node/257#comment-1577</link>
 <description>&lt;p&gt;Charles &lt;/p&gt;
&lt;p&gt;Once again you nailed it.  I am fed up with folks who don&#039;t read the point made by us who bother to try and contribute to these discussions in the hope they help others understand how to decipher and judge the &#039;smartness&#039; and due diligence applied by the &#039;world&#039;s ten ITSM experts&#039;.  Thi sblogger just wants to fiddle away with his/her tune and express to us how much they know - instead of answering the question.  Once again you have reinforced a point I made simply with the actual page numbers and clear evidence.  Value networks have NOTHING to do with value chains nor do value streams (although they are closer to chains), the author messed it up.&lt;/p&gt;
&lt;p&gt;Cold one on me at the conference - I shall be presenting on getting ready for ISO 20000 audits - they won&#039;t let me present on ITIL anymore....&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 04:41:37 +0000</pubDate>
 <dc:creator>Ian Clayton</dc:creator>
 <guid isPermaLink="false">comment 1577 at http://www.itskeptic.org</guid>
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<item>
 <title>Paul Harmon article</title>
 <link>http://www.itskeptic.org/node/257#comment-1576</link>
 <description>&lt;p&gt;The article (by Paul Harmon at BPTrends, not Cutter per se; there is a relationship but not entirely clear to me) was published &lt;a href=&#039;http://www.bptrends.com/publicationfiles/advisor20070626.pdf&#039; rel=&quot;nofollow&quot;&gt;here&lt;/a&gt;. This has never been about &quot;refuting&quot; value networks, simply questioning the claim that they are a paradigm improvement over value chains for analysis. &lt;/p&gt;
&lt;p&gt;Key quote:&lt;/p&gt;
&lt;p&gt;&lt;em&gt;There have been several books published on Value Nets. The book that is most cited is David Bovet and Joseph Martha&#039;s Value Nets: Breaking the Supply Chain to Unlock Hidden Profits. (Wiley, 2000). I don&#039;t think most business analysts who had been working on process change would find the book very convincing.&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;I have written extensively on this elsewhere on this thread and tire of the subject. Functional modeling is not superior to process modeling; they are two tools in the analysts&#039; toolbox, each with strengths and limitations. I will say, however, that the attempt at discrediting business process analysis on page 51-52 of Service Strategies is one of the most questionable parts of the entire ITIL rewrite I have encountered as I read through it. It essentially says that &quot;because the process abstraction on page 51 doesn&#039;t match the reality of the work as depicted on Page 52, ipso facto Value Networks are superior to Value Chains (understood as business process analysis). The book then goes on to use a linear flow on page 67. My view is still that the ITIL v3 authors did not entirely grasp what they were doing from a methodology standpoint when they started down this road. &lt;/p&gt;
&lt;p&gt;In order to debate this question systematically, we would have to clarify an ontology of process modeling terminology. I have a first cut &lt;a href=&#039;http://erp4it.typepad.com/erp4it/2007/09/a-process-ontol.html&#039; rel=&quot;nofollow&quot;&gt;here&lt;/a&gt; (adopted from my presentation to be delivered at the US ITSMF). &lt;/p&gt;
&lt;p&gt;But I have no evidence that the disgraced plagiarist Dool (for I believe that is the poster here) even has a copy of ITIL or is interested in discussing the particulars of IT service management or BPM/BPA as we practice it in the architecture and process commmunities; the focus seems to be more on using this forum as a soapbox for Dool&#039;s vast knowledge of non-IT-specific business theory.&lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 04:21:17 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1576 at http://www.itskeptic.org</guid>
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<item>
 <title>The United States led the</title>
 <link>http://www.itskeptic.org/node/257#comment-1575</link>
 <description>&lt;p&gt;The United States led the way into the era of mass production in the 1900s, whilst Japan showed the way into lean production in the 1950s.  Now Europe is showing the world how to do build-to-order.  Across industry sectors we are observing leading companies taking a more systemic perspective. The ultimate problem is that if the end customer needs are not tied into the value chain, local optimisation at expense of the performance of the entire value chain is inevitable.&lt;/p&gt;
&lt;p&gt;Many American industries who copied mass production logic have not moved beyond this mindset. And as it so happens, the problems with the mass production model are becoming more and more apparent. But they are not new problems. In fact, there is a famous quote by Alfred P. Sloan, where he said, &quot;It is not often that the chief executive of a large corporation himself discovers visible overproduction by a physical check of the inventory. But automobiles are big units easy to count&quot;. &lt;/p&gt;
&lt;p&gt;We see the problems associated with optimising only sub-pieces of the value stream are endemic to a number of industries that provide customised products, such as information technology, electronics, furniture, and even raw materials.&lt;/p&gt;
</description>
 <pubDate>Sun, 02 Sep 2007 00:49:44 +0000</pubDate>
 <dc:creator>Peter Nilsson</dc:creator>
 <guid isPermaLink="false">comment 1575 at http://www.itskeptic.org</guid>
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<item>
 <title>For some reason, Norwegians</title>
 <link>http://www.itskeptic.org/node/257#comment-1574</link>
 <description>&lt;p&gt;For some reason, Norwegians have really taken to this topic.  Peter Gottschalk, for example, in his 2007 book _Business Dynamics in Information Technology_.  Or Lars Huemer in his recent case study &quot;Value Creation, Coordination and Positioning in Supply Relationships&quot;, where he expresses &quot;reservations as to the usefulness of the value chain model&quot; and suggests (goodness) the value network as an improved alternative.&lt;/p&gt;
&lt;p&gt;Maybe a fellow Viking can explain why.&lt;/p&gt;
&lt;p&gt;Meanwhile, visitor, I personally think you are barking up the wrong tree.  This thread is less about the search for improved methods and more about defending vested points of view.&lt;/p&gt;
</description>
 <pubDate>Sat, 01 Sep 2007 21:21:09 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1574 at http://www.itskeptic.org</guid>
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<item>
 <title>What ever happened to the</title>
 <link>http://www.itskeptic.org/node/257#comment-1573</link>
 <description>&lt;p&gt;What ever happened to the promised Cutter Consortium article refuting Value Networks?  It was surprising to instead find Cutter offering courses on Value Networks.  Was there a change of heart?&lt;/p&gt;
&lt;p&gt;With regards to the debate, there was a call out of the most well-known and demonstratable issue with Value Chains: the bullwhip effect.  There are another half dozen issues  but the easiest to demonstrate is the bullwhip effect.  Easy because it is trivial to model and compare to real-life observations.  Here is a simple on-line game to that effect: http://forio.com/simulation/nearbeer/index.htm?FD_action=start_trial.&lt;/p&gt;
&lt;p&gt;The problem doesn&#039;t just affect material flow.  Information flow is similarly troubled.  As is knowledge and financial flow.  The root of the problem is the structure of the value chain.  The linear sequence and separation of activities creates built-in delays in feedback.  Small changes in downstream demand are dramatically amplified upstream.  The result is what is known as “oscillatory nonlinear or chaotic behavior” in the long-term behavior of value chains.  Commonly known as “boom and bust cycles.”  This holds true even for “instances” of value chains.   (cf. Guckenheimer and Holmes (1983) Nonlinear Oscillations, Dynamical Systems and Bifurcations of Vector Fields).  &lt;/p&gt;
&lt;p&gt;Burbidge named this the “Law of Industrial Dynamics”: If demand for products is transmitted along a series using control ordering, the demand variation will increase with each transfer, resulting in inevitable cycles of boom and bust, even in IT organizations.  To have industry credibility, value chain models must, at a minimum, explicitly recognize and cope with the bullwhip effect.  Those based on Porter&#039;s model do not.&lt;/p&gt;
&lt;p&gt;These swings in performance are further compounded by issues such as poor decision making, varying lead times and capacity utilization goals (cf. Mason¬Jones, R. and Towill, D.R., 1997, Information enrichment: designing the supply chain for competitive advantage)&lt;/p&gt;
&lt;p&gt;If you are versed in Lyapunov or Eigenvalue methods, you can find an analysis here: Abarbanel, H.D.I., Brown, R., Sidorowich, J.J. and Tsimring, L.S. (1993) ‘The analysis of observed chaotic data in physical systems’&lt;/p&gt;
&lt;p&gt;Manufacturers like Toyota understood the problem, so they were early in dealing with it.  Lean Thinking and Agile Production, most notably.  Both are models that explicitly perform echelon elimination (break the links in the Value Chain) in order to mitigate the bullwhip effect. (cf. Towill, D.R, McCullen, P.L., (1999), The Impact of Agile Manufacturing on Supply Chain Dynamics, Internat. Journal of Logistics Management and McCullen, P., Saw, R., 2001, Designing the Agile Supply Chain, Proc. of The International Symposium on Logistics).&lt;/p&gt;
&lt;p&gt;So is the Value Network a paradigm improvement?  Industry stalwarts such as Toyota, Wal-Mart, SAP and Boeing seem to think so.&lt;/p&gt;
</description>
 <pubDate>Sat, 01 Sep 2007 18:19:04 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1573 at http://www.itskeptic.org</guid>
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<item>
 <title>Add value</title>
 <link>http://www.itskeptic.org/node/257#comment-1238</link>
 <description>&lt;p&gt;No one challenges healthy discussion about fundamentals. I agree with Charles et al, don&#039;t try to claim something as your own when it isn&#039;t - the internet is too powerful a beast to try and get away with that. There is always someone out there to validate and check your work - it is what makes this type of communication medium such a valuable resource.&lt;/p&gt;
&lt;p&gt;Knowing that someone is watching over us, increases the pressure to deliver quality narrative.&lt;/p&gt;
&lt;p&gt;Even the IT Skeptic site itself is monitored and subject to scrutiny, cross examination and even light criticism.&lt;/p&gt;
&lt;p&gt;&lt;a href=&quot;http://blog.certification.info/2007/06/best-practice-change-control-system.html&quot; title=&quot;http://blog.certification.info/2007/06/best-practice-change-control-system.html&quot; rel=&quot;nofollow&quot; rel=&quot;nofollow&quot;&gt;http://blog.certification.info/2007/06/best-practice-change-control-system.html&lt;/a&gt;&lt;/p&gt;
&lt;p&gt;I applaud Charles T. Betz for his efforts - he has added true value for me.&lt;/p&gt;
</description>
 <pubDate>Wed, 27 Jun 2007 07:50:00 +0000</pubDate>
 <dc:creator>itsmer</dc:creator>
 <guid isPermaLink="false">comment 1238 at http://www.itskeptic.org</guid>
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 <title>He presents the examples as his own narrative. </title>
 <link>http://www.itskeptic.org/node/257#comment-1231</link>
 <description>&lt;p&gt;He presents the examples as his own narrative, when he could just as easily (and more honestly) copied them and put them in quotes. Plagiarism doesn&#039;t get a pass just because it happens on a blog and not a peer reviewed journal. &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 17:10:14 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1231 at http://www.itskeptic.org</guid>
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<item>
 <title>Have responded</title>
 <link>http://www.itskeptic.org/node/257#comment-1230</link>
 <description>&lt;p&gt;I have responded on my blog here:&lt;/p&gt;
&lt;p&gt;&lt;a href=&quot;http://erp4it.typepad.com/erp4it/2007/06/more-on-value-c.html&quot; title=&quot;http://erp4it.typepad.com/erp4it/2007/06/more-on-value-c.html&quot; rel=&quot;nofollow&quot;&gt;http://erp4it.typepad.com/erp4it/2007/06/more-on-value-c.html&lt;/a&gt;&lt;/p&gt;
&lt;p&gt;This post is not to his specifics, but to the general issues I perceive to be in play in this debate: the overall concept of &quot;value configuration&quot; analysis vs. &quot;value chain.&quot; I have debated at the specifics level a number of times and don&#039;t see any value add there. &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 15:58:23 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1230 at http://www.itskeptic.org</guid>
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<item>
 <title>Ad hominums</title>
 <link>http://www.itskeptic.org/node/257#comment-1228</link>
 <description>&lt;p&gt;And I notice no response to the examples Dool researched and offered.  Just a claim that someone else&#039;s paper will take care of all this argument.&lt;/p&gt;
&lt;p&gt;I will say I appreciate Dool providing this information.  It has given a different way to see the problems of IT.&lt;/p&gt;
&lt;p&gt;Alfonso&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 14:40:10 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1228 at http://www.itskeptic.org</guid>
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<item>
 <title>You  gents take yourself much too seriously</title>
 <link>http://www.itskeptic.org/node/257#comment-1227</link>
 <description>&lt;p&gt;Dool specifically cites the article and uses examples from it.  Given this is a blog and not an academic paper or book, how is this plagiarism?  This sounds more like another round of ad hominums from the offended parties.&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 14:00:42 +0000</pubDate>
 <dc:creator>Visitor</dc:creator>
 <guid isPermaLink="false">comment 1227 at http://www.itskeptic.org</guid>
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<item>
 <title>Classic &#039;pulling away of the academic elitist curtain&#039;</title>
 <link>http://www.itskeptic.org/node/257#comment-1223</link>
 <description>&lt;p&gt;Charles&lt;/p&gt;
&lt;p&gt;Oh classic!  This is exactly the level of plagiarism that ITIL V2 suffered from and that I documented last year.  Why don&#039;t these elitists get it - quoting sources ADDS credibility and actually shows you have done your homework.  Leveraging a few pre-existing ideas in a novel way to solve a problem more effectively or efficiently is what consulting is all about.&lt;/p&gt;
&lt;p&gt;Come on Dool.  Put together a plausible constructive new thought and some practical examples of how it value chain might be applied - or to support your claim it cannot.  Ideally - use the Service Strategy text as the foundation for the discussion - as we are trying to do.&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 03:48:21 +0000</pubDate>
 <dc:creator>ianclayton</dc:creator>
 <guid isPermaLink="false">comment 1223 at http://www.itskeptic.org</guid>
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 <title>Dool plagiarism</title>
 <link>http://www.itskeptic.org/node/257#comment-1222</link>
 <description>&lt;p&gt;OK, I finally tracked down the Stabell and Fjelstad reference. It is currently available at &lt;/p&gt;
&lt;p&gt;&lt;a href=&quot;http://www.agbuscenter.ifas.ufl.edu/5188/miscellaneous/configuring_value.pdf&quot; title=&quot;http://www.agbuscenter.ifas.ufl.edu/5188/miscellaneous/configuring_value.pdf&quot; rel=&quot;nofollow&quot;&gt;http://www.agbuscenter.ifas.ufl.edu/5188/miscellaneous/configuring_value...&lt;/a&gt;&lt;/p&gt;
&lt;p&gt;I had searched for it previously, but not found it; this may be a transitory or illicit posting of the Strat Mgmt J. article. &lt;/p&gt;
&lt;p&gt;First, I think Dool has some plagiarism to answer for. The following passages are all presented as his original thought, not specifically quoted or cited (other than the overall reference to Stabell and Fjelstad). I present first Dool&#039;s post, and then the Stabell/Fjelstad original for five passages:&lt;/p&gt;
&lt;p&gt;Dool:&lt;br /&gt;
&lt;em&gt;In an insurance company, for example, what is received, what is produced, and what is shipped? Few executives would consider uninsured people as raw material from which to produce insured people.&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;Stabell/Fjelstad:&lt;br /&gt;
&lt;em&gt;What is received, what is produced, and what is shipped? Few insurance executives would perceive uninsured people as the raw material from which they produce insured people.&lt;/em&gt; &lt;/p&gt;
&lt;p&gt;Dool:&lt;br /&gt;
&lt;em&gt;Nor would they describe the value creation process as a paper-transforming organization, manufacturing policies from blank paper.&lt;br /&gt;
&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;Stabell/Fjelstad:&lt;br /&gt;
&lt;em&gt;Nor would a description of an insurance company as a paper-transforming company, producing policies from blank paper, capture the value creation logic...&lt;br /&gt;
&lt;/em&gt; &lt;/p&gt;
&lt;p&gt;Dool:&lt;br /&gt;
&lt;em&gt; This mental model of a paper-flow-transformation-process misses the logic of important activities such as reinsurance to cover risk, actuarial calculations and customer relationship management...&lt;br /&gt;
&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;Stabell/Fjelstad:&lt;br /&gt;
&lt;em&gt;The logic of many strategically important activities such as reinsurance to cover risk, actuarial calculations, and customer relationship management are not well described by a paper-flow-transformation-process perspective.&lt;br /&gt;
&lt;/em&gt; &lt;/p&gt;
&lt;p&gt;Dool:&lt;br /&gt;
&lt;em&gt;Or take the example of a bank. A value chain would consider deposits as the &#039;raw material&#039; that the bank&#039;s primary activities transform into loans, or postulate that all primary banking activities collapse into a single major activity named operations.&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;Stabell/Fjelstad:&lt;br /&gt;
&lt;em&gt;Similar problems occur in the analysis of banks. Our experience is that value chain analysis frequently results in either postulating deposits as the ‘raw material’ that the bank’s primary activities transform into loans, or postulating that all primary banking activities collapse into a single major activity class: operations.&lt;br /&gt;
&lt;/em&gt; &lt;/p&gt;
&lt;p&gt;Dool:&lt;br /&gt;
&lt;em&gt; In either case, the value chain model cannot deal explicitly with both lenders and borrowers as bank customers. Rather, the logic of banking is obscured by focusing attention on transaction-processing unit costs, with little attention to interest spread and risk management.&lt;br /&gt;
&lt;/em&gt;&lt;/p&gt;
&lt;p&gt;Stabell/Fjelstad:&lt;br /&gt;
&lt;em&gt;In either case, the chain model cannot deal explicitly with both lenders and borrowers as bank customers. The value chain metaphor obscures the competitive logic of banking by focusing attention on transaction-processing unit costs, with little attention to interest spread and risk management.&quot;&lt;/em&gt; &lt;/p&gt;
&lt;p&gt;I would never claim such clearly derivative material as my own in any forum; looks pretty plainly like passages were lifted wholesale from the easily available Stabell/Fjelstad PDF, given some minor tweaks, and presented as Dool&#039;s original analysis. The identical strings are notable. &lt;/p&gt;
&lt;p&gt;I will now turn to the excellent Stabell and Fjelstad paper, which is the first coherent description of value networks I have encountered, and gives me a solid defense for my approach to date. The differences are merely over semantics bordering on dogma, as I will show in my next blog post at &lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;www.erp4it.com&lt;/a&gt; (I am sure Skeptic appreciates me spreading the load). &lt;/p&gt;
&lt;p&gt;PS. Since we can all edit our posts at any time, I have a PDF of Dool&#039;s post as it appeared tonight and have sent same to Skeptic as I post this. &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Mon, 25 Jun 2007 02:38:48 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1222 at http://www.itskeptic.org</guid>
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<item>
 <title>third time around</title>
 <link>http://www.itskeptic.org/node/257#comment-1218</link>
 <description>&lt;p&gt;I&#039;ve debated Dool before, to little satisfaction. I am also wondering if he is one or both of my antagonists on these threads, where I have put forth my point of view in great detail (and therefore don&#039;t want to repeat myself too much here):&lt;/p&gt;
&lt;p&gt;&lt;a href=&quot;http://erp4it.typepad.com/erp4it/2007/02/value_network_a.html&quot; title=&quot;http://erp4it.typepad.com/erp4it/2007/02/value_network_a.html&quot; rel=&quot;nofollow&quot;&gt;http://erp4it.typepad.com/erp4it/2007/02/value_network_a.html&lt;/a&gt;&lt;br /&gt;
&lt;a href=&quot;http://itilcommunity.com/modules.php?name=Forums&amp;amp;file=viewtopic&amp;amp;t=1931&amp;amp;postdays=0&amp;amp;postorder=asc&amp;amp;start=0&quot; title=&quot;http://itilcommunity.com/modules.php?name=Forums&amp;amp;file=viewtopic&amp;amp;t=1931&amp;amp;postdays=0&amp;amp;postorder=asc&amp;amp;start=0&quot; rel=&quot;nofollow&quot;&gt;http://itilcommunity.com/modules.php?name=Forums&amp;amp;file=viewtopic&amp;amp;t=1931&amp;amp;p...&lt;/a&gt;&lt;/p&gt;
&lt;p&gt;given the commonality of references and a similar rhetorical style. &lt;/p&gt;
&lt;p&gt;Main points:&lt;/p&gt;
&lt;p&gt;1. There are a number of value chain representations of IT services I have seen, and I find them intuitively useful. The primary value chain is the main service lifecycle (&quot;inspire to retire&quot;). ITIL&#039;s move towards a service lifecycle approach clearly strengthens the argument that the value chain concept can be usefully applied to IT. The tension between governance (aka supporting) processes and that main value chain is a common theme in practical IT. &lt;/p&gt;
&lt;p&gt;2. I have yet to see any tangible evidence of the &quot;harm&quot; of using value chain as an analysis tool for understanding IT service delivery dynamics, nor (especially) have I seen any tangible representations of a value network approach to IT services that can be evaluated for superiority of analytical power. This discussion is still at a &quot;meta&quot; level - the claim is that a value network analysis of IT would be superior, if one existed. But none do that I am aware of. The Service Strategy volume is just silly in that regard - if a value network approach is superior, why not devote some effort to diagramming and defining an IT value network? They threw out the v2 attempt at an IT value chain (which I had some problems with; it was pretty far removed from Porter). But they didn&#039;t replace it with anything other than the assertion that a value network approach would be superior. They didn&#039;t actually DO it. &lt;/p&gt;
&lt;p&gt;The absence of anyone having done that work is why this debate just seems surreal to me. Where&#039;s the beef?&lt;/p&gt;
&lt;p&gt;3. Paul Harmon of BPTrends and Cutter Consortium will be publishing an analysis on 6/26 that I am eagerly anticipating. I believe he will be casting a skeptical - and qualified - eye on claims that value networks are a paradigm *improvement* over value chains. See &lt;a href=&quot;http://www.bptrends.com/&quot; title=&quot;http://www.bptrends.com/&quot; rel=&quot;nofollow&quot;&gt;http://www.bptrends.com/&lt;/a&gt; &lt;/p&gt;
&lt;p&gt;4. There are definitional issues at play here. What is the canonical definition of a value network? Did Porter formalize the definition of a value chain? I have corresponded with an organization dedicated to value chain analysis, who stated that they can and do apply value chain analysis to services. Generally, I am making some assumptions that the analytical form has some elasticity, where Dool seems to assume it is rigid. &lt;/p&gt;
&lt;p&gt;Charles T. Betz&lt;br /&gt;
&lt;a href=&quot;http://www.erp4it.com&quot; title=&quot;http://www.erp4it.com&quot; rel=&quot;nofollow&quot;&gt;http://www.erp4it.com&lt;/a&gt;&lt;/p&gt;
</description>
 <pubDate>Sun, 24 Jun 2007 23:11:04 +0000</pubDate>
 <dc:creator>Charles T. Betz</dc:creator>
 <guid isPermaLink="false">comment 1218 at http://www.itskeptic.org</guid>
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<item>
 <title>I&#039;ll leave aside the ad</title>
 <link>http://www.itskeptic.org/node/257#comment-1217</link>
 <description>&lt;p&gt;I&#039;ll leave aside the ad hominums, but you&#039;ve touched on my point of frustration.&lt;/p&gt;
&lt;p&gt;If major institutions are today, in real-life practice, leveraging ideas to solve historically persistent problems, how can we call it a fad?&lt;/p&gt;
&lt;p&gt;If something is too complex, abstract or difficult to be placed in the form of a process, does it fail the pragmatism test?&lt;/p&gt;
&lt;p&gt;Is something to be called theory because it cannot be applied by the service desk?&lt;/p&gt;
&lt;p&gt;We forget how technologists once disdained the ideas of &quot;people and process&quot; as too abstract or distracting from the virtues of system administration.  Now we know better.  Or do we?&lt;/p&gt;
&lt;p&gt;There is a failure on our part when we regurgitate the same failed organizational formulas.&lt;/p&gt;
</description>
 <pubDate>Sun, 24 Jun 2007 20:48:12 +0000</pubDate>
 <dc:creator>dool</dc:creator>
 <guid isPermaLink="false">comment 1217 at http://www.itskeptic.org</guid>
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