What the hell is e-content anyway?

Why getting e-content right is vital to your business survival.

As mentioned in the previous article, the value chain of the future will be very different to what we know today.

In this connected value chain, a direct interface is enabled between all contributors and the consumer.  This means that not only can the connector ensure that the consumer is connected to the most appropriate contributors, but also that the contributors can specifically address the desires of that consumer.

As a result waste is reduced significantly.  Much more so than could be achieved with a traditional value chain.  Contributors are able adapt their offerings to perfectly match each consumer. 



The connected value chain

 

For established businesses, particularly those that rely heavily on branded offerings, this presents a very significant threat.  It’s also an opportunity, but I am calling it out as a threat because the barriers of survival are going to be greater than the barriers of entry.  This will level the playing field, as almost overnight large branded businesses lose a large portion of their competitive advantage.  These incumbents will need to reformat their business to operate in a very different environment.  The trouble is that all those parts of the business that previously were required to define how to connect with their partners will no longer be required.  Unfortunately they will most likely be tightly embedded across their entire organization, due to the relentless pursuit of efficiency.

That brings us to e-content and the role it plays in the connected value chain.  If you think of the connector business as the road network, the e-content is the map that enables consumers to find their way.

Therefore, connectors will use e-content together with the connected value chain to determine the perfect product for the consumer.  It is imperative for any contributor that their e-content represents their products affinity to their consumers’ desires.  It needs to accurately and consistently provide all the relevant cues that enable the connector to offer appropriate options, and for the consumer to make the right selection.

So far it all doesn’t seem that big a deal, right?  Sure, big business needs to restructure.  Big brands need to re-think how to represent in a connected world.  None of that is new, so what’s the problem?

The issue is trust – more specifically, the method of generating trust.  Trust is like oxygen to a brand, without trust a brand will quickly fail.

Let’s take a look at trust for moment – it is acknowledged to be built through the equation of credibility + reliability + intimacy, tempered by self-orientation (as defined by David Maister).  In a traditional value chain, it cumulates through scale.  The prevalence of a brand reinforces the trust through social evaluation, which creates an exponential impact.  The whole logic of ‘lots of people buy into the brand, so it must be good’.  Effectively the greater prevalence of a brand, the more inherent trust is generated. 

This situation has always made it harder for new businesses to enter a market, as it takes time to build a brand to scale.  It’s hard work, and takes considerable investment and time.  In a traditional value chain, launching a brand is like trying to turn the tide.

The ttrust equation (David Maister)

 

With the connected value chain, the equation is the same, but is no longer cumulative.  This means that new entrants to a market can generate trust almost instantly.  The connectors simply connect prior with potential consumers.  This means the social evaluation is no longer based on quantity of experience, but quality.  In this new connected world, the individual can have more influence than the masses.  The logic switches to ‘The prior consumers who are just like me rated this product well, so it must be good’.  It’s still necessary to generate a wave, but once you have done that you can ride it indefinitely.

So does this mean the end of brands?  Most assuredly not.  Remember that brands are not about logos and fancy fonts, but about building affinity between product and consumer.  As mentioned, e-content is like the map that enables the consumer to find their way.  Branding is doing that in such a way that ensures the consumer stays engaged for the journey.  It provides the building blocks needed to generate affinity in a connected world.  It represents the branding of the future.

Sure, right now e-content is pretty one-dimensional, but that is changing fast.  Don’t make the mistake of thinking it’s just a re-invention of the master data we use to connect one contributor to another.  Connecting businesses will develop algorithms to use this data in ways we can’t even imagine yet.  As a result, it will learn.  It will predict.  Above all, it will enable. 

If you don’t believe me, check out Alexa and think through the implications when your consumers are conveying their desires through speech.  What will they say?  And how will you build your e-content to ensure that Amazon selects your product over the competition?


Welcome to a world driven by e-content, where it's easier for a new player to compete than an established one.  Welcome to the connected value chain. 

 

The Value Chain Revolution

What the advent of a connected value chain means for your business.

In a previous article, Innovative Products to Innovative Solutions, we explored a world where consumers would expect much more from the brands they trust.  This time, I wanted to more closely examine the dynamics that are making this real.

So - consider a typical value chain – it will be made up of several businesses, each which contribute to the value of the final product.  They each play their role, and also build a connection to those adjacent in the chain.

The challenge for such an array of contributors is to work together as efficiently as possible, while at the same time competing for a greater portion of the overall chain.  Independent organisations such as GS1 and industry self-regulators have emerged in an attempt to minimise waste.  These groups together moderate the balance between competition and connection by defining standards that drive efficiency and prevent competition that might damage the industry.  Still however, waste is prolific throughout the value chain.

Waste is defined as processes which consume more resource than necessary when adding value to the final product.  Waste has most famously been categorized by Taiichi Ohno.  Muda, or Ohno's Seven Wastes

One of the key reasons for this waste is the gap between each contributors’ perception of value and the reality.  With the data flow interrupted at every stage of the value chain, it is almost impossible to accurately determine what is actually desired by the consumer.  Each contributor must somehow engage the consumer directly.  This is inefficient and therefore expensive.

Each business contributes value to the overall chain, eventually resulting in a product that is consumed

As we move more into the Information Age, a new type of business has emerged – that of the connector.  As they embed themselves more into our society, so does the role of the traditional business need to change. 

Connecting functions of traditional businesses are no longer required, and so those businesses need to adjust their operations to focus solely on contributing value, not connecting consumers to that value.

Essentially, each business will become either a contributor or connector; contributors are those that create the value, the connectors are those that disseminate it.

In this connected value chain, a direct interface is enabled between all contributors and the consumer.  This means that not only can the connector ensure that the consumer is connected to the most appropriate contributors, but also that the contributors can specifically address the desires of that consumer.

As a result waste is reduced significantly.  Much more so than could be achieved with a traditional value chain.  Contributors are able adapt their offerings to perfectly match each consumer. 

A new type of business now connects the value chain, not creating value itself but enabling it

Consider ebay – they simply create connections, between buyers and sellers.  Airbnb, uber – these may be more specific in execution, but not in principle.  Although the commercialization is not so obvious, Google does the same for information, facebook for social interaction.

The end result of this is that a whole bunch of stuff embedded in an established contributor business is no longer an asset, and as such has become a liability.

For new players, it’s not a problem.  They just don’t add any of that stuff in the first place.  Most of that stuff is what used to make it hard to enter an industry.

Uber is a great example of this.  To provide private vehicle transport where uber is available, you don’t need anything more than what most people already have – a car and a phone.  The barriers of entry into this industry are now incredibly low. 

For the incumbent taxi firms things are not so easy – each cab is riddled with expensive hardware, payments, navigation, radio, lights, and they cannot easily be repurposed.  Think about the reason for that hardware for a moment – they all enable specific connections.  The bank for payment, the mapping for navigation, the radio to take on bookings – even the light on the roof is to connect with potential consumers as they drive by. 

Those items were necessary to enable the value chain, even though they didn’t add value for the consumer.  With the connected value chain, they have become a liability that do not provide an advantage.

This situation presents a real danger to any entrenched business – an environment where the barriers to survival are greater than the barriers to entry. 

The result is rapid and disruptive, a genuine revolution. 

Find out how to prepare in the next article.