There are many others who have worked in network analysis as
applied to business. Work of other theorists is discussed
in Theory Base for Value Network Analysis.
A selection of articles, academic papers, and case studies contributed by value network practitioners is in Community Contributions in the Community and Contributions chapter.
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I
first began working with the mapping method in 1993. At that time I was
supporting reengineering teams by leading them through the benchmarking phase
of their projects. Many of the companies I worked with were using process flow
diagrams as the foundation for question set development and communicating with
benchmarking partners from other companies, which were often from outside their
industry.
But
that simply didn't work well - especially on very complex sets of activities.
The flow charts were at too fine a level of detail, looking so different from
other companies' processes that they just didn't communicate. Yet without an
organizing framework the benchmarking process yields an overwhelming amount of
qualitative data.
What
I wanted was a systems-level tool that shows the business process, but would
communicate across organizational systems that might be very different.
Further, such a tool would need to support question set development so that
qualitative information could be systematically linked back to process
activities.
So
I started working with different methods trying to come up with a way to model
work from that whole-system perspective. I looked at any methodology I could
find that might be adapted to such use. Experiments included variations of system
dynamics, quality and process tools, inter-relationship diagraphs, causal loop
diagramming, and even object-oriented data analysis. A colleague, Mac Patrick,
introduced me to the context mapping technique developed for software
engineering that uses the basic elements of actors and transactions. Working
with that as a starting point the two of us developed a way to link every
transaction in a role-based map to a question in the benchmarking interviews.
This provided a fast, systematic way to handle qualitative data generated from
the interviews.
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Early applications of the mapping
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As my customers began to have sometimes dramatic insights using this approach, I became convinced that the method could be applied to a wide variety of business issues - going far beyond its early use in question set development. After that initial success with benchmarking, I continued to fine tune the elements of deliverables, participants and roles, inputs, and outputs, and incorporated knowledge and information flows along with process flows. Finally, working with different issues and challenges in customer engagements, I experimented with color coding and layering to show multiple processes or activities and their interdependencies in the same diagram. A registered trademark was awarded to this basic mapping method.
Early successful projects included:
- Delivering support for a benchmarking project that returned $5Million over five years on a $70,000 study for a major technology company, by surfacing data and conducting comparative analysis of best practices in customer service measurement.
- Reducing product launch time for an AT&T products division from six months to two by using the mapping to define and improve knowledge transfer.
- Reducing time for the capital budgeting activity from nine months to three, for a large technology company.
- Saving a global telecom millions by identifying a needlessly redundant service support unit.
- Reconfiguring a training evaluation value network for an international computer technology company that better integrated data gathering into the training delivery system, at a cost savings of over $50,000 per implementation.
- Surfacing data and conducting analysis through benchmarking, that saved a regional telecommunications company over $2Million by realizing a more cost-effective solution in improving billing quality.
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By the mid 1990s new insights into intangibles and knowledge management allowed me to expand the mapping method to a robust methodology for understanding organizations as complex adaptive systems. At that time I devised a way to link transactions to non-financial scorecards and incorporated intangible transactions into the mapping. Inclusion of intangibles now allowed the capture of both context and processes. The method then became a powerful tool for mapping of organizational activities in a more organic, non-linear way. Instead of a single process, it could show multiple processes or flow paths and their interdependencies.
By the late 1990s I began to coach and qualify others in the method under the trademark of ValueNet Works(tm) Analysis. Along with others I adopted the generic term of Value Network Analysis (VNA) to distinguish this type of approach from more traditional network analysis.
Additional business gains began to be realized in a variety of industries. The complexity of the projects had now expanded even beyond the shop floor and business unit levels. VNA was now gaining excellent results in complex strategy and market space analysis and global networks.
Some examples:
- Engaging top leadership in a strategic market space Value Network Analysis for a global accounting and auditing firm, to evaluate future impact of four strategic issues.
- Serving as a core research method for a year-long study of ecommerce and business webs, "Winning in the Digital Economy" for Digital 4Sight, Toronto. This research was reported in the best-selling book, Digital Capital, by Tapscott, Ticoll, and Lowy, 2000.
- Being applied to a many different types of projects, ranging from shop-floor process improvements to leveraging cross-organizational networks for customer service and strategy development.
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By year 2000 other practitioners began to adopt the methodology in countries around the world. As VNA became more recognized as a methodology more challenging engagements and projects came online. By now VNA had been proven at the level of work teams, business processes, cross-boundary projects, business units, and business value networks.
In 2006 the Value Networks Consortium was launched by value network enthusiast John Maloney and began offering events and an open resource site at www.openvaluenetworks.com. In 2008 the Consortium was acquired and supported by ValueNetworks.com which continues to support open access and contributions to the method.
Years 2002-2007 saw validation of the method at the level of global action networks and even regions and nation-states.
A sampling of those projects includes:
- Strategic executive-level strategy work and competency development in value networks, intangibles, knowledge management, and knowledge networks for multi-national corporations and government agencies, including Telenor (Norway), AgResearch (NZ), Environment Canada, Cisco Systems, the Boeing Company, Mayo Clinic, HP, Eli-Lilly, and Motorola.
- Boeing Commercial Flight Operations, Test & Validation - supporting an extensive organizational redesign using system dynamics and Value Network Analysis to gain a breakthrough a productivity leap in commercial airplane testing.
- European Commission IST-RTD evaluation of regional innovation networks supported by the 7th IST Framework Programme, linking value network patterns to financial indicators and Intellectual Capital Formation at the organizational and regional level.
- EU Project Roadmap for New Partnerships for Sustainable Development in the Knowledge Economy (NESKEY) for the European Commission. The Roadmap describes a vision of 360-degree accountability, transparency, and participation for indicators of progress toward a sustainable economy for cities and regions.
- Rand Europe European Commission evaluation study ERAnets (Evaluation of Networks of Collaboration between Participants in IST Research and their Evolution to Collaborations in the European Research Area).
- Identifying key action networks and guiding network strategy development for the Global Reporting Initiative (GRI) in South Africa, and ICTSD (Geneva), in the area of sustainable trade, supporting strategy development and organizational effectiveness.
- Mapping and optimizing global action networks with GAN-net in the areas of finance, human atrocities, and slavery.
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Value network technologies
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Early softward applications for value network mapping were unsatisfactory and in 2004 my colleague Oliver Schwabe and I developed the GenIsis application which was sold commercially as part of the online ValueNet Works(tm) Fieldbook. This application was later acquired by ValueNetworks.com. By year 2006 the interest in value networks was accelerating. People began to appreciate that this perspective could bring powerful insights in the complex and fast-changing economic environment that is emerging.
For the most part, current collaboration, project, and process tools do not provide a network structure for managing collaborative work. Nor do they provide the necessary visual and analytical business intelligence to manage loosely structured work. Nonetheless there is a growing demand for more human-centric ways of organizing and managing work, and a number of technology companies are seeking ways to support more loosely structured work.
Companies are laying a foundation for value network technologies as evidenced by companies such as such as SAP that is supporting industry value networks. There are many academic and commercial applications for social network analysis on the market. The rise of social networking is providing a basic capability for people to understand social graphs, which will continue to accelerate technologies for human-centric network analysis. Enterprise-focused collaboration platforms such as SalesForce.com(R) are integrating network graphs and features, and others, including Sharepoint(R) are attempting to link to more traditional business process applications. ValueNetworks.com, launched January 2008, is among the pioneering companies providing new capability for visualizing and analyzing value networks.
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VNA in academia and standards
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The number of published case studies and academic articles referencing and applying Value Network Analysis is multiplying rapidly with more than 50 relevant academic articles published in 2007, roughly doubling every year. At this writing in January 2011, Google Scholar citations for network analysis are at 355,000 with roughly 11,000 of those referencing value networks specifically.
Further support for VNA is growing in the area of non-financial business reporting. The SEC is throwing its full weight behind adoption of XBRL as a way to bring auditable reporting into the Management Discussion and Analysis (MD&A) portions of the SEC 10K Filings (Eccles, Watson, and Willis, 2007). The XBRL movement (Enhanced Business Reporting Language) is supporting adoption of Value Network Analysis taxonomies in market space and organizational reporting. The MD&A requirement depends on elaborating key relationships and the negotiability of strategic intangibles - key strengths of VNA. Having a standard value network XBRL taxonomy of MD&A intangibles would achieve fundamental advancements in transparency, audit, and deeper understanding of operations and strategy overall. The SEC's project to revamp its EDGAR (electronic data gathering, analysis, and retrieval) database and to invest in the development of XBRL taxonomies for all industries promises to accelerate XBRL adoption across the United States.
VNA was included in the ITIL3 Handbook in 2007 and is mentioned in the eTom standard (mobile) as a method for doing strategy-level mapping. VNA is one of the incorporated methods in the development of the Value Delivery Model (VDM) for the OMG standards group and is influential in other standards efforts as well.
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