As a SharePoint consultant, I work with companies to implement SharePoint, as well as help the sales team demo the platform during the sales cycle. There are two questions that constantly bubble to the surface:
- What is SharePoint?
- How can it help my company?
To gain a better understanding of how the SharePoint platform can help a company drive value and innovation throughout its workforce, you need to have a general understanding of the Value Chain. Once you have this understanding you can then easily identify the strategic importance of this application.
The Value Chain
Every firm is a collection of activities that are performed to design, produce, market, deliver and support its product. All these activities can be represented using a value chain (pictured below). A firm’s value chain and the way it performs individual activities are a reflection of its history, its strategy, its approach to implementing its strategy, and the underlying economics of the activities themselves.
The value chain is the basic tool for diagnosing competitive advantage and finding ways to enhance it.1
Nine Strategic Activities
The value chain identifies nine strategically relevant activities that create value and cost in a specific business. These nine value-creating activities consist of five primary activities and four support activities.
Primary Activities cover the sequence of:
- Bringing materials into the business (inbound logistics)
- Converting them into final products (operations)
- Shipping out final products (outbound logistics)
- Marketing them (marketing and sales)
- Servicing them (service)
The Support Activities – procurement, technology development, human resource management, and firm infrastructure – are handled in certain specialized departments, as well as elsewhere. Several departments, for example, may do procurement and hiring. The firm’s infrastructure covers the costs of general management, planning, finance, accounting, legal and government affairs.
The firm’s task is to examine its costs and performance in each value-creating activity and to look for ways to improve it. The firm should estimate its competitors’ costs and performances as benchmarks against which to compare its own costs and performance. It should go further and study the “best of class” practices of the world’s best companies.
Core Business Activities
The firms’ success depends not only on how well each department performs it work, but also on how well the various departmental activities are coordinated to conduct core business processes. These core processes include:
- The market sensing process. All the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information.
- The new offering realization process. All the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget.
- The customer acquisition process. All the activities involved in defining target markets and prospecting for new customers.
- The customer relationship management process. All the activities involved in building deeper understanding, relationships, and offerings to individual customers.
- The fulfillment management process. All the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment.
Strong companies develop superior capabilities in managing and linking their core business processes. Strong companies are also reengineering the work flows and building cross-functional teams responsible for each process. Winning companies are those that excel at managing core business processes through cross-functional teams.
To be successful, a firm also needs to look for competitive advantages beyond its own operations, into the value chains of suppliers, distributors, and customers. Many companies partner with specific suppliers and distributors to create a superior value delivery network, also called a supply chain.2
SharePoint Helps Link Business Processes & Enables Cross-Functional Teams to Collaborate
SharePoint provides a platform to help manage and link core business processes by enabling cross-functional teams to collaborate in an efficient manner. Collaboration can be defined as a way to improve the productivity of people and teams and accelerate the flow of information throughout the company.3
- SharePoint provides a tool to empower business users with a way to quickly improve core business processes.
- SharePoint is unique in that it enables business users to create their own solutions and control their own permission & access models without having to rely upon IT.
- In addition, SharePoint is a web-based platform, so end users simply need a web browser to interact with it.
When you put SharePoint into the hands of the employees who know the business process the best, they have a tool to begin to drive change quickly. This is good and bad. If they have a good understanding of how your business processes link together with one another, and the resulting value that creates, it is good. If they do not have an understanding of this, then they might build solutions that do not lead to addtional value. This is bad.
Communicate Your Value Chain to Your SharePoint Site Owners
Help your SharePoint Site Owners understand the linkage of your business processes, how you create and sustain value as a company – your Value Chain. This will lead to the people who know the individual processes best working together to improve collaboration within cross-functional teams, and as a result, drive value for the organization.
1. Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York:The Free Press, 1985)
2. Philip Kotler and Kevin Lane Keller, Marketing Management 12e (New Jersey:Pearson Prentice Hall, 2006)
3. Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business (Harvard Business Press, 2010)