Businesses can achieve great success by transforming successful cost centres into profitable business operations.
Having spent two great years at the retail marketing solutions business Bezier, I was gutted to hear that the administrators had been called in. Rather than dwell on how or why it all went wrong, I reflected on the lessons I learned as part of the growing IT team at Bezier.
Unbundling IT and transforming it from a cost centre to a profitable operation
When I joined Bezier, technology was a value add. It was seen as a sweetner to not only win new business but to lock it in to our processes and systems. Our work in the IT development team was paid for from the margins of the print work. In my humble opinion, we were good at we did and I was fortunate to work with some talented and hardworking people.
The Group Technical Director had a greater vision for the IT function and developed a print technology proposition that we would execute over the next two years. We were branded as b3 and a suite of tools was designed (although at the time most of it was vapourware or heavily customised for a specific customer). This proposition allowed us to approach existing smaller accounts and to begin selling IT solutions on top of the print work. Leveraging existing relationships was a quick way to get to market and enabled us to continue investing in the team.
The next stage came as we can pitching for work where technology was the primary purchase and printing was a bolt-on. A major international hotel group liked what we could offer and following a robust tender process selected b3 (or Bezier) to develop an international print personalisation and ordering system.
Amazon Web Services are another excellent example of unbundling. Amazon ran servers (lots of servers) and used their expertise to develop the Amazon Web Services offering which is now one of the most popular scalable computing models in the market.
Unbundling; how to do it
- Analyse the business function and identify what services from it other businesses could consume
- Develop a go to market proposition that the market will understand
- Leverage existing client and supplier relationships to begin selling in your expertise
- With the support of your existing sales and account teams, begin approaching new potential clients and start tendering for work
There’s a lot I’d do differently now but the core model works.
The book Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers contains sections on unbundling business models and contains exercises that will help solidify the process.