Why the pendulum is shifting from ‘solutions’ back to ‘capabilities’

pendulum-swing-of-ideas

During my time in the IT industry, I’ve seen many changes in the way that services are discussed with customers.  If I were to identify a single overarching trend over the last 15 years, I would say that the transition from discussing “capabilities” to discussing “solutions” is the most significant.  But like all things in this industry, the pendulum has begun to shift back, and now I see more of a role for capabilities in the discussions.  Two factors are driving digital disruption, making it critical that businesses address capabilities again: 1) the uncertainty in the direction of markets and 2) the injection of creativity into business technology.

But before discussing why capability has once again become important, let me try to define what I mean a bit better.  When I talk about discussions regarding capabilities, I mean the talks we have with customers about what new features or functions will be available.   During the early days of client-server computing, for instance, there were a lot of discussions about capabilities. They largely centered on the notion that compute power would no longer be monopolized and centralized with a mainframe. Client-server computing created the capability for a company to analyze and access information across the periphery of its physical location.

These discussions were interesting, but inevitably centered on IT much more than business.  The question often remained unanswered, “So what?”  Organizations had this new capability, but no idea what could be done with it.  And so, the age of “solutions” was soon ushered in.  Solutions discussions are centered on the business problem being addressed.  In the case of the client-server shift, the solution discussion could have emphasized new collaboration opportunities that would increase the efficiency of sales teams, or many other examples. The point is that a solution provides a tangible, business-focused yardstick for measuring the success of a project.  It really doesn’t matter to a business whether they are using client-server technology. What matters is that this capability increases collaboration, and subsequently, sales performance.

From a business perspective, it always seemed obvious to me that the solutions discussion was the more interesting one.  After all, paying for capability without solutions is bit like paying for all the features in a product like Microsoft Word, where 90% of the capabilities are ones you will never use. (When is the last time you did a mail merge?)

Why solutions discussions are not enough

There are some real problems with discussing solutions exclusively, however.  I will focus on two of them:

Solutions discussions presume that the business problem is well-defined.

Since the discussion is focused on solving a problem, the assumption is that we know what the problem is, and that we know the problem in a fair amount of detail.  For a solutions discussion to really work, the problem can’t be something like, “I need to increase revenue.”  Instead it has to be something more like, “I must provide sales teams with historical data about customer purchases in real time, wherever they may be.”

Solutions discussions presume that we know that a particular solution will solve a particular problem.

This is perhaps one of the greatest causes of customer dissatisfaction with IT service providers.  Service providers often present a solution with a high degree of certainty that it will solve the problem at hand.  Oftentimes, the links between the services, the solutions and the problems are not quite as straightforward as we would like.

I contend that neither of these circumstances – that we can fully know the problem or how to solve it — is true as companies begin to engage in digital transformation.  I mentioned earlier two factors driving digital disruption: uncertainty in regards to market direction and the injection of creativity into business technology.  These map precisely to the two problems with solutions discussions I noted above.  Lack of certainty in market direction means that business problems are often not well defined.  They now have a tendency to come in the form of questions like, “How can I build a new revenue stream for my business?”  There is no services solution that easily maps to that problem.  Further, the injection of creativity into business technology means that we often are not sure if a solution actually solves the problem.  We live in an era of rapid prototyping, agile development and fail fast.  All of these are reactions to the ambiguous relationship that exists between technology solutions and the problems they are meant to address.

And all of these are capabilities.

The winners in the digital economy are going to be the organizations that harness digital disruption to refine and address business problems that are not well-defined from the outset.  Winners will also find ways of injecting creativity into their solutions by exploiting capabilities, not just the ones I mentioned above, but others like cloud, APIs, serverless functions, identity management and analytics.  Organizations that exploit digital technology well will need to build out these capabilities — often in the absence of a clear business problem to solve.

How capabilities influence success

I will close with an illustration of how a company’s existing capabilities determines the success of the solution.

One of my colleagues was working with a utility company focused on a solution regarding a mobile application that would provide detailed customer information for technicians visiting on site.  The question the utility asked is how they could exploit the app to build a new revenue stream.  After some brainstorming, the discussion came around to whether the utility could cross-sell home security services based on a risk profile developed in real time, at the customer location.

Certainly, this is a disruptive idea.  But what was lacking was the capability to move forward.  The integrations with systems from existing home security partners, the APIs to allow for seamless billing, the real-time data collection ability to gather publicly available crime data from the locality — all of these capabilities needed to be built in order to create this new revenue stream.  An organization that already had these capabilities would be able to exploit this opportunity faster, and thus gain a significant first-move advantage.  Building a solution from scratch would be slow relative to the market.  Thus, the organization’s lack of capability was inhibiting the development of a new digital revenue stream.

My advice is not to go build capability after capability; often that will be a waste of resources.  My advice is to think carefully about what capabilities are required to support innovation and your business users’ creativity.  If you want to win in digital, these are the capabilities to invest in now.


Dan-Angelucci-headshotDaniel Angelucci is the chief technology officer for DXC Technology’s Asia region. He is responsible for promoting DXC’s technology story in the region as well as helping to shape the future technology direction of the organization. Daniel held a similar role at CSC. Prior to CSC, he served as a senior director in the engineering team at Visa Worldwide, was a senior consultant at Verizon and spent many years in the global architecture team at DHL.

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