Component-Based Transition

transition and transformation

the component-based business approach

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Camelot retains UK lottery licence

December 19th

After several months of uncertainty, Camelot has been awarded a renewal of its licence to run the UK lottery. Congratulations to them, and commiserations to Virgin.

But what if Camelot had lost? Imagine a company faced with losing its primary source of business. How can it use the component-based approach to survive?

Simple outside, complex inside - clear and reliable interface (facade) to sophisticated distributed service operation

Highly flexible business architecture supports diversification and transition

Situation

There are many ways that a company could find itself in a situation similar to that faced by Camelot.

Challenges

Even if you are out of business next year, you may still have to keep going right up to the wire, and this can be more difficult if you start to lose your best people.

	Established organization with single business
	Expected termination of current business at known date Loss of licence / contract Expiry of patent / licence Regulatory change
	Excellent organization – could be reused for alternative business

	Operate business until termination date
	Retain all required components (people, assets) until termination date - while keeping costs under control.
	Find viable alternative business for organization
	Find viable alternative use for each component business continuity managing the assets protecting the people

Positive thinking tells us that all problems are opportunities, and that all threats are challenges. So the word challenge has now become a code-word for grief. But it doesn't have to be so bleak.

Component View

Viewing a complex business as a set of collaborating components allows us to think through the opportunities and challenges more intelligently.

	A business is built from several components. Call centre Retail sales force Technical network / infrastructure Systems Brand
	Each component provides one or more services to the business as a whole.
	Components may be managed and operated inhouse or by third parties.
	Each component may play a different role in the organization’s future – or none.
	Each component may undergo a transition into the future organization.
	Each transition may take place on a different schedule.

Component Options

Each component may either be retained or disposed. Cherry picking has its pitfalls, but it's a good start..

Retention

Find alternative uses for component
Build alternative business proposition in detail
Transition component to new use
Maintain service to old business until termination.

Disposal

Find suitable partner to take over responsibility for component.
Buy back services on a fixed-term contract until termination date
Reserve option for future services.
Partner develops alternative uses for component

Which option offers better job prospects for staff?
Which option offers better utilization of assets?
Which option is in the best interests of the whole?

Some components will not be needed for the most interesting business ideas.
Some business ideas may use the same subset of components.

Each business idea may be a different permutation of some basic elements.

In principle, old and new channels may operate in parallel during transition period.
In principle, old and new channels may collaborate as well as compete.

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