Traditional networks are integral to management

09.02.2007
Value networking, says Gartner vice president and distinguished analyst Carol Rozwell, is a method for examining the relationships among a group of related organizations or individuals to understand and categorize the value each gains from the relationship.

While this is not an exact measurement system, it has implications that range from the business management level (Does the enterprise have the right business partners to succeed, and if not what is missing?) down through the project level (What partnerships with which entities or individuals will best ensure the project's success?) to network infrastructure design, since the network provides the infrastructure that makes those relationships possible.

"I first encountered the value relationship concepts in 1998-'99, when e-commerce was the rage," Rozwell says. "At that time, many brick-and-mortar entities were concerned that new Internet-based competitors would disrupt their businesses. Value network mapping was an attempt to identify all their complex sets of relationships and identify the economic value drivers of the network.

Concept is catching on

"As the awareness of the importance of partnerships has increased, the value network concept has seen a gradual uptake," she says. "It is being used by companies that are receptive to techniques that seem a little squishy at first."

She has charted the life sciences value network, mapping pharmaceutical and biotech companies to other entities such as contract manufacturers and hospitals. In the process, she coded each organization according to its main business strength known as its value discipline: