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Section 7: Chapter Summary
Many programs launched by IBM focus on the three aspects of creating shared values. However, there are many other issues that still bother the stakeholders. The fact that IBM is only providing values that are mostly based on the already existing infrastructure, its values would only be able to be delivered if the government is already having a strong dedication to the smart grid development. Smart grid transition could take years and would cost quite a large sum of expenditures.
From the business point of view, smart grid is facing many challenges.
Currently, smart grid is still technology oriented and continues to rely on the research of CTO, CIO and engineering staff an organization. The problems that most power companies concern today is whether they have the ability to analyze the huge amount of data generated from the sensors. When electrical grid was firstly created it was designed as a one way flow of energy. No one expected that the idea of having a two way communication would become the talk for the energy related industries. These were made possible due to the emergence of big data analytics and the improvements in generation capacity of renewable energy. Despite all of those big achievements of the technology world, most of those technologies are not known to the consumers and consumer rarely find any relation between themselves and green technologies.
The problem remained as how motivate the consumers to engage them in the projects.
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It might be clear to the technicians and the more environmental concerned consumer that smart grid can help with the energy crisis. But that only counts for a small fraction of the entire global population. To make the smart grid work, utilities must understand who their consumers are where they are located.
Utilities need to gain more access to the consumer insights that has caused the problem of privacy. Consumers felt insecure if their behavior pattern is exposed to utilities. This is very important to how to make consumers feel comfortable with sharing their parts of information. Meanings need to be given for most consumers to ask them to proactively take part in programs that are often beyond their imagination. Utilities and power companies need to pay close attention to the government policies and to see how they can collaborate with the government organizations to send out messages and to provide services that would reduce the social cost and increase consumer values.
While there are already energy saving appliances and some power companies do have online platforms for consumers to provide their energy usage with.
Those have not directly target at the problem of how to better engage the consumers
It is important to know what your values are and the values you believe in.
Once that is settled you have to know whether these values are presentable and can be consistently delivered by your organization and serve as your competitive advantage. If the values are not needed by the stakeholders then it is merely the action of forcing your values to be accepted by the society. That led us to another discussion of how to appropriately create values that would benefit the society and at the same time to create values for the business itself.
Business community and governmental organizations are constantly meeting
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the short term goals not because they can only go this far when it comes to planning. It is rather the notion that the performance of the business community and the governmental institutions are restricted to deliver short term returns in order to meet the expectations of people involved in the system.
Government and policy makers are the main bodies of a nation in terms of the economic development by playing the role as the establisher of regulations and to push the necessary actions going forward. We have seen clearly in the time of 20th century, business has start to go down the road of CSR, but mostly started with the compliance with the law and it is seen rather passive or just trying to create a name for itself. This is not the government wanted;
government carried the burden of to be responsible for its people. While the business used to believe that they are only responsible for the shareholders of its own. Thus, the dispute the values proposed from both sides are hard to be met. The question is so complicated and has been going on for decades which have left the rest of the society to be the victims of the ongoing tension between governmental institutions and the business community.
I would not like to underestimate the NGO’s role in their effort to change the world into a better place. But I would consider they have contributed to the tension between the government and the business community. When you in terms that the competitive advantage is the unique ability of any single corporation, by that it is enough to understand that they have the right to exist by providing that value they have offer to the customers. If the company is not competitive, throughout the business cycle it would then go out of business
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eventually. It is not the fault of the business community to be blame for the so called troubles they have caused the word. It is rather the fact that nobody was pay attention to the social and environmental issues as to that of the current level. Everything takes time for people to understand, this is why education exists. Education is the essence for gaining knowledge, without knowledge humanity would never be able to have the chance to advance. The situations have become too severe for anyone to think of promising practices that would be able to solve all the problems in the world in a short period. This has made government and NGOs furious about the doings of the business and I am not here to defend the business because indeed they have caused many societal and environmental problems by not doing the right thing when they had the chance to do so. Again I am not saying who is to be blamed for all the problems we have today, rather I am talking about that it does take time for values to be developed and values are varied over time. What used to be important or not important might not be seen the same once the time has moved on. If the business community and the governmental bodies or even NGOs continue to blame on each other for all their false and the to try to overly defend their own positions, there is only going to be one single outcome, dead-end!
Smart Plant Program might have contributed to the continued growth of revenue between the end of 2009 and March 2012. But it began to decline consecutively for five quarters since the second quarter of 2012. Market analysts indicated this might due to the slow growth in the emerging market, which IBM was weakly involved in. But the growth of emerging market still continues and will determine the growth of the computer software, hardware
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and service providers like IBM. The competition is becoming more intense for the cloud industry. IBM has to start to find new sources of revenues. IBM has to look for new sources of revenues, which would reflect the point of redefine markets and services from CSV. IBM have experienced a Information indicated that IBM is looking for new ways to reinvent the markets, by looking at the customers as individuals rather than generalizing them into sectors. That resulted in a 200% growth in the Global Business Services Smarter Commerce signings that is $2 billion in year 2012 alone. IBM continues to look for business opportunity to sustain its visions despite all the challenges ahead
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Chapter Five: Conclusions and Suggestions
Section 1: Conclusions
CSV is a good framework on the first glance as it talks about creating both business and social values. But through the study of smart grid and having analyzed the case of IBM, I got to know something more about the way how CSV would work. CSV is still seeing many challenges that would not be able to solve at least to my estimation in areas of understanding how to better facilitate the interests of the stakeholders and to try to unlock business opportunities without sacrificing the interests of the society. After writing this paper, at least in the smart grid landscape identified. Government continues to play an important role in the initiation stage. This could be that the large sum of initial investment is needed and utilities claim that they would not be able to escalate the deployment without the help of the government. Utilities have submitted the demonstration projects to seek for the Smart Grid Investment Grants in the U.S, these shows that in fact the functioning smart grid even till today all have to rely on external finance from the government and reflects how uncertain it was for them to launch the smart grid projects.
The effectiveness of CSV approach smart grid business still remained skeptical. Mainly because the technologies would have side effects that just cannot be easily settled and the fact that the found increasing in electric bill have further soar the already negative attitudes of the consumers to found disbelief in money saving through smart grid. Despite all of the good things proposed by the smart grid we sometimes have to look at things from areas which we were not able to see without understanding the true impacts it would
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have for different stakeholders. The most important thing still remained as who is going to be the biggest influencer among all stakeholders. The governments sometimes have to make sacrifices on who to support to begin the transition.
As in the case of smart grid clearly it was the utilities. Successfully identifying the chain effect and the people that are in and will be influenced by the chain can increase the likelihood for CSV business model to happen. In the case of smart grid, the utilities played an important role as it is the most vital part of the chain to allow all interests be integrated. Without the utilities none of the smart grid hardware or software would found their way into the market. And thee would be no demand response to urge the consumers to better understand the importance of energy reduction if utilities did not enroll in the smart grid deployment. The relations between all stakeholders deserve the attention of anyone that is trying to deliver CSV business model. Now that IBM has a vision that includes a handful of social expectations. The question is IBM doing enough to reach the goal, or is something still missing to make the experience more profound. Technology is the cornerstone for advancements in both the context of economy and society advocated by IBM. Quite often we are lowering the issues down to the level which we might understand and take actions that are only within our own ability. IBM has to be able to translate his thoughts and ideas down to the level that consumers could understand because it takes a long time for people to understand things that are simply that are in their reach or which they believe they are not accounted for. IBM has to bring its oversea experience on shaping the smart grid system in Taiwan to provide economic values for the citizens in order to show how they would be financially better off if they choose to engage in the smart energy initiatives.
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