VRM Evolution – the role of social capital

The rather reductionistically-named discipline of VRM (Vendor Relationship Management) continues to acquire intellectu...

November 10, 2008

The rather reductionistically-named discipline of VRM (Vendor Relationship Management) continues to acquire intellectual traction…notable contributions from my old friend and colleague, Peter Parkes, and others, who are working to operationalise the principles of Project VRM. 

Now there will always be tensions in VRM between those who approach it from a values-based standpoint of individualism and those who see it merely as a source of efficiency gains - the value perspective. Clearly, for it to work, both perspectives must fuse together…and both are also a red herring in some ways.
The truth is a fusion of the two perspectives.  I have expressed this, rather clumsily in the past, as  ‘Would Like to Meet’ WLTM commerce –  envisaging VRM as a form of social brokerage.

However another, simpler way to see VRM in terms of human and social capital.VRM may be seen as a set of processes by which enable us to gain a return on human capital (skills, knowledge, competence etc) through interaction with social networks.  

The challenge of VRM lies simply in constructing and maintaining productive capital transformation systems. The systems should:
1. Accurately identify and recognise the value of hidden assets 
2. Connect those human assets to the individuals best placed to use them
3. Ensure a fair price is paid for the trade assets
4. Capture exchange-value for the individual and the collective while leaving enough surplus value within the social system…  

The success or otherwise, or VRM will thus some down to a number of questions

1. Developing dynamically standardised envaluation mechanisms –  such as peer reputation or knowledge extensity
2. Increasing networked resource-transparency – via mechanisms like Mine! or some putative GoogleMe application…
3. Developing market-based mechanisms to pre-filter the quality of demand and supply
4. Ensuring that toxic transactions – e.g. where relationship expectations are mismatched – are isolated and dealt with via some form of remediation system.

So there you go

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